Corporate Finance Report: Sustainability, Ethics of Boral & Brickworks

This report provides a comprehensive sustainability analysis of Boral Limited and Brickworks Limited, two building material companies listed on the Australian Securities Exchange. It examines their performance measurement, management compensation, and ethical practices based on their annual reports, sustainability reports, health and safety reports, and governance and remuneration reports from the past three years. The analysis covers environmental impact, social responsibility, and governance structures for both companies, comparing their approaches to sustainability reporting, greenhouse gas emissions, workplace safety, and board composition. The report concludes that Brickworks Company demonstrates better sustainability practices and overall performance compared to Boral Limited, recommending Brickworks as the more sustainable option.

Corporate Finance Assignment 1
Corporate Finance Assignment
Student (name)
Professor (name)
College
Course
Date

Corporate Finance Assignment 2
Executive summary
I was given the task of reporting the analysis of two companies which have been listed on
Australia's securities exchange; the Boral and the Brickworks Limited Companies. I was
supposed to say about their sustainability, performance, management compensation and ethics.
From the annual reports of the previous three consecutive years, I came up with the sustainability
reports, health and safety reports, and the governance and remuneration report. I compared the
statements from both companies and discovered that Brickworks Company had better results
than the Boral Company and it had a better performance than its rival company. I finally
recommended that Brickworks Company was more sustainable than Boral Limited Company.
Introduction
My report will entail the sustainability analysis of two companies, the Boral and the
Brickworks Limited Companies. I will first analyze each company individually, then compare
the results of the investigation in each company, and I will finally draw the conclusion on which
company has the best social, environmental, and governance sustainability.
Body of report
Analysis of Boral Limited Company
The Boral limited company has been fully committed to sustainability reporting because
the company realizes sustainability reporting is significant in determining their success in the
future (Henderson et al. 2015). As a result, the company has diversified their working conditions,
created a conducive working environment for their people, reducing environmental effects, and

Corporate Finance Assignment 3
approaching their operations in a socially ethical manner. We will give an outline of the
company’s sustainability report for the past three years on their workforce on a full-time
equivalence (Rao and Sudhakar 2017)
Financial years
Description 2015 2016 2017
Employees of Boral 8356 8334 11499
Contractors of Boral ~4400 ~4800 ~4800
Employees of JV 3676 3724 4976
Contractors of JV ~3000 ~3400 ~3400
The average length of time that the workers of Boral worked and women’s composition in the
company is outlined in the table below
2015 2016 2017
Australia 9.2 9.1 9.3
Boral’s working
women
14% 14% 18%
Boral’s women
working on board
38% 50% 48%
There has been a gradual increase in the number of workers in the company, and the number of
women working for the company has also increased.
Improvement strategies:

Corporate Finance Assignment 4
Environmental
For the past three years, the company has been committed. To agree to the set
environmental standards, rules, regulations, and laws (Wilson 2015). The company has set
standards to reduce the emissions of gases from greenhouses resulting from their operations. The
Greenhouse Gas (GHG) Emissions have been decreased for the last three years (). The table
below shows the amount of GHG emissions in a million tons of Carbon dioxide with their
respective years.
Financial years 2015 2016 2017
A GHG value in a
million tons
2.17 2.00 2.01
The company has developed new strategies which will focus on reducing the GHG emissions.
Social
One of the company's primary goals is to ensure that its people work in an environment
that is free from harm. The company has developed strategic plans to ensure that it achieves a
healthy and safe environment (HSE). The company's safety performance is marked by its TRFR
(Total Recordable Frequency Rate). The company’s RITR is determined by both its LTIFR and
MTIFR. The table below shows the company’s LTIFR and MTIFR values with their respective
years.
Financial year 2015 2016 2017
LTIFR 1.8 1.3 1.5
MTIFR 10.3 7.5 6.6

Corporate Finance Assignment 5
The company’s LTIFR reduced between 2015 and 2016 but increased slightly in 2017.
The company's MTIFR has been growing gradually over the years and thus has contributed to
the TRFR's decreasing values over the years. The graph below shows the outline of the
company's TRFR costs with their respective years.
Governance
The company's board of committees is divided into three main categories; the Auditing
and Risk Taking Committee, the Compensation and Nominating, and the Health, Safety, and
Environmental Committees. All these members review issues affecting the company for the
board's sake (Webb and Burton 2017). The graph below shows the composition of board
members of both genders.

Corporate Finance Assignment 6
The company had set strategies to involve both genders in its management and
employment opportunity. Below is a graph showing the composition of people employed in the
company of both sexes and their respective years.

Corporate Finance Assignment 7
The Company’s Transparency of policies
Boral company limited has made its rules and procedures very clear. Any breach of a
system will attract punishment. Boral limited company reports cases of violations of their
policies and punish them accordingly. Reports from the year 2015 had shown that about 20% of
employees are fired by the company due to a breach of systems. The company gives reports on
executive management who do not follow the company's rules and regulation. They publish their
names when they are submitting the annual reports as a punishment.
The sort of business the company takes
The company manufactures and supplies the materials for building and constructions.
The industry has a high environmental impact because it needs to access most raw materials
from the underground. The company mines these natural resources to acquire their raw materials,
and this leaves holes in the ground which could cause many waterborne diseases. The companies'
manufacturing activities' causes air pollution due to the gases emitted (Keen 2015). One of the
most challenging issues the company faces is how to minimize the emission of these gaseous
wastes to reduce pollution and hence create a sustainable clean environment.
The Executive Remuneration
I will give the remuneration report regarding Fixed annual Remuneration, Short-term
Incentive, Long-term Incentive, and TRI (Targeted Retention Incentive) for the past three years.
The target remuneration for both the CEO and other senior executive committee was the same
year 2015, and 2016 was the same.

Corporate Finance Assignment 8
This was different from the 2017 remuneration report whose CEO's target was 100% amount,
and the senior executive's target was between 35% and 50%.
The reaction of share price on the publicized breaches
The share price has been reacting to the company’s publicized breaches of the company's
policies over time. If the company's assets fail to meet its plans, the company declares that the
assets do not meet the company's laws. The share price has been taking advantage of buying the
company's assets at throwaway prices. In my view, I think this price reaction is unethical. I
would recommend the share price to give the company some time before it shares the company's
assets.

Corporate Finance Assignment 9
Analysis of Brickworks Limited Company
Environmental
There are many ecological aspects of Brickworks limited company. Some are by proper
waste disposal, less energy consumption, less water consumption, adequate utilization of
materials, and less emission of carbon dioxide. The emissions of carbon IV oxide in Australia by
the Brickworks Company could benefit from either direct or indirect consumption of fuel. The
graph below shows the comparison between the direct and indirect fuel consumptions over the
past three years.
The results show that the amount of carbon dioxide emitted from the manufacture of
bricks has been increasing for the past few years (Saltary and Thorpe 2016). Despite the
company’s efforts to minimize these emissions, their efforts have been fruitless, but the
companies have to strategize their plans.

Corporate Finance Assignment 10
The company has implemented several practices to minimize some environmental impact
of the company's operations. Some of them are; substitution of fuel, making energy more
efficient, recycling of water, recycling of raw materials, product development, and substituting
materials (Kumarasiri and Jobb 2017). The company submits its emissions every year, and it
complies with the NGERS (National Greenhouse and Energy Reporting Scheme). The table
below shows the emissions of the gases and the amount of energy used.
Amount of energy used
(*106)
The first emissions
(*106)
The second
emissions (*106)
The total
emissions (*106)
5.757576 0.256863 0.107365 0.364228
Social
One of the Brickworks Company's commitments is to minimize the health risk of their
workers and ensure their safety. The health improvement and safety maintenance strategy are
crucial in creating a sustainable working condition. The models for calculating the safety and
determining the health risks are the TRFR (Total Risks Recordable Frequency Rate), LTIFR, and
the MTIFR. The table below shows the composition of the LTIFR, MTIFR, and the TRFR value
within the three years.
Year 2015 2016 2017
LTIFR 2.0 1.6 1.3
MTIFR 20.2 17.6 15.8
TRFR 22.2 19.2 17.1

Corporate Finance Assignment 11
It is clear from the table that the health and the safety conditions at the company is
improving since the TRFR value has been decreasing over the past three years. A graph would
show a better correlation. Below is a chart of the above table (Ukwatta et.al 2018). The figure
shows a partial decline in the TRFR value every year, and this marks the company's ability to
sustain a clean and safe environment. The company has managed to create a clean, safe, and
healthy environment by encouraging its workers to consult the health workers regularly.
Governance
The company's board of committees is divided into four main categories; the Auditing
and Risk analysis, the Compensation and Nomination, the Independent Board and the Health,
Safety, and Environmental Committees (Backhouse and Wickham 2017). All committee
members review issues affecting the company for the board's sake. The graph below shows the
composition of board members of both genders.

Corporate Finance Assignment 12
An excellent executive composition would mean better sustainability of the company.
Transparency of the company
The company elaborates its policies. They also outline that any breach of their systems is
punishable, but they do not give a detailed explanation of how much action they take on any
breach of contract. Even then, we assume that the company would take a severe legal step on
anyone or any organization that breaks their policies.
The kind of business
The company designs, develops, manufactures, markets, distributes, and sells building
and construction materials (Henderson et.al 2015). Brickworks Company has a very medium
impact on the environment as compared to the Boral Company because it emits a secondary
volume of GHG emissions. The company also extracts raw materials through mining thus
leaving open holes on the ground which would be filled with water when it rains. These holes
could lead to the spread of waterborne diseases as well as the spread of malaria when it floods