Cost and Management Accounting: CSR and Sustainability in Australia

This report delves into the critical role of accountants in corporate social responsibility (CSR) and sustainability, particularly within the Australian context. It highlights the increasing importance of CSR, encompassing ethics, governance, and equal opportunities, and its link to social and environmental accounting and reporting. The report discusses frameworks like AccountAbility 1000 and the Global Reporting Initiative (GRI), emphasizing the GRI's role in standardizing social and environmental business information. It examines the stances and initiatives of Australian accounting bodies, such as CPA Australia and the Institute of Chartered Accountants in Australia, on CSR and sustainability. The report further explores the potential role of the accounting profession in this context, including the need for enhanced training, development of sustainability-specific regulations, and proactive business support. Finally, it uses BHP Billiton as a case study, evaluating its social and environmental accountability, and the challenges and opportunities for the accounting profession in promoting sustainable development. The report concludes with a call for the accounting profession to embrace the evolving landscape of sustainability to ensure its continued relevance and value to society.

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The accountants today have a major role to play when it comes the corporate social
responsibility. This can be done through the way of understanding and making the company
understand and make them conscious about what they do. They hold the companies
responsible for whatever they do, no matter what. Generally, the responsibility of the
accountants is to report and prepare the final accounts but nowadays, they are working more
closely with the companies and the regulatory bodies and they are in the front seat when it
comes to the research and the theory in the social and environmental accounting. But now,
even the practitioners and the professional accountants have started to take interests in
compliance of these topics. This is the work now which helps in the broadening of the role of
accounting. The term of corporate social responsibility is the one that helps in the revolving
of the companies in and around the society. This also includes the interaction of the company
with the society. There are several topics that are included in corporate social responsibility
today which are ethics, governance, equal opportunities etc. when it comes to the perspective
of corporate social responsibility, then there has to be an amount of consideration which is
necessary and the same is linked with the social and the environmental accounting and
reporting. Social accounting is something which developed during the early years of social
responsibility. These are the social issues that were researched around the accounting into and
then the environmental aspects stepped in.
As the forms of social accounting increases, the frameworks and the compliance and the
reporting requirements also undergo a change since these help the companies in developing
the social and the environmental information. The Accountably 1000 framework comprise of
a set of standards that concentrates on the performance indicators, targets and the reporting
systems. This helps the engagement of the stakeholders. The Global Reporting Initiative
helps in the providing of the guidelines for the reporting of the social and the environmental
information. The country of Australia had developed the triple bottom line of reporting to go
hand in hand with the GRI which was successfully developed in the year of 2003 by the
environment of the country. The GRI states that each company is duty bound to report on it
economic, environmental, social performance and this forms the part of the routine and the
comparable information. Hence, these companies today provide the sustainability reporting
framework of which the sustainability reporting guidelines are followed and this helps these
companies in expressing the information about their sustainability performance and also,
provides the stakeholders with a universally accepted and comparable framework. There are
about 11 reporting requirements which includes the auditability, completeness, relevance,

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accuracy etc. the reporting under GRI entails the different levels of application. The
importance of this is the fact that the company which is reporting the facts using the GRI
rules necessarily would not follow the rules of the company that is following the GRI
framework. Each and every company also has to report the level of reporting that it has been
following. Level A is the most comprehensive one which indicates that each company must
respond to every indicator and report on it and also, explain the reason behind its materiality
to their business. The level B companies have to report on 20 indicators and includes the
inclusion of one indicator from each area. At level C, the companies have to again report on
10 indicators. The C level companies do not have to disclose their management approaches to
sustainability. Also, they do not have to comply with the guidelines, principles, accuracy or
even commit to the production to a balance report (A. Tilt, 2015) The GRI is one of the most
successful attempts till date and aims at standardising the information with regard to the
social and the environment business facts. When these were first introduced, they were
labelled as being complex but as the time passed on, it started being considered as being the
concept which ensures transparency. The accountants observed that the reporting on social
and environmental performance was very low in the country of Australia when compared
with the other British companies. But then the financial rpeoritng in the country of Australia.
Also, while the external reporting was being done on the social and the environmental issues
by the financial accountants, the management accounts were included in the internal
measurement and identification of the social and the environmental reporting. The concept of
corporate social responsibility is the one wherein the system allows the current accounting
along with the economic numbers to be converted into the actual costs and the benefits that
would indicate the environmental social externalities in order to get the prices right. This
helps in making the social costs more visible and helps the people in making decisions
("CORPORATE SOCIAL RESPONSIBILITY IN AUSTRALIA", 2019).
These companies must inform their investors about the following risks of sustainability:
 The companies must be encouraged to include the performance measures related with
the corporate responsibility in the packages of remuneration.
 The government of the country should be able to attempt the quantification of the
benefits of corporate responsibility reporting.
These were the mandatory reporting requirements that were supported by all the groups of
stakeholders. CPA Australia put this information as a challenge in the role of accounting in

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the terms pf capacity for the providing of information which underpins the sustainable
development initiatives and the commercial activities that have a major impact over the
environment. CPA Australia was of the view that the companies do not have adequate
resources to comply with this mandatory reporting. On the similar lines, the other
professional accounting bodies, such as the Institute of Chartered Accountants in Australia
has a very piece of information with regard to this topic on its homepage. They do not
support the social and the environmental topics much. There are some other professional
accounting bodies that supports and encourages the mechanisms that are used for the
purposes of promoting the sustainability development and also challenge and provide
opportunities for accountants that they represent. These go on to include the benchmarking,
tradable permits etc. (Lemus, 2016).
Also, across the globe, the Association of Chartered Certified Accountants held international
awards for sustainability reporting. And this draws the GRI guidelines in their analysis. The
main aims of these include recognising the companies that report and disclose the
environmental, social and the full sustainability, encourage the initiatives to take up the
environmental, social and sustainability reporting initiatives and raise awareness about the
corporate transparency issues.
The professionally qualified accountants today are included when it comes to the
measurement, recording and the interpretation of the issues connected with sustainability.
There are many big firms that are also connected with the different aspects of sustainability.
The smaller firms see this as a waste of time and have not experienced the demand for the
services in this area. This is the demand which is expected to increase as the result of the
taxes, instruments, permits and the allowances. History is evident that different frontiers of
accountancy have helped in meeting the new demands and providing response to the
changing business needs that continue to expand and also respond to the changing laws and
regulations. These are the professionally qualified people that use their judgment and skill in
order to tackle the new problems and also apply the new expertise that they have acquired
during the course of their experience. The increase in the importance of the environment now
and the social responsibility of the company, there are many issues that have been raised at
the request. These are connected with the business risks and hence this causes a concern of
the accountants. The profession of accounting plays a major role in the development of these
rules and regulations. This has served as the guidelines, standard and the frameworks laid
down for the financial reporting. This role has also been linked with the corporate

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governance. Whenever there are some technical issues involved then it is always
recommended to follow the expertise and the guidance of the other experts. The European
and the global initiatives, have expressed their interest in the introduction of prohibitions,
regulations and the taxes that goes on to move towards the sustainable development. There is
an existence of many different mechanisms for the building up of the sustainability
infrastructure which works well with the markets. The underpinning of all of these
mechanisms forms the part of the internal and external internal and assurance. The
professional accountants have a great role to play when it comes to the dvelo0emntx
understanding and the opportunities of all of the mechanisms that form the part of sustainable
infrastructure. In the case of the various different rules and regulations along with taxation
rules, the accountants would always be involved in providing the public with an advice of
such an implementation. There are some questions about the working of these mechanisms
and the effectiveness of the approaches involved. There has been an introduction of new
requirements such as the statutory OFR that would bring in the accountants face to face with
the management of the company and they would be able to address the issues with regard to
environment and social issues that have been adopted by the directors in deciding whether
there is a sufficiency in the disclosures of the relevant rules and regulations or not. Through
an entire understanding` of the business as a whole and the relevant rules, regulations, the
accountants would be the first people to be called for advice. The obtaining and the providing
of the information about the various measures that exists clubbed with the related
interpretations would serve as important element for the role of the accountant and this would
exist both in the business as well as in the practise.
The issues with regard to sustainability represents a new market force for the profession. The
internalisation of the various external costs such as the tradable allowances along with other
mechanisms would describe in the report would require an advice of the accountants. In the
years to come, there would be a requirement of reporting on the management information
systems and the control that would be required to be included in the environmental and the
social data which would again require the advice of the accountants (Xydias-Lobo & A Tilt,
2018). The accountants are very well placed and would be required to meet the needs for co-
ordination and integration. In case, the companies in the future ignore these reporting
requirements, such as the management systems, strategic planning etc, then these accountants
would diminish in the time to come. This would be a major loss for the society and for the
profession of accounting. The sustainability is an area for growth and there are many more

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professions that are active in the world and there is an opportunity for the profession of
accountant for the purposes of the following:
 Ensure that the adequate training is given to the ones that require and need it
 For the development of new rules and regulations and for the requirements on
sustainability, which is specific to the area of reporting and assurance
 Putting forward the proactive ideas in order to assist the business in achieving a better
sustainability management in order to support an effective business activity and
ensure a strong corporate governance (Ossei Kwakye & Edem Welbeck, 2018).
All of the above stated roles are of an utmost importance. Also, the main input of the
accountants is the role wherein he provides a useful amount of information and also assist in
its interpretations, but it is also true that there is a bigger picture and this needs to be balanced
in such a way that it proves to be a right thing to do ("Australia Sustainability Report 2010",
2019). In the nutshell, the agenda of sustainability is bigger and it is more complex than an
individual and this must be joined thinking of the companies as well of its boards. The
accountants today are very well provided with the support and also they help in the
promotion of this joined thinking. The management would face the demands for the
providing of some new information in order to support the decisions that they had not
addressed earlier. The environmental taxes. New categories of assets will need to be reported
externally by the companies. The compliance needs to be in line of the level of the company.
Information is required for the engagement of the stakeholders, the process of benchmarking
and the ratings would have to be gathered. The companies in the time to come would be
required to collect the maximum amount of information as the part of their regular reporting.
In this, the profession of accountancy would play a major role. This approach would be
adopted by the professional accountants which would serve as the primary thing that would
ensure that the mechanisms operate effectively ("Role of accountants in sustainability",
2019).
The company undertaken for review is BHP Billiton/. The main of the company is the
creation of a long term shareholder value through the way of discovering, acquiring,
developing and marketing the natural resources. This is done by the way of owning and
operating the large, long life. The company has a social license which is an informal set of
the way in which there is an existence of a relationship between BHP and the local, regional

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and the global stakeholders. This license has been built on the basis of the quality of the
relationships, operations and the environmental operations along with the various social
impacts and the benefits that the company rates.
In respect of sustainable development, the company ensures to take the desired initiatives and
challenges through the promotion of a sustainable development. The contributions include the
business activities involved are the products produced and the way in which they are
produced, the use of the host government taxes and the royalties that the company pay along
with the various direct and indirect employment opportunities that are created. It further
includes, the voluntary social investment by the company. This is the approach which means
that there is a genuine partnership and there is a focus on the governance, human capability,
social inclusion and the environment.
In respect of the climate changes, the company makes it a priority and work towards the
shared outcomes. The company is actively involved in the engagement in the governance of
the issues with regard to the climatic changes and the same is supported by the sustainability
committee. The management of the company is responsible towards the designing and the
implementation of these strategies to counter the changes in climate. The company has been
undertaking various initiatives towards the operational emissions which would serve as a key
performance indicator for the business and the performance against the targets of the
company which is indicated in the senior executive and the remunerations of the leaderships
(Cubby, 2019).
The company also invests in low emission technologies:
 Zero carbon electricity supply which includes the power to the company itself and
from the grids all across the globe. This contributes to 46% of the operational
emissions.
 Zero carbon material movement which includes the operational emissions from
consumption of diesel in the course of material movement. This contributes to 35% of
the operational emissions.
 Fugitive emission which is very challenging to reduce and contributes to 18% of the
operational emissions ("Sustainability report 2018", 2019).

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