BUACC5933: Cost Management and Sustainability Report Analysis

This report delves into the critical intersection of cost management and sustainability, focusing on the Australian accounting profession's stance on corporate social responsibility (CSR) and environmental accountability. It examines how accounting professionals can drive sustainability within businesses, emphasizing the importance of ethical practices and transparent reporting. The report analyzes the initiatives of the Australian accounting profession, including those by CPA Australia and the Institute of Chartered Accountants, in promoting sustainability through reporting frameworks and skill development. Furthermore, it uses BHP Billiton Ltd as a case study, scrutinizing its sustainability practices, as detailed in its 2018 sustainability report. The analysis covers the company's commitment to CSR, its environmental policies, and its approach to stakeholder engagement, highlighting the role of sustainability in long-term value creation and ethical investments. The report also touches upon the integration of sustainability into accounting curricula and the role of accounting bodies in fostering sustainable practices in the business environment.

Running head: COST MANAGEMENT
Cost Management
Name of the Student:
Name of the University:
Author’s Note

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Synopsis
The main points which would be covered in the assessment is related to sustainability practices
which are followed by a business and how important is sustainability for business environment.
Further the role of Australian Accounting profession in promoting sustainability would be
discussed in details along with the impact of the same in the business environment. In addition to
this, the discussion would be covering the example of BHP Billiton ltd in regards to
sustainability policies which is adopted by the business. The policies and practices of BHP
Billiton would be discussed and for the same purpose corporate sustainability report of the
business for the year 2018 would be considered for analysis.

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Introduction
The focus of the assessment is to understand the role of sustainability and corporate
governance in a business. The assessment would be discussing how accounting profession can
contribute towards sustainability practices in a business and implementation of corporate
governance in a business. Corporate Social Responsibility practices are gaining importance in
corporate business as the same is related to the contributions which is made by a business
towards the society (Williams & O'Donovan, 2015). The corporate social responsibilities require
every business to act in the best interest of the society and stakeholders and ensure that the needs
of the shareholders are considered in the decision-making process of the business. In addition to
this, the discussion would also be including analysis for the business of BHP Billiton ltd which is
engage in the business of mining and exploration. The steps which are considered by the
administration of the emtity towards corporate social responsibility are considered in the
discussion below:
Discussion
In the past, most of the companies conducted their operations for the purpose of earning
maximum profits and achieving growth in the operations of the business. These companies did
not consider the welfare of the stakeholders or the society while taking business decisions. In
fact, the companies also did not consider the impact which the activities of such businesses had
on the resources and environment as a whole. It was after the corporate scandals of Enron and
Worldcom took place, that emphasis was provided on bringing about ethical practices and
sustainability for the process of the business. The concept of sustainability states that the
business should operate in such a manner with the current resources so that the ability of the
future generation to utilize such resources is not compromised. In addition to this, Corporate

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social responsibility was also given importance as it was the responsibility of businesses to
consider the needs of the society and contribute towards the same. There are numerous countries
which have successfully adopted such practices and among such countries Australia is also
considered to be one of the countries which strongly puts emphasis on sustainable practices and
Corporate social responsibility (Schaltegger, Burritt & Petersen, 2017).
One of the key strategy which is followed by the Australia Government was the
introduction of National Action Plan for living sustainably which aimed to developed sustainable
practices in business environment. This action plan formulated by the government aimed to
spread knowledge regarding sustainability practices by learning and education. The accounting
professions plays a vital role in the operational procedures of the entity as the same records the
financial transactions of the corporate entity (Bepari & Mollik, 2016). In addition to this, the
accounting system allows the management to report in an appropriate manner, follow a
regulatory framework which can help the users to make proper decision regarding the business.
Therefore, it is necessary for accounting professionals to adhere to corporate social
responsibilities of a business and follow a practice of sustainability in the operations of the
business. The initiatives which are taken by accounting professionals can bring about major
changes in the sustainability practices which is followed in a business environment.
The role of an accountant is regarded to be very important from the financial point of
view and further it is also considered to be one of the profession which has the impact on the
operational activities of the business. There needs to wide scale changes in accounting system in
order to make businesses understand the importance of sustainability practices in the operations
of the business (Leong & Kavanagh, 2013). One of the steps which can be taken by accounting
bodies in order to incorporate sustainability practices in a business is by incorporating a

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sustainability model in accounting courses for students. This would become a part of their
learning curriculum and thereby developing the accounting knowledge along with a need for
sustainability procedures in the system of the business. Professional learning qualifications and
university degree accreditation is one of the steps which can be taken by accounting bodies for
encouraging sustainability proceedures in a business organization. In addition to this, further
steps can also be taken by accounting boards for the purpose of promoting sustainability
practices in a business. A step which was taken by the Institute of Chartered Accountants of
Australia in 2008 was the launching of Broad Based Business Reporting which had provided
emphasis on sustainable practices of accountants in business environment. Similar CPA also had
taken a major step in 2009 when it issued its annual report for the previous year following the
Global Reporting Initiative (GRI) principles which is mainly associated with sustainability
practices in a business (Collison, Ferguson & Stevenson, 2014). It is to be further noted that
accountants also play a vital role in globalization and it is therefore the main reason that global
students have keen interest in accounting.
Sustainability practices are also related to environmental issues and if the practices are
closely followed that the negative impact on the government would be significantly less. The
climate change and other environmental concerns also have their own political economic impacts
and the same comes with some political or social costs. It is often seen that the environmentally
degraded area is also not a suitable location for establishing or conduct a business. It is therefore
said that the economic impacts related to environmental issues are subtle. It is for these reasons
that the role of an accountant becomes significantly important. In addition to this, another major
driver for sustainability in accounting and reporting framework is the global financial crisis
which has taken place over the years. Some of the significant crisis which has come to light are

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Enron, Worldcom and several others which has highlighted the failure of the accounting system
shows lack of transparency and accountability on the parts of the companies. One of the steps
which can be taken by accounting bodies to counter such corporate scandals is to develop a
reporting framework which promotes transparency and accountability in reporting supported by
proper disclosures so that complex treatments can be identified and understood. Global
Reporting Initiatives (GRI) have been introduced for the purpose of improving the reporting
framework and the same also involves considerations of sustainability. In addition to this, some
of the important tools which have been introduced for promoting sustainability practices in
reporting are triple bottom line reporting, ecological foot printing, social auditing, balanced
scorecard approaches and sustainability assessment models (Wells, 2013). Therefore, the
discussion appropriately shows that the accountants and accounting profession can make rapid
changes to implement sustainability operations in the entity.
The accounting profession in Australia has taken major strides to promote sustainability
practices in the business environment. The Australian accounting systems has adopted the
principles which are covered in Global Reporting Initiatives so that sustainability level can be
maintained in the workings of the business. Further the economy of Australia has responded to
environmental costs and some of the companies operating in Australia such as BHP Billiton ltd
and Rio Tinto Ltd has appropriately shown the environmental and economic costs of the business
in the financial statements of the business. The influence of the financial sectors and even the
investors have been significant drivers for change towards sustainability and the term which they
are using for such type of investment is ethical investments. These factors suggest that the
finance market of Australia is ready for changes in the business environment. In order to promote
sustainability practices in an organization emphasis is being provided to corporate social

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responsibilities of a business and how well the business is able to maintain the same. Research
and academic records shows that if proper sustainability practices are followed in a business
organization that the share valuation of the business is enhanced and the business is able to create
a good reputation in the market. The Financial Services Institute of Australasia (FINSIA) has
maintain such success stories of how sustainability and good corporate social responsibility
strategies can have a positive impact on the operations of the business.
Therefore, it can be said that the accounting profession in Australia is all set to lead the
way towards sustainable practices in a business. The two principle professional associations of
Australia CPA Australia and the Institute of Chartered Accountants in Australia are aware of the
significance of issues in sustainability and therefore the two bodies are focusing on development
of necessary skills which can help in promotion of ethical and environmental friendly practices
in the entity. Both the bodies have adopted sustainability reporting principles and also taken up
membership in Accounting for Sustainability forum. This shows the accounting system which is
followed in Australia is Dedicated towards maintenance of good sustainability practices in the
operations of the business.
Sustainability Practices of BHP Billiton Ltd
BHP Billiton Ltd s considered to be one of the biggest companies which is engaged in
mining and exploration for minerals, petroleum and gas. The company has a larges scale of
operations and is a leading business in terms of revenue generation is Australia. As the main
occupation of the business is related to utilization of the natural resources of the earth,
sustainability practices and proper adherence to corporate social responsibility of the business
becomes significantly important. The management of the company provides special emphasis on
sustainability practices of the business and also takes steps for implementing the corporate social

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responsibility policies of the business. The sustainability report of BHP Billiton ltd for the year
2018 is considered in order to get an insight on the policies and practices which are practiced by
the administration of the entity (Bhp.com., 2019). The goal of the business is to create long-term
value for its shareholders and appropriate utilize the natural resources which are available to the
company.
The sustainability report for the organization demonstrates that the administration of the
company is dedicated towards appropriate Corporate social responsibilities and wants to
contribute towards the welfare of the society (Høgevold et al., 2014). The management of BHP
Billiton has contributed around 1% of the pre-taxed profits of the business towards community
services which amounts to US$ 77.1 million. One of the core policies which is followed by the
management of BHP Billiton is to maintain the health and safety standards of the employees
first, being environmentally responsible and also participate in the needs of the society. The
company in order to maintain sustainability in the operations of the business appropriately
manages the long-term assets of the business so that the business is able to create ling term value
from the application of the same. The operating model which is followed by the management of
BHP Billiton is effectively shown below:

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The management of the company also considers the environmental impacts of the work
projects and mining actions which are started by the business. The senior management
undertakes restoration projects on the sites in which the business has carried out operations. The
management of the company also considers the impact of the activities on the environment and
takes every effort to reduce the greenhouses gases to the atmosphere. The business also has a tie
up agreements with numerous environment support institutions so that the business of BHP
Billiton can contribute to the same. This shows that the business of BHP Billiton is dedicated
towards sustainability approaches.
One of the lapses for the business which has attracted significant costs for the business is
the lawsuit which the business faced due to the tragedy which took place in Samarco dam
collapse. The management of the company was sued for a legal lawsuit of $ 5 million which was
for the victims of the tragedy (Watts, 2018). If the case is lost by the business, then there would

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be a serious fine to be paid along with considerable loss to reputation of the business. It is after
this incident that the management of BHP Billiton looks to incorporate procedures of
sustainability so that the business is able to demonstrate that the management is dedicated
towards the needs of the society. The management of the company has formed a sustainability
team which looks after the sustainability practices of the business and monitors whether the same
is being implemented or not. The Sustainability Committee also ensures that the management of
the company oversees the health, safety, environment, community (HSEC) and other human
rights matters in an appropriate manner. In addition to this, the management of the company has
also established its own forum so that sustainability practices in the operations of the business
can be appropriately be established in the operations of the business (Ortiz‐de‐Mandojana &
Bansal, 2016). In addition to this, the management of the company is also dedicated to ethical
standards as the management of the company has established its own set of code of conduct rules
which every employee of the business needs to follow while conducting the operations of the
business. The management of the company closely follows the principles of transparency and
accountability in the operations of the business (Matos & Silvestre, 2013). Therefore, the above
discussion appropriately shows that the management of BHP Billiton is dedicated to sustainable
practices in the operations of the business and takes all necessary steps towards ensuring that the
business is able to make contributions to the society.
Conclusion
The above discussion clearly shows the importance of accounting professions in paving
the path for sustainability practices in Australia. The discussion revolves around the steps which
can be taken by accounting profession for promoting sustainability practices in the business
environment and also why is it important for accounting profession to lead the way. The role of

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Australian Accounting bodies is also clearly shown in the discussion in implementing and
adopting sustainability practices in a business. The discussion also shows steps which are taken
by the management of BHP Billiton ltd for promoting sustainability in their operations and also
steps taken by the management for protection of the environment.

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