Sustainability Report Analysis and Comparison

This assignment provides a comprehensive analysis and comparison of the sustainability reports from Australian Gas (AGL) and Origin Energy. The report assesses the companies' strategies for reducing carbon emissions, their commitment to stakeholders, and the presentation of sustainability data. The analysis highlights similarities and differences in the two companies' approaches, providing insights into their operational practices and accountability to society, culture, and environment.

MANAGERIAL
ACCOUNTING

Table of Contents
INTRODUCTION...........................................................................................................................1
Sustainability Report of AGL.................................................................................................1
Sustainability report of Origin energy....................................................................................3
Comparison between two sustainability reports.....................................................................5
CONCLUSION................................................................................................................................9
REFERENCES................................................................................................................................9

INTRODUCTION
Managerial accounting is defined as process of making reports, then analysing these
reports, and communicating these to management to carry out decision-making. This is done to
identify whether an organisation is directed towards achieving goals and objectives. This report
is based on sustainable reporting of two companies namely AGL and Origin Energy(Managerial
accounting meaning, 2018) .
AGL (Australian Gas Light) Energy Limited, which is an Australian company established
in 1837. It is involved in generation of electricity and gas for commercial as well as residential
purpose. Origin Energy is a Australian public energy company founded in 2000 engaged in
exploration of natural gas and their production. Sustainability reports of 2017 have been
provided of both companies. Analysis of these reports is given along with comparison between
these two sustainability reports .
Sustainability Report of AGL
Meaning of sustainability in AGL is to consider responsibilities towards internal and
external stakeholders as well as towards internal and external business environment.
Sustainability is firstly divided among two broad categories, that are getting ahead with carbon
constrained approach and becoming more customer-centric. Further in narrow form, strategies
includes:
 Moving from mass retailing to personal retailing.
 Instead of becoming owner of large assets AGL will become coordinator of large and
small assets.
 Rather than high-emission of technology, AGL will focus on low-emission of
technology.
 From grasping platforms in already existing markets to grasp new as well as existing
markets.
Principles of AGL are:
Transparency: All relevant information should be provided to stakeholders related to
rehabilitation.
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Engagement: Stakeholders such as investors, government, community, customers etc.
should be involved in plans of rehabilitation which will help in accumulation of different aspects
and views. (Krapp, Nebel, and Sahamie, 2013)
Accountability: AGL is responsible to publish information of rehabilitation activities at
least once in a year for external stakeholders.
Reasons for adopting sustainability approach:
 Environmental issues of air and noise pollution
 Enhancement of use of renewable energy resources
 Optimum use of limited water resources
 Greenhouse effect on climate change
In sustainability performance reporting, AA1000 principles are applied. Reporting of
workplace issues are kept confidential and defend employee from exploitation. Internal reporting
related to compliance of corporate governance and complaints handling processes assures of
proper administration (Davis and Davis, 2011). Also in consideration with remuneration process,
gender equity is required to be adopted by leaders. Incident and hazard reporting system is
designed in such a manner that issues related to them can be resolved in an effective manner.
Areas of interest are policies of government, concerned public areas, enforcement of program,
and aspects related to policies of international processes (BOGDĂNOIU, 2011).
Areas of strong focus are cyber security risks, creating awareness about protecting
information. AGL is big supporter of price liberation because it will lead to increase in
competition and ultimately brings innovation. AGL emphasizes on generating community
interest in solar plants. For development of culture, AGL is concentrating on smarter working by
joining technology, places and employees.
Material sustainability issues in providing clear information, approach of AGL in
choosing partnership with other organisation, career development, issues in recognition of
personnel etc. are some weak points of performance of AGL.
In a survey of Australian Workplace Equality Index (AWEI) conducted by Pride in
Diversity, AGL established national benchmark for completing this survey and awarded with
Gold Tier Employer. It was in the top 8.6% of 116 employers in this survey of 2017. And in
2016, AGL was awarded with silver status. An independent panel gave grants worth $1.69
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million to generate employment in FY 2017. Head Office of Sydney awarded with 6-Star Green
Star Rating in the field of environmentally sustainable interior design.
In relation to sustainability reporting framework, a review was done to resolve issues of
stakeholders. In that review, a materiality matrix came into being which comprises of 12 material
issues. This review was done in 2016 but to keep uniformity, comparability, and focus on
sustainability ,these material issues were carry forward in 2017. 12 material issues that were
analysed in sustainability reporting framework are as:
 Material issues
 Public policy engagement
 Community engagement
 Health and safety
 Climate change
 Profitability
 Energy market evolution
 Customer experience
 Energy prices and affordability
 Energy efficiency and distributed energy services
 Renewable energy
 Ethical conduct
Sustainability report of Origin energy
Sustainability report of Origin energy
Sustainability report provides a summary of origin's execution on material social,
environmental and economical sustainability aspects for the period 1 July 2016 to 30 June 2017.
This report comprise forward looking statements like as statement of view and predications of
future final expectation and future events, statement of current intension (Kanellou and Spathis,
2013).
Strategy of sustainability report
Growth in renewable, gas and cleaner, smarter customer solutions.
Objectives
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Main objective of this report is climate change, absolutely clear and unequivocally support to
measures to progressively reduce global emission and acknowledge the role the energy sector
needs to play in transitioning to a lower carbon future (Ostrikov, 2011).
Reason for adopting sustainability report
 Emission
 water
 Land access and Coexistence
 Customer
Effectiveness of reporting on key stakeholders
Area of interest
Area of interest of investors is including financial performance, identify and manage
risks, climate change and emission and future energy solutions and water. Area of interest of
customers including energy affordability, quality of our services and ease of interacting with
origin
Engagement approaches
These approaches according to investors prospectives and First approach to identify
sustainability aspects regarding customers is hosted an annual general meeting as well as various
investors and investors roadshows, second respond to regular investors, third undertook surveys
to storage investors answer. Fourth distributed price sensitive information to investors by media.
Some approaches regarding to customers are improved the online services and sales, gain
computer needs, priorities, and market research programs and provided valuable information to
customers, and creating always on approach for communicating and for leadership(Nelson, T.,
Thurbon and George, 2015).
A commentary on areas of strong sustainability performance of the company
In this year for sustainability performance taking strong steps in area of building smarter
and cleaner energy future for grown a low cost renewable energy portfolio. Expected to grown
more than 25% for generation mix and up from 10% today by new supply on energy prices
(Strand, R., 2014). Strong gas position as a lower emissions firming fuel has recognised as it's
low carbon profile and role of maintaining energy security. It makes flexibility to support ideal
fuel.
Areas of weak sustainability performance of the company
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When working with the CSIRO and other scientific research on weak areas and after
operations to find landscape emission and understand where changes needed and attributed for
gas activities.
Venting – After operation experience to production are triggered by inbuilt safety systems. These
systems protected to equipment and people.
Leaks – It was leak from infrastructure, particularly at pipes joints and valves. They use emission
factors to estimate leak rates.
Flaring - Gas can also be released by burning the methane to designs flares within infrastructure.
Flaring converts methane to carbon dioxide and measure emission for these practising.
Methane emission from the land escape – Mostly hydrocarbon producing basins that occurring
methods (Deegan and Islam, 2012).
Reporting frameworks
Reporting framework covers many recommendation and have made commitments for
additional disclosures, including the approval of a company broad science supported emission
decrease target. Appraisal the TCFD recommendation in particular over FY2018 with a view to
further rising our disclosures. Utilize of supply chain control framework for manage risk and it
will includes anti corruption policies, anti bribery, environment requirements and health and
safety. A framework of organizations that commit to measuring and implementing practical
actions that create opportunities for Torres strait and aboriginal with respectful relationship.
External assurance, awards, sustainability ratings
2009-2011, 2013-2017
Australian council of superannuation investors leading ratings for disclosure of sustainability
risks. Dow Jones sustainability indices (2013-2016), FTSE4 good (2004-2017), Vigeoeiris
(2016) and it was honoured with Corporate Plus Award in national indigenous internship
program by Career Trackers with whom it was in partnership since 2014 (Dissanayake, Xia, and
Wu, 2015).
Comparison between two sustainability reports
Basis of comparison Sustainability report of AGL Sustainability report of Origin
Energy
Sustainability: For AGL sustainability refers For Origin Energy,
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to long-term obligations
towards stakeholders and
environment.
sustainability means
sustainability of material,
social, environmental and
economic prospects.
Strategy Strategies of AGL is adopting
carbon-restrained approach
and becoming customer-
centric.
While strategies of Origin
Energy focuses on growth of
renewable, gas and cleaner,
and better customer solutions.
Objectives or principles Principles of AGL are
accountability, engagement
and transparency.
Objectives of this company are
climate change, reducing
global emission, and lower use
of carbon.
Reasons for adopting
sustainable approach
Reasons for adopting these
approach are environmental
issues, increase in use of
renewable resources, limited
resources, green house effect.
Reasons for follow sustainable
approach are emission, water,
customer, land access and
coexistence.
Effectiveness of reporting Reporting of different areas
improves effectiveness of them
such as reporting of
workplace environment helps
in resolving exploitation
problems. And reporting of
remuneration, brings gender
equality.
Effectiveness of reporting
divided in area of interest and
engagement approaches and
these are investor and
customers prospectives. In this
including proactive approaches
and emissions of energy.
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Areas of strong sustainability
performance
Areas of strong sustainability
performance are community
interest, smarter working
environment, social welfare,
environmental conservation.
Area of strong sustainability
performance are smarter and
cleaner energy and low cost
renewable energy portfolio.
Areas of weak sustainability
performance
Areas of weak sustainability
are material information
sustainability issues, career
development, recognition of
employees, issues in approach
of choosing partnerships.
There are various areas that are
the reason of weak
sustainability of the
organisation that are, Venting
which is the reason of various
errors in the inbuilt system of
the organisation that can harm
peoples, in the situation of
disruption company has to take
action to manage gas in
infrastructure. Gas can leak
from the infrastructure which
is possible if pipes are not
properly joint. Flaring is a
issues in which gas can be
released by burning the
methane, company measure
the possibility of such
situations. Methane emission
from the landscape may take
place due to millennia and
organisation can choose gas
develop activities to ignore the
same.
Utilisation of reporting From a review of sustainable A particular board is formed to
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frameworks reporting framework, matrix of
12 material issues arrived. And
these issues were attempted to
provide relevant solutions.
analyse the effectiveness of
eligibility and formation of
report. It is evaluated that G20
financial stability and the
financial disclosure procedure
is followed by organisation of
better reporting framework.
GRI that is considered as
Global Reporting Initiative
considered in this report. Users
mainly analyse the reporting
standards as AA1000 that
helps in underlying to
manipulate the report in
governing structure. Risk
management and corporate
rules are also considered for
analysing the requirement and
budgeting aspects. Supply
chain aspects and management
system is analysed with
effective organisational
structure. Relevancy subject to
emission control and
intensities are also considered
in reporting framework.
Awards, ratings, and other
recognition
It was awarded with Gold Tier
employer in 2017 and silver
status in 2016 based on a
survey conducted by Pride in
Diversity.
it was honoured with
Corporate Plus Award in
national indigenous internship
program by Career Trackers
with whom it was in
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partnership since 2014
Length, readability, layout and
appearance
Length of AGL sustainability
report is 89 pages, readability
is good as every aspect is
interrelated with each other,
appearance and layout are also
good in the way that proper
data and tables are provided
for convenience.
Length of Origin energy
sustainability is 63 pages,
reliability is well good from
every point of view and
properly related with report,
other appearance and layout
are also groovy
CONCLUSION
From the above report, it is concluded that sustainability reports of both the companies
are developed on the basis of strategies adopted by them. And strategies are focused on
restraining use of carbon so that it will be saved for future. Principles of both states on giving
benefits to internal as well as external stakeholders. Sustainability reports emphasizes on being
accountable for society, cultural heritage, and environment.
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REFERENCES
Books and Journals
Davis, C. E. and Davis, E., 2011. Managerial accounting. John Wiley & Sons.
Krapp, M., Nebel, J. and Sahamie, R., 2013. Using forecasts and managerial accounting
information to enhance closed-loop supply chain management. Or Spectrum. 35(4).
pp.975-1007.
BOGDĂNOIU, C., 2011. Bases for managerial accounting and cost calculation. Quarterly
Journal, p.211.
Kanellou, A. and Spathis, C., 2013. Accounting benefits and satisfaction in an ERP environment.
International Journal of Accounting Information Systems. 14(3). pp.209-234.
Nelson, T., Thurbon, C. and George, A., 2015. Understanding environment, social and
governance (ESG) analysis and the recent'divestment'commentary. Governance
Directions. 67(2). p.87.
Strand, R., 2014. Strategic leadership of corporate sustainability. Journal of Business Ethics.
123(4). pp.687-706.
Deegan, C. and Islam, M. A., 2012. Corporate commitment to sustainability–Is it all hot air? An
Australian review of the linkage between executive pay and sustainable performance.
Australian Accounting Review. 22(4). pp.384-397.
Dissanayake, N., Xia, B. and Wu, P., 2015. Measuring sustainability performance within the
Australian energy industry. In Proceedings of the 19th International Symposium on
Advancement of Construction Management and Real Estate (pp. 135-143). Springer,
Berlin, Heidelberg.
Ostrikov, K. K., 2011. Control of energy and matter at nanoscales: challenges and opportunities
for plasma nanoscience in a sustainability age. Journal of Physics D: Applied Physics.
44(17). p.174003.
Online
Managerial accounting meaning, 2018. [online] available through :<
https://www.myaccountingcourse.com/accounting-dictionary/managerial-accounting>.
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