Corporate Accounting: Comparative CSR Report Analysis of Two Firms

This report provides a comparative analysis of Corporate Social Responsibility (CSR) reports from two companies within the mining sector, Sandfire Resource NL and BHP Billiton Limited. The analysis examines the quality and quantity of information disclosed in their CSR reports, considering the adoption of Global Reporting Initiative (GRI) principles and corporate governance practices. The report highlights the pressures faced by the mining industry regarding CSR reporting, including environmental concerns and stakeholder expectations. It compares the companies' approaches to employee safety, health, and environmental sustainability, drawing conclusions about the reliability and effectiveness of their CSR reporting. The report uses literature review and accounting theories to support its analysis, considering the institutional and structural pressures influencing the firms' pursuit of corporate social responsibility and sustainability accounting. It concludes that CSR reports are crucial for building stakeholder confidence and ensuring long-term business viability.

CORPORATE ACCOUNTING

Contents
ABSTRACT...............................................................................................................................3
INTRODUCTION......................................................................................................................4
COMPARITIVE ANALYSIS....................................................................................................5
Sandfire resource ln................................................................................................................5
BHP Billiton Limited.............................................................................................................5
PRESSURE OF CSR REPORTING ON CSR REPORTING...................................................6
COMPARISION........................................................................................................................7
CONCLUSION..........................................................................................................................9
Bibliography.............................................................................................................................10

ABSTRACT
Corporate social responsibility is one of the most important issues that arise in most of the
organisations. Every company has different policies relating to CSR that is adopted by them
which reflects their involvement in social responsibility. It is important for the company to
look after the interest of the stakeholders and should evaluate the impacts of its activities.
Therefore, in order to know whether the company is fulfilling the expectations of its
stakeholders it is important to look after the non financial information also. It helps the
stakeholders to get a transparent picture of the company’s activities which helps them to take
decisions which are most appropriate.

INTRODUCTION
The report that the company prepares stating about its social, environmental and operational
activities is known as corporate social responsibility. It is important for all the stakeholders
whether external or internal to get the financial and non financial information which would
help them to deal with the risk arising. GRI or Global reporting initiative are the principles
that are followed for the purpose of corporate sustainability. The environmental as well as
social obligations that are performed by the companies must be accounted for in the most
accurate manner. (Armstrong, 2015)
There are different formats used in order to provide non financial information through annual
reports or sustainability reports. The adoption of GRI principles has proved to be beneficial
for the government and also the businesses as it helps to identify the sustainability issues and
spread awareness to the public. (Case, 2012) The adoption of these standards has helped the
businesses to disclose the important information and also to manage the sustainability. There
are three universal standards that the company needs to comply with so that it can provide
correct quantitative and qualitative information. They are-
 GRI 101: This standard is considered to be the foundation of the CSR report.
 GRI 102: This standard comprises of the general disclosures that are required to be
made by the company.
 GRI 103: This standard stands for ‘management approach’ which depicts the impact
of the activities carried out by the management.
In a similar sense, we can define corporate governance as a set of guidelines and processes by
which the company is being controlled as well as guided. It mainly focuses on satisfying the
stakeholders – both internal and external. Corporate governance reflects the action plans that
are taken in order to achieve the company’s objective and also helps to measure the
performance of an entity. (Dash, 2016)

COMPARITIVE ANALYSIS
In order to compare the corporate reporting and sustaibility of two companies we need to
carry out a comparative analysis. The companies that are selected by me fall under the same
sector which is the mining sector. The name of the companies is Sandfire resource NL and
BHP billiton limited. Now let us know about both the companies. (Donanldson, 2012)
Sandfire resource ln
Sandfire Resource Nl is one of the most leading producers of copper in australia. The
company is also involved in exploration and mining of minerals. This company is the owner
of DeGrussa Copper-Gold Mine which has a production of the best quality copper. This
company has performed phenomenally in the past 3 years which could be seen by the
movement of development, drilling, financing and construction activities. (Freeman, 2011)
The achievements of this company were so remarkable that it had set a benchmark for the
other companies that are based in Western Australia. The company has no only focussed on
earning generating higher returns but also at satisfying the stakeholders of the company by
making optimal use of its resources.
BHP Billiton Limited
This company is also one of the leading company of resources in the entire world. It is large
company which is also involved in extraction and exploration of minerals. There are about
60000 employees employed in this company who are posted mainly in America or Australia
and their headquarters is situated in Melbourne. The main resources of the company include
iron ore, petroleum, coal and copper. The main objective of the company is to satisfy the
shareholders by the way of wealth maximisation by processing, exploring and developing the
natural resources. (Gow, 2016)

PRESSURE OF CSR REPORTING ON CSR REPORTING
It has been observed in the past that there were various issues in relation to CSR in the
mining and resources sector. There are many mining operators who are willing to comply
with these CSR issues but the companies are a little afraid of being hurt in the long run. If
the company fails to comply with CSR obligations then it might get affected adversely. This
might lead to loss of reputation of the company and loss of trust of the stakeholders which is
very difficult to be earned back. (Hubig, 2013)
The mining industry is facing a lot of pressure from certain environmentalist, activists and
various other bodies that provide social services like NGO’s and other government
legislation. The reason behind this pressure is that there is a huge environmental issues
involved in the mining business such as the change in the climatic condition and also
pollution. (Mattessich, 2016) There is one more issue apart from the environmental issue
which is the global expansion because the lands that are discovered for expansion have the
chances of being claimed by the public because of the growing population. It is not only
important for the mining companies to comply with the standards but also the contractors
should comply with it in order to avoid severe adverse situations. If the companies involved
in the mining industry comply with the objectives of the CSR then it expected that it will
have a good reputation in the market. This might be an additional point for the company over
the competitors. Therefore, we can draw a conclusion that a lot of pressure is borne by the
mining industry and its operators and the reports prepared by them not help them to enhance
their public relation. (Noreen, 2015)

COMPARISION
The Global Reporting Initiative principles have been followed by both the companies.
Sandfire Resource LN and BHP Billiton limited both the companies usually conduct regular
meeting with its stakeholders in order to understand the key sustainable issues. After carrying
out a proper comparative analysis of the reports prepared by both the companies it has been
found that the sustainability report of BHP Billiton is more impressive than Sandfire resource
Ln both in terms of quantity as well as quality. One of the many objectives of CSR is to
ensure that employees of the organisations stay safe and healthy. (Pratt, 2009) On reviewing
BHP’s report it has been found that the discussion that has been held is divided into two
sections. The first one is approach and the second one is performance. The Approach section
of the report states the various activities that they undertake such as vaccinations, gym
facilities and providing healthy food. It also states about the various issues that the company
faces and how do they resolve them. The performance section of the report provides the users
with the qualitative information which is represented in the form of graphs which depicts the
improvement made by the company. It has been observed that the occupational illness of the
employees was 4.2 per million hours worked the year 2017 which is 18% more when
compared to the year 2016. In the case of contractors, it was 1.43 per million hours which
shows that there was a 23% increase when compared to the previous year.
Now let us review the report of Sandfire resources. The report majorly consists about the
mission and vision of the company which means what are the objectives of the company, the
ways of achieving it and what does the company ensure. Supervisors review and awareness
programs are two of the activities that are undertaken by the company. (Rogers, 2015) The
mining companies has many cases of skin disease, hearing loss and silicosis but it is
surprising to see that the company also accounts for minor injuries that occur to the
employees. On reviewing the report for FY 2017 it was observed that there were no injuries
or illness during this financial year. One more positive point was noticed that is the total
recordable injury frequency rate has reduced from 7.08 per million hours to 5 in the FY 2016.

From the above diagram, it is understood that there was a further fall in the total recordable
injury frequency rate. The TRIF fell from 5 per million hours to 4.2 per million hours. So we
can conclude that there was an overall improvement of 9% over the period of 5 years.
(Schnapf, 2011)

CONCLUSION
It is a difficult task to conclude about the reliability of the reports that is prepared by the
management. The companies that are chosen operate at two different levels so it is obvious
that the company operating at a higher level will obviously bear more risk than the company
operating at a lower level.
After taking into consideration the current scenario, it has been proved that CSR reports are
necessary to win the confidence of the stakeholders and also to survive in the long run. A
business always requires high growth rate in order to flourish therefore, it must always keep
the stakeholders satisfied.

Bibliography
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Accounting and Economics , 60 (1), 1-17.
Case, P. (2012). Environmental Risk Management and Corporate Lending: A Global
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Hubig, A. (2013). Introduction of a New Conceptual Framework for Government Debt
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