AGL Energy: CSR Framework Analysis and Integrated Reporting

This report provides a comprehensive analysis of AGL Energy's Corporate Social Responsibility (CSR) practices, focusing on its environmental impact as highlighted in a newspaper article. It examines AGL's company background, the context of the news story regarding its pollution levels, and the application of a CSR framework. The report delves into integrated reporting practices, the selection and relevance of management accounting theory, and its predictions in relation to the issues faced by AGL. It explores the reasons for addressing social, technical, and accounting problems, offers comments on the existing financial framework, and concludes with recommendations. The report also includes a discussion on the implications of AGL's actions, particularly its investments in coal mining, and their impact on its environmental performance and market image. The report highlights the importance of management accounting in predicting future outcomes and formulating effective strategies to address challenges related to pollution and sustainability.

Report

Table of content
 Introduction
 Company background
 Newspaper story
 Discussion of CSR framework
 Integrated reporting
 Choice of theory
 Relevancy of theory
 Description of theory and its predictions
 Literature which covers predictions that are directly related to news story
 Reason behind addressing social, technical, accounting problems identified in the
news
 Comments to existing financial framework
 Conclusion

Introduction
Corporate social responsibility can be defined as an approach which contributes in
sustainable development by delivering social, environmental and economic benefits
for all the stakeholders such as customers, employees, investors etc. Under this
approach business entities promise to spend a fixed percentage for welfare of
society (Butler, 2014). The organisation which is selected for this report is AGL
Energy which is an Australian Listed Public company. This report is based upon a
newspaper article in which it is being mentioned that AGL Energy is one of the
largest polluters in Australia. Various topics are covered under this assignment such
as newspaper story, CSR framework, integrated reporting etc.

Company background
AGL Energy is an Australian company which is involved in the
activities of generating and retailing electricity and gas for commercial
as well as residential uses. In October 2006 two companies were
merged and created two new company which are AGL Energy Ltd. and
restructured Alinta Ltd. Those organisations were Australian Gas Light
Company and Alinta Ltd. AGL is listed upon Australian Stock
Exchange. In year 2012 AGL acquired two business entities, Loy Yang
coal mine and Loy Yang A Power station.

Newspaper story
According to a newspaper article as all the business entities are becoming green and
at the same time AGL took step to become Green to Black as its CEO Brett Redman
bought a coal mine company which is Loy Yang. Most of companies are trying to
reduce use of carbon but AGL purchased a coal mining organisation which created
various issues for it which are related to its Corporate Social Responsibility. It has
resulted in huge pollution and AGL became the part of top ten companies in
Australia which are known as polluters. According to Australian Conservation
Foundation it is one of the biggest polluters in the nation which is using outdated
and polluting techniques in order to generate huge profits.

Discussion of CSR framework
For all the business entities it is very important to spend a fixed percentage of their
profit for welfare of society in order to establish a positive market image. It covers
different areas such as social, environment and economy. The framework of AGL
Energy have two different areas which are covered by it. These are Internal and
external environment. Both of them are described below:
Internal environment: Under this type of environment AGL focuses on
internal corporate structures and policies which are formulated by executives in
order to sustain in the market.

Continued…
External environment: Under this type of environment AGL try to fulfil all
the requirements of CSR against society and customers by following all the
rules, regulations and laws. It provides its services and products at affordable
prices in order to be on the top of the industry. In order to be environmental
friendly, the company is taking strict actions to reduce its greenhouse gas
emission by offering secure and affordable energy to the clients. It is committed
to achieve excellence in environmental management and performance.

Integrated reporting
From sustainability report of AGL Energy it has been analysed that organisation has
promised and committed various things but it is not able to reduce its pollution
which is affecting the environment. It is required to find ways in which it can
minimise impureness which is created by it. Making promises is not a solution for
the issues which are taking place and affecting the environment. It is vital for AGL
to focus on environment protection and reduce use of carbon which is resulting in
pollution. As analysed from new story According to Australian Conservation
Foundation it is being rated as third, worst polluter in Australia. In order to remove
name from this list it is vital to identify the causes which are resulting in this
problem (Courtice, 2014).

Choice of theory
As AGL Energy is dealing with the issue of higher carbon uses and pollution
which has taken place due to bad decisions which were made by CEO Brett
Redman, of buying coal mining and power companies. The best suitable
method of dealing with this situation is using accounting theory such as
management accounting which helps top executives to formulate strategic
decisions for betterment of company. It is the theory which is being selected for
AGL Energy in order to respond the issue identified from news story (Dimitriou
and Kassomenos, 2014).

Relevancy of the theory
Management accounting theory is relevant to the news story and the issues
which are affecting AGL Energy. With the help of it social and ethical issues can
be dealt effectively. Main function of this theory is to render appropriate
information of the company to the internal stakeholders which can help them to
take effective decisions for betterment of company. T plays a vital role within the
company as it helps to respond social and ethical issues properly. Its relevancy
level with the issue of carbon uses and pollution made by AGL Energy is very
high which affects its market image (Dupont and et.al., 2016).

Description of theory and its predictions
Management accounting is a technique which is used by internal
stakeholders to form decisions for betterment of organisation. It
guides managers and top executives to formulate such strategies
which could be implemented to deal with challenges which are
affecting performance of the company. They can get detailed
information regarding business operations and activities which are
conducted by organisation. It is an accounting theory which could be
used by CEO of AGL Energy to deal with the issue which is being

Continued…
 Management accounting is used by business entities to predict future outcome of
a step which is taken by top executives of the company. With the help of this
technique they can analyze that their step will result positively or negatively. As
CEO of AGL Energy had taken a decision of buying coal mining companies and
management accounting can help to measure success of this decision as it
provides detailed information regarding company and its operations (Martin and
Rice, 2015).