Sustainability Report: NAB and Woolworths Australia Group

This report compares the accounting policies and sustainability reports of NAB and Woolworths Australia Group. It discusses the governance system, risk assessment, and CSR voluntary disclosure of NAB. The accounting policies of both companies include standard methods for preparing financial statements, risk management, and accounting standards for assets. NAB's sustainability report shows a 20% reduction in paper usage and 55 billion AUD investments in environmental financing by 2025. NAB's CSR approach is related to securing customers' long-term fund security and maximizing shareholder's profits. The CSR voluntary disclosures vary across industries and companies.

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Executive Summary
It is summarized that the environmental, social, economic, and business performances of NAB
depend upon its CSR and sustainability reports. The corporate governance structure and CSR
activities of the NAB are related to the risk management, socially and environmentally
sustainable practices, shareholder’s’ wealth maximization (high ROI) and delivering high
customer value through the value-added and quality products. The accounting policies for the
assets, equipment, plant, and property of NAB differ from Woolworths because of different
measurements and disclosure elements. The sustainability report and CSR reports of NAB show
the high socioeconomic, environmental, and business performance for sustaining the high brand
image, corporate reputation and global identity in order to maintain the long-term business
relationships with the customers by winning their trust and loyalty for the company’s businesses.

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Contents
Executive Summary.....................................................................................................................................2
Introduction.................................................................................................................................................4
Main Discussions........................................................................................................................................5
Part A: Accounting Policies........................................................................................................................5
a) Disclosure and Measurement Components for Accounting Policies....................................................5
b) Comparison of the Accounting Policies..............................................................................................6
Part B: Sustainability Report.......................................................................................................................7
a) Governance System to Sustainability..................................................................................................7
b) Risk Assessment Systems...................................................................................................................8
c) Guiding for implementing the Environmental and Social Performance and Reporting.......................9
d) CSR Voluntary Disclosure................................................................................................................10
Conclusion.................................................................................................................................................13
References.................................................................................................................................................14

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Introduction
This report describes the core business activities for two Australian Companies, NAB (National
Australia Bank) and Woolworths Australia Group. NAB is the leading Australian Bank that is
highly committed to the sustainable environmental practices, corporate social responsibility,
stakeholder’s satisfaction, and customer relationship. Currently, it has employed over 35,000
employees to serve in excess of 10 million customers globally. It is a public limited company
that is listed on ASX: NAB. The core business activities for NAB include corporate governance,
business (B2B) and consumer (B2C) banking, finance, insurance, asset servicing, wealth
management of the industries, debt markets, lending and deposits, risk management, fixed
income, exchange of currencies, debt markets, trade finance, deposits and withdrawals of
payments, and NAB-trade for the SMEs, corporate sector (business industries and service firms),
and individual customers(The Wall Street Journal, 2017).
On the other hand, Woolworth Ltd. is an Australian retailing supermarkets industry whose core
business activities include CSR and Corporate governance, the satisfaction of the stakeholder’
needs, sales through the supermarket stores, customer order management, supply chain
operations (production, storage, distribution, and handling), E-CRM, and retailing service
operations.

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Main Discussions
Part A: Accounting Policies
a) Disclosure and Measurement Components for Accounting Policies
The measurements and disclosures for the accounting policies of both NAB and Woolworths
include the standards methods for preparing the financial statement, standard approaches to risk
management, auditing report, and accounting standards for the plant, equipment, and properties.
The cost of Plant (the land and building for the corporate branches), equipment (computers,
furniture, internet connection, machineries), and properties (assets, stock inventory, cash inflows,
and real estates for its branches) are measured at the fair value or actual costsas per the
Australian accounting standards. The plant and equipment, like furniture and computers, have
fixed costs but require maintenance costs for repairing or replacement as well as the recoverable
amount for the software programs at the regular intervals (NAB, 2018). The Plant, equipment,
and properties account an estimated cost for the administration and management, operating costs
of employees, product development cost, taxes, service charges, installation costs, cost of site
preparation, internet connectivity costs, cost for operating businesses in new locations and
depreciation amount and amortization deducted from the total costs. All these costs are
considered as operational, maintenance, and administration costs. The land and building include
freehold and leaseholder cost and accumulated depreciation is deducted from the summation of
costs.
Woolworths includes the fixed land and building costs for the installation of its supermarkets,
fixed equipment cost for the furniture, computers, production technologies and machinery for its
large scale-production, but also includes the variable costs, like repairing or recovery

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(maintenance cost) for the equipment. The properties are fixed assets that are valued at the
market prices and shares as per stock market changes(Woolworths Holding Ltd. 2015).
b)Comparison of the Accounting Policies
According to Cost or Revaluation model of Accounting,for NAB, the land, buildings (that are on
lease) and infrastructural assets, like furniture and computer are revaluated after regular intervals.
While, in the case of Woolworths, the buildings, land, and infrastructural assets are its owned
properties that only require the repair costs or maintenance cost. Woolworths don’t have lease
costs for its supermarkets while, NAB has to pay the leasehold expenses for its plants in the form
of the corporate branches (National Australian Bank, 2017).
The inventories of Woolworths are valued at the net realizable value at lower cost for its plant
and equipment. While, NAB has fair valued inventory costs for its plants and equipment because
Woolworths include purchase-related debates, settlement discounts, and other costs to its
inventories for different plant locations for the sale. Woolworth’s property, plant, and equipment
are measured at the cost less amortization and depreciation and accumulated losses. Woolworths
has extra labor production costs, raw material costs, and overheads that are not in case of NAB.
Woolworths includes a fixed cost for the properties because of its fixed supermarket locations,
while, NAB includes variable costs because of varying cost for installation of new branches or
changing locations for its offices because of leased properties(Benn and Bolton 2010).

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Part B: Sustainability Report
a) Governance System to Sustainability
NAB is the most reputed bank in Australia that is aimed at the CSR accountability and
transparency in the financial statements and decision-making for delivering value to its
stakeholders. The corporate governance mechanism to sustainability for NAB includes a
corporate code of conduct, sustainable strategy, stakeholders’ interests, risk management and
compliance, performance-oriented business, the integrity of external reporting, and executive
review and succession planning. NAB’s board of directors are committed to the CSR activities
for taking fair and valuable decision to maximize the corporate performance as well as
sustainable outcomes for the high stakeholders’ interests and customers’ benefits. The board of
directors is committed to NAB’s corporate objectives in protecting stakeholders’ interests
including securing the funds the customers and welfare of the communities as well as enhancing
the shareholders’ returns. The sustainability report 2016 of NAB represents 20% reduction in the
paper usage, 54% reduction in the waste diverted from the landfill, and 55 billion AUD
investments to the environmental financing by 2025 to address the climate change issues
(National Australia Bank Limited, 2017).
The board of directors’ sustainability efforts led to increased focus on the consistent business
performance, socially responsible behaviors, maintaining transparency and accountability, and
reviewing and controlling the corporate governance and social responsibility for NAB. The
corporate governance’s sustainability strategy includes reviewing, monitoring, and approving the
corporate investments and strategy plans. The sustainability report also shows the corporate code
of conduct and nurturing a healthy culture for the ethical standards, monitoring budgets, and

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reviewing the business outcomes. The board of directors guides the audit committee to prepare
the standard auditing reports to maintain the integrity of the financial statements and accounting
records (Du, Bhattacharya, and Sen, 2010). The risk compliance and management process is
related to identify, review, and monitor the risks through the guidance of the risk committee.
b) Risk Assessment Systems
The sustainability report 2016 addresses the risk management procedure of NAB for adopting
the CSR approach and ethical responsibility to reduce the high level of risks, like systematic
risks, credit security risks, socio-cultural risks, stakeholders’ risks, environmental risks, market
risks, and business risks. NAB adopts the CSR approach to perform the social, environmental,
and governmental performance. The company increases its participation in the carbon risk
disclosure by developing initiatives to the standardized disclosure methodology. The company
has socially responsible funding and lending mechanisms for the consideration of the regulatory
requirements, ERG risks, and voluntary commitments (NAB, 2017). The industry initiatives, and
capabilities to manage risks assist to develop a sustainable and resilient business, implement
strategic priorities, and continuously responding to change environment.
NAB is committed to maximizing the investor’s return on investment and securing the
customers’ funds for their long-term investments, and withdrawals. It incorporates the social,
environmental, and government risks (SEG) risks in its risk policy frameworks, processes, and
processes at both business and group level. Managing SEG risks assist to protect the businesses
of NAB with a broader CSR strategy that include environmental and social factors while taking
spending and lending decisions. NAB identifies the important legislations and regulatory
environment and compliance of the customers for managing social and environmental risks. It
considers the impact of the changes in the regulations and legislations and societal expectations

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on the customers’ businesses and company’s reputational risks (CTI Reviews, 2016). It also has
a risk management process for the carbon risk disclosures for protecting the communities and
societies by providing the financing through the low-carbon transitions.
c) Guiding for implementing the Environmental and Social Performance and Reporting
For implementing NAB’s long-term social and environmental performance and reporting, the
company should continue toward the CSR approach to maintain its corporate, social, and
environmental performance. It should have a standardized risk compliance and management
procedure to reduce the investors/shareholder’s ROI risks and standard disclosure for the low-
carbon transitions. The performance indicators could be fixed to ensure the standard formats for
the environmental and social performance. The CSR approach of NAB should be related to
securing the customers for their long-term fund security with the enhanced returns as well as
maximizing the shareholder’s profits by increasing their return to their own investments. The
materiality, stakeholders’ participation and their inclusiveness, and communicating the reporting
with the external stakeholders could be considered. The managers and executives are required to
present the external reporting about the social, economic, and environmental performance to the
board of directors (Stoner, 2012).
The development of a sustainability chart will be effective in nurturing the high CSR culture,
strengthening the corporate governance sustainability, responsible internal staff members, and
safety environmental practices for reducing the external environmental risk impact of its
operations on the environment and communities. The ethical code of conduct to all
organizational staffs at all levels will be effective to set the highest professional standards for
performing the ethical behavior to be socially and environmentally responsible in the direction of
increasing the reputation of the bank (Sadgrove, 2016). The environmental-friendly campaigns,

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standard disclosures for the low carbon transitions, green environmental practices, recycling
process for the waste, and low greenhouse carbon emissions might be effective for enhancingits
sustainable environmental performance worldwide as well as maintaining good relations with the
communities and stakeholders.
d) CSR Voluntary Disclosure
The CSR voluntary disclosures vary across the companies or industries because of different
corporate governance structures, CSR approaches and environmental policies and regulation
standards. For example, the CSR voluntary disclosures of retail industry (like Woolworths) differ
from the banking service sectors (e.g. NAB), and Hospitality (e.g. Hilton hotel) because of
differences in the industry regulatory standards, stakeholders’ expectations, and environmental
regulations. The CSR disclosures also differentiate from each other because of different
corporate governance structures, risk management processes, and CSR and sustainability reports.
Some companies disclose their CSR information to enhance the corporate performance and
brand valuation as well as visibility to the sustainable environmental performance by
communicating the CSR reports or sustainability reports open to access to others (Chain and
Bouvain, 2009).For example, the retailing supermarket chain, Woolworths’ CSR disclosures are
different from the NAB because of different approaches to CSR adopted by the board of
directors in the sustainability report, the number of pages for CSR information, CSR disclosure
dimensions, environmental and social perspectives and measures to CSR disclosures.
At NAB, the board of directors governs the CSR structure that providesthe directions to the
Audit committee to forecast the demand and supply for its future growth trends, identify the
credit, operational, market, liquidation, and debts risks and manage risks, prepare the accurate
and informative financial statement by the auditors, risk committee for the settlement of risks,

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and environment audit committee to the sustainable social and environmental performance. Its
CSR voluntary disclosures include the stakeholder’s returns, customers’ fund security and
relationship, sustainable environmental strategy, risk compliance and management,the integrity
of external environmental and social reporting, monitoring and review of the CSR plans, and
strategies, and ethical standards for the employees (Du, Bhattacharya, and Sen, 2010).
NAB commits to recycling of waste and reduction of paper waste because of the digital
processes, nurturing a corporate culture, issuing CSR bonds, donations to environmental
sustainability, and the corporate code of conduct to its internal team members. On the other hand,
the CSR disclosures for the retail foods supermarkets (e.g. Woolworths) differfrom the
Hospitality industry (e.g. Hilton hotel) because of the different CSR standards, environmental
regulation mechanism, stakeholders’ structures and expectations, company’s visibility and
policies by the board of directors, and industry membership. For example, Woolworths is the
leading Australian retailing industry that operates the business worldwide through the high
standard CSR practices for the sustainable social, environmental, and economic performance
across the world(Lee, Fairhurst, and Wesley, 2009). The CSR report 2017 of Woolworths
discloses information, like its international collaboration and business partnership, investors’
good relation because of good returns on the investments, safe, healthy, and quality products to
the customers at competitive prices, ethical code to its internal and external staffs, risk
compliance and audit committee to evaluate and monitor the external risks, and communicating
information to the stakeholders.
Hilton Hotel has its hospitality businesses in more than 100 countries with its hotel branches at
different locations worldwide. The hospitality service standards, tourists’ foods and
accommodation expectations, stakeholders’ structures, environmental sustainable regulations,

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staffs’ sustainability commitment to the environment, and reporting to management, guests’
safety, entertainment, and hygienic environment are such CSR frameworks for the hospitality
industry of Hilton hotels. It is highly committed reducing the external environmental risks, like
industrial effluents, CGH emissions, and waste disposable to protect the societies and
communities as well as guests’ security from the fire, accidents, theft, or violence by providing
the proper security arrangements for their safety and well-being(Godfrey, Merrill, and Hansen,
2009). Hilton adopts the environmental-friendly programs and green environmentalism in its
hotels to promote the sustainable environment that is clean, safe, and eco-friendly for the
preservation of the needs of the future generations.

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Conclusion
From the above discussions, it is concluded that NAB is a Leading Australian bank that discloses
its corporate sustainability report through the CSR practices, good corporate governance
structures, stakeholders’ satisfaction, customer values, and the sustainable environmental
practices. This report described the disclosure and measurement components for accounting
policies of both companies and comparison of the accounting policies for the plants, equipment,
and property. The CSR report of NAB 2017 presented the corporate governance structures by the
board of members for planning the CSR activities to sustainability. The sustainability report of
NAB represents its ethical, social, and environmental responsibility as well as the risk
management procedures for the company. There are several strategies were presented to enhance
the social and environmental performance of NAB. Finally, it was examined that the CSR
voluntary disclosures are in different formats for different companies as well as various
industries because of different approaches and processes to the environmental and corporate
social performance for the companies.

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