Sustainable Business Practices Assignment Solved

SUSTAINABILITY
REPORT

EXECUTIVE SUMMARY
The report executes the essentialness of sustainable reporting to executives in current
business environment. It enables accountants and executives to devise the different tactics of
environmental, CSR and sustainable reporting from stakeholders’ perspectives. It covers the
stance and initiatives of the Australian accounting profession on corporate social responsibility
(CSR) and sustainability.

Table of Contents
EXECUTIVE SUMMARY.............................................................................................................2
INTRODUCTION...........................................................................................................................1
MAIN CONTEXT...........................................................................................................................1
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
The base of effective organisational structure mainly based upon sustainable business
practice (Varsei and Polyakovskiy, 2017). With the change of business requirements, the area of
responsibilities and liabilities of organisations have been increased towards the society,
environment and different communities. Today, the organisers and business persons keep
focusing towards building strong social and environmental business structure to make the
business practices more ethical and conceptual. This essay majorly talks about the sustainable
business practices by considering the three essential elements of business as “people, planet and
profit”. The existence of organisation remains incomplete in the absence of these key elements.
This report discusses about the stance and initiatives of the Australian accounting profession on
corporates social responsibility and sustainability in respect of current accounting and
professional structure. For better understanding BHP Billiton mining company’s sustainable
business practice model is critically analysed. Company has elaborated its social and
environmental accountability by considering the Australian accounting standards.
MAIN CONTEXT
Australian accounting profession on corporate social responsibility
Ferrell, Fraedrich, and Ferrell (2015) stated the three methods such as prescriptive,
structural, and functional are used to understand the theory of stakeholders. There is a direct
relation found between the sustainability and Corporate social responsibilities of an organisation.
The concept of accounting for CSR is essential to communicate the values of organisation with
stakeholders, people of organisation and answerable communities. Business industries in
Australia discovered that a cooperative connection exists among stakeholders and indeed the
theory of social capital. Legal rules are addressed in the prescriptive strategy. The
structural strategy indicates its significance of recognizing a corporate practice when discussing
approaches for company decision. There are some standards are formed to make CRS reporting
more effective and ethical. These standards are OCED guidelines, UN global compact principles,
GRI, ISO 26000, SA88000, AA1000 and ISO 14001. Analysts on both the global economic
sector know the origin of integrating financial sustainability in to the financial statements in
order to attain better financial efficiency and attain cultural efficiency as directly related to the
aims and goals of the business.
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Organizers build comparative interventions for companies' economic characteristics and
issues and evaluate their connection with both the return distribution of freshly purchased bonds,
asset ratings and long-term servicer ratings. Governance on environmental activities and
consumptions of natural resources are as essential areas of reporting as CSR. The rules related to
environmental reporting are formed by CPA in which ways are defined to incorporate the data
related to consumption of resources. These rules also focused upon the structure of presenting
the data in communities, government and stakeholders. Recently the AASB released the data
related to climate risk and its impact upon economic streams (Bringezu and Moriguchi, 2018). It
is tried to link the environmental usage with the cost to entity to make sustainable reporting more
ethical and viable. Ecological procedures influence lending firms ' liquidity by identifying the
vulnerability to possibly expensive legal, infrastructural and contractual risks.
Issues for management and managerial accountants in sustainable business practice
The financial stability cannot be maintained by an organisation positively without procuring
social and environmental aspects. It becomes more crucial and complex for managers and
accounting executives to make the accounting practice viable to environmental and socially
ethical. though, it is therefore essential for businesses to build organizational choices on credible
data and much more strategically focused company operations. Throughout this regard,
management reporting may play a crucial part in attaining organizational efficiency by offering
appropriate, precise and accurate data to executives. Any company's primary obstacle is just to
incorporate all such various elements. It involves both concurrent quest for all elements as well
as the interoperability of accounting with standard financial reporting and computer systems for
conservation-related data (Engelbrecht, 2016). Major businesses seem to strive to develop as
well as implement suitable procedures, and there was no general strategic approach to
sustainable reporting in one of the investigated businesses. Even though many businesses
encountered a broad variety of problems in coping with sustainable measurement, they even now
reported being able to construct methods of achieving the goals and deliberately trying to grow
them.
To refer to the process of collecting, analysing and communicating sustainable-related
data, the word ' sustainable management' is being used here. This could include all fresh kinds of
data and data which may have been produced and is used for many moments until the word
"sustainability" has become popular need (e.g. on compliance with the law to labor laws). A
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mixture of philosophical debates on both the essence of audit as well as scientific innovations in
management may have arose from either the principle of sustainable measurement. For both
instances either this is implicitly based on acknowledgement that perhaps the social and
environmental elements of the company are still not properly recognized among most businesses
' present reporting as well as other data systems, and thus these is not fully taken into
consideration in decisions and efficiency assessment. Can be seen as a fresh projections based on
a completely fresh management system as an expansion of standard management, relying in
portion on who is accountable for its environmental accounting and the type of analysis gathered
in just a specific business.
According to Epstein, (2018) Good intentions are not enough. If driven by interest for
culture and the workplace, public legislation, shareholder pressures, or financial benefit,
executives and advisers must continue to make important improvements to control the economic,
financial, and cultural effects more efficiently–and stay in business. Frameworks in the results of
commercial development are no anymore the exclusive sphere of businesses like Ben & Jerry's
or The Body Shop but but now changed into a big, corporate firms like G.E. And Wal-Mart is
leading the way with important social and environmental economic and organizational
obligations). Several businesses, large organizations, also chosen to make mandatory revelations,
mainly in the form of a walk-alone study, often seeking to conform to rules like those of the
Worldwide Investigating Project or even the North pole Values, at least in part. But, the impacts
on enhancing sustainable efficiency were hard to assess at least (Macve & Chen 2010).
Throughout 22 nations, approximately 80 percent of the Worldwide Wealth 250 (the biggest 250
globally) issued a sit-alone study or generally provided more versatile and detailed data via the
blogs. The ratios were higher throughout the Rest of the eu than the global average. This was the
situation with both the businesses investigated in this venture due to the current methodology.
The internal claims process is still separate both from the goals to be pursued of each firm
and the implies it embraces to accomplish them. Mandatory norms of sustainable development
like ISO 14001 and EMAS can function as a regulation or leadership, especially as they are
institutionalized and internationally recognized. Businesses vary for both elements–not just in
their goals, as well as in how they want to undertake such goals and the chosen management
regulate strategy, with a few corporations were more' attempted by figures' than another regime
(Bartelmus, 2013). If service providers request which organizations adhere to entities, it can
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coercive. Both EMAS or even ISO 14001 serve as a reminder of ' fragments of partial guidance '
to assist organisations to implement environmental stewardship structures which practically meet
criteria of certain things.
The microeconomic difficulty confronting company is to enhance its effectiveness
comparative to financial assets such as capital invested subject to generating financial yields
(profits). It could be defined as the cost-added proportion to an extra environmental effect per
group, in which additional environmental effects is comparable to both the amount for
all ecological impacts direct or indirect produced by either a commodity or interaction. To reach
the highest social and economic output as financially when feasible is indeed an equal task for
sustainability management, and those are evaluated by environmentally-efficiency and social-
efficiency alternately (Schaltegger and Zvezdov, 2015). The comparative ratios of a financial
(currency) metric and a biological (ecological) value are described as bio-efficiency. Added
value for every ton of CO2 produced, for example. Equally, it is possible to describe social-
efficiency as the chemical composition of a financial metric and a cultural effect, eg, value added
compared to the amount of incidents experienced by employees. Environmentalist-justice
represents the proportion of social and environmental goals.
Azudin and Mansor, (2018) provided the views regarding the Management Accounting
Practices (MAPs). Alters in the worldwide company setting also motivated change in SMEs to
advance toward more innovation by concentrating on cost efficiency. MAPs includes multiple
instruments, methods and useful inner data for money management, profit managing and
assessment of results. Financial reporting theology from accounting remains to indicate the
advantages of implementing Management Accounting Practices (MAPs) to improve company
sustainability. Differences in its implementation between companies are prevalent as there is no
standardization of executive accounting methods. Management accounting information system
also shapes MAPs.
Sustainability Context of BHP
Entities are taking initiatives towards implementing accounting standards to enriches the
operations for sustainable growth and development. BHP Billiton is mining company established
in 1885 and secluded in Broken Hill in New South Wales (Huang, Wu and Yan, 2015). It is a
trading unit of BHP group plc and BHP group limited. Being a dual listed organisation it has to
maintain the existence separately in terms of stakeholders and authority’s bodies. The
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sustainability report of BHP contains the consolidated overview upon sustainability and ethical
code of conduct structure. There is no any doubt that organisation has created an ethical and
reliable business structure in order to maintain the image of effective collaborative approach,
integrity, respect, performance and accountability. The main purpose is creating the value of
business in terms of gaining the long term objectives and plans. A basic rule of sustainability is
maintaining the interest of stakeholders and finding of emoluments for protecting environment
and BHP focused upon this rule and able to integrate the concept of sustainability to other
entities. Constructing the core values more strong is the primary purpose of organisation. This
element considered in the approach and it puts the health and safety aids first. This make the
organisation more responsible and competent for communities and stakeholders.
Company is conscious about its people and try to maintain supportive environment to
make manpower comfortable. Organisation is committee towards workforce planning and a
healthy culture so that the appropriate skills utilised at required place. This not only make the
business viable but also helps in creating a healthy working culture with in business structure.
Global workforce is the base of BHP Billiton group. Safe and healthy workforce planning
approach is capable to indulge the people in operations with effective organisational structure. A
more important changes linked to cooperation and trustworthy interactions at job (rise of six
scores); concentrate on staff growth (rise of three points); or involvement as well as investment
in BHP (increase of two points). Promoting the encouraging and well-being a varied and diverse
culture is essential to keeping a competitive edge. 81 percent of the staff analysed decided that
the team would start from either a cooperative stance. It is a powerful consequence provided
which confidence as well as the value of the professional relationships are crucial to the viable
results of BHP. Company provide advanced and fully functional technology to employees with
proper direction. Safest ways and easy to understand tactics of new processes reduce the work
pressure and make employees able to attain the desirable outcomes and vision of business.
Environment is the core sensitive area kept at high priority in company’s sustainability
report. Company’s strategy clearly states that if organisation is utilising the resources form
nature then it is prime responsibility of entity to contribute efforts to restructure the form of
environment with double efforts. Company is concentrated on minimizing and reducing
utilisation impact on soil, air quality and water biodiversity, or working with participants to
address complicated environmental problems with efficient alternatives. The environmental
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management performance of company is extremely well in terms of framing the requirements of
environment and changing atmosphere. The risk management approach also helps in emerging
the management standards and effectiveness of business entities (Wu, 2012). In FY2018, a
specific objective was to promote a global water strategy for BHP. Management is also
increasingly seeking possibilities to work with governments, communities and other sectors to
share data and allow efficient collective action. To allow the entity to attain their goals and its
people, on-ground enhancement initiatives have been identified as well as implemented, and
innovation alternatives have been investigated to help them to track and decrease future effects
on the environment.
BHP perceives in its preparing as well as decision-making the complete life chain of its
resources, along with relocation (Okafor, 2013). The resources of both the organization are
needed to establish a separation strategy, such as an economic evaluation to reduce the risk
associated with relocation over lives of the resource. Its inner audit and consultative role
measures its efficacy of such intentions, reporting conclusions to high level operational
representatives as well as providing the Risk and Review Council with overview documents.
BHP often spends in long-term analysis to understand better major success variables for gradual
incarceration as well as completion. One example of this is the Restoration Seed Bank initiative,
a five-year partnership that began in 2013 between Western Australia Iron Ore, the University of
Western Australia and the Botanic Gardens and Parks Authority to address gaps in science,
knowledge and technical skills for cost-effective and scalable Pilbara rehabilitation. Throughout
FY2018, organisation started a fresh initiative in the U.S. country of Louisiana, working on both
the Terrebonne Biological diversity and Strength System with the American Vernal Pools
Concealer and Commodity Ecological Alternatives. BHP will spend over $3 million over six
years to restore mangrove–highland park marsh environment and defensive marsh soils. Such
functions can promote improving quality of water, enhancing fisheries, protecting pollution and
protecting floods, and improving sequester of coal in forests (Milne and Gray, 2013). The
essentialness in terms of evaluating the effective structure for more stable approach and
comparability. It is feasible for just a business to embrace a combination of such three types,
such as organizations with a distinct sustainable division, but which still consider sustainable
problems to be the obligation of line management.
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CONCLUSION
The above context elaborates the critical aspects of sustainable business practice and
challenges for managerial accountants. As the two principles of sustainable reporting exhale the
significant issues and correlate them with effective skills and management. The evaluation of
accountability of CRS produced in the context of international CSR reporting standards. How an
organisation be able to consolidate the ethical accounting to attain sustainable accounting
structure. The contextual structure of subject helps in determining the value of sustainability in
order to control stakeholder’s risk.
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REFERENCES
Books & Journal
Epstein, M. J., 2018. Making sustainability work: Best practices in managing and measuring
corporate social, environmental and economic impacts. Routledge.
Azudin, A. and Mansor, N., 2018. Management accounting practices of SMEs: The impact of
organizational DNA, business potential and operational technology. Asia Pacific
Management Review, 23(3), pp.222-226.
Ferrell, O. C., Fraedrich, J. and Ferrell, L., 2015. Business ethics. Ethical decision making and
cases.
Varsei, M. and Polyakovskiy, S., 2017. Sustainable supply chain network design: A case of the
wine industry in Australia. Omega, 66, pp.236-247.
Bringezu, S. and Moriguchi, Y., 2018. Material flow analysis. In Green Accounting (pp. 149-
166). Routledge.
Engelbrecht, H. J., 2016. Comprehensive versus inclusive wealth accounting and the assessment
of sustainable development: an empirical comparison. Ecological Economics, 129, pp.12-
20.
Bartelmus, P., 2013. The future we want: Green growth or sustainable
development?. Environmental Development, 7, pp.165-170.
Schaltegger, S. and Zvezdov, D., 2015. Expanding material flow cost accounting. Framework,
review and potentials. Journal of Cleaner Production, 108, pp.1333-1341.
Huang, L., Wu, J. and Yan, L., 2015. Defining and measuring urban sustainability: A review of
indicators. Landscape ecology, 30(7), pp.1175-1193.
Wu, J. J., 2012. A landscape approach for sustainability science. In Sustainability Science (pp.
59-77). Springer, New York, NY.
Milne, M. J. and Gray, R., 2013. W (h) ither ecology? The triple bottom line, the global reporting
initiative, and corporate sustainability reporting. Journal of business ethics, 118(1),
pp.13-29.
Okafor, T. G., 2013. The triple bottom line accounting and sustainable development. Journal of
Sustainable Development in Africa, 15(7), pp.249-261.
Online
Sustainability report, 2018. Available
through:<https://www.bhp.com/investor-centre/-/media/documents/investors/annual-
reports/2018/bhpsustainabilityreport2018.pdf>.
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