Finance Assignment 1: BHP Sustainability Report Critical Review

This finance assignment provides a critical review of BHP's sustainability report, assessing its adherence to Global Reporting Initiative Standards and its approach to materiality assessment. The report evaluates BHP's performance across social, environmental, and economic dimensions, highlighting initiatives such as community investments, greenhouse gas emission reductions, and tax contributions. It also examines case studies on tailing storage facilities, corporate social responsibility, and legitimacy theory, exploring the challenges and opportunities for sustainable mining practices and corporate accountability. The analysis considers the perspectives of various stakeholders and the role of regulatory bodies in promoting responsible corporate behavior. Desklib offers a wide range of resources, including past papers and solved assignments, to support students in their academic endeavors.

Finance Assignment

1
By student name
Professor
University
Date: 25 April 2018.
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Contents
Critical Review on BHP.................................................................................................................................3
Other case studies on Sustainability............................................................................................................4
Paper 1: A case of Tailing Storage Facilities.............................................................................................4
Paper 2: Corporate Social Responsibilities: Alternative Perspectives about the Need to Legislate.........5
Paper 3: A test Of Legitimacy Theory.......................................................................................................7
Paper 4: A study Of a Multinational Gas Company..................................................................................8
References...................................................................................................................................................9
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Critical Review on BHP
From the thorough study and an analytical analysis of the sustainability report of BHP, we can
see that the report has been prepared with the help of and after considering, the guidelines laid
down by the Global Reporting Initiative Standards comprehensive-level reporting. The major
approach followed by BHP for reporting purpose are achievements, marketing and supply, the
assets, functions which are inclusive in nature and have been reported by entity as a whole in
comprehensive manner (Choy, 2018). The focal point of this report is assessment of materiality.
The major element considered during the assessment are understanding the factor that lead to
risk and analysing their strengths. Interact with the external as well as internal stakeholders of the
entities who plays a significant role in forming the crux of the materiality analysis.
As the BHP primarily responsible for safety and human right because of that reason, BHP
designed a separate name for itself. They are also accountable for the health and safety of its
employees and workforce and control over the environment safety. To achieve the objective of
sustainability there are many appropriate committees at appropriate levels (Farmer, 2018). This
committee involve the member who have specified knowledge and experience in the different
areas, which are significant in nature. Some of these committees are Sustainability Committee,
Risk and Audit Committee, Remuneration Committee. In the absence of expertise in any critical
situation, the entity also takes the help of external sources or forums for securing expert advice.
This assists an optimum decision-making. The foremost purpose of making sustainability report
to report all its targets and objective that the company want to achieve in the coming years.
The performance indicator indicates that the stakeholder of the company have an idea about the
success factor of the company. From the technical and cosmetic aspect, these are expressed in
terms, which are easy to understand from the viewpoint to public, and there is no room for
confusion. Sustainability essentially deals with social, economic and environmental components,
because of that reason it becomes extremely essential to analyse these component and study BHP
has implement on these three major guidelines (Grenier, 2017).
Social: At the time of saluting the tax, amount first the company need to transfer 1% of their
profit towards the upliftment of the society and to community related initiatives. A careful study
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and an analysis it has been concluded that the figure of investment in the year 2017 stood at an
impressive 80.1 million US dollars. In the year, 2012 due to potential hazards and workplace
related exposures have reduced by approx. 76% from their threshold limit. Time Company has
been achieved a good position. Apart from this, the company has improved Total recordable
injury frequency (TRIF) every year and the company carry out the same in future (Belton, 2017).
Besides this, they also assist local culture and extend their support, by way of investments for
their betterment.
Environmental: The major utility of these operation have reduced greenhouse gases emissions.
Every year because of these operations, 975,000 tonnes of carbon dioxide has been saved.
Therefore, from the environmental viewpoint it increases productivity and helps in overall
economic gains and the development of the economy. Besides this, the company to save
renewable source of energy use solar technology to the maximum extent. The goal of
rehabilitating 40,000 hectares of degraded land has been contemplated (Alexander, 2016).
Economic: The figures tax and royalties for the year 2017 stood at an impressive 4.7 million US
dollars. Contribution in the same manner to the economy of the nation as a whole, to protect it
and helping in overall development.
Other case studies on Sustainability
Paper 1: A case of Tailing Storage Facilities
The important area of discussion here is to analyse whether mining is possible in the manner that
affect the environment to a minimal and at the same time safeguarding the li livelihood of the
local community and consider the interest of general public (Schoenberger, 2016). In recent year
it is observed that most of the world’s mining related disasters owe their occurrence to the
tailings storage facilities because of all these reasons the author consider these as important
question. The author wants to illustrate this with the help of data (Sithole, Chandler, Abeysekera,
& Paas, 2017). From the extensive analysis of the three mines, namely Ok Teddy, McLaughlin
and Mount Polley 1 can figure out the issues associated with TSF. This analysis helps in
identifying the reason of success of McLaughlin as well as why the other two companies failed
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their limiting factors. In recent days, we observe that in large number of cases in the world the
crucial reason behind such type of disasters are political and not technical. Sometime theses type
of disaster route to social disaster whose impact are massive and cannot quantify in terms of
value. Apart from all this, there are some other factor that which are responsible for theses
disasters are poor analysis of geotechnical factors, below standard design model of tailings beach
and tailings dam, deviations from the design approved by the Ministry Of energy and Mines, and
negligent and inefficient supervision and regulatory monitor. The other main question that the
paper proposes to answer on the engineering aspects of the facilities projects. Like find out the
technique to reduce the social and environmental impacts of mining by scientific and innovative
engineering techniques (Werner, 2017).
So from the extensive study it is evaluated that the paper “the case of tailing storage facilities”
there are so many question on the environmental impact of operations like mining, and how to
minimise the impact of theses on environment. Here the author does the works like other
environmentalists, columnists and pseudo intellectuals who work on basic level instead of just
preaching and providing lip service. Apart from all sometimes the author followed aggressive
approach which adversely affecting the environment and the society as a whole. The point is
significant for not only the student of these fields, but also for the legislative and the regulatory
parties and the companies and individuals who are involved in the mining activity and connected
with mining industry (Trieu, 2017). The evidence supported to the above statement are also very
substantial, considerable and powerful. This evidence has been measured in terms of money,
which provides it even more persuasive and conclusive meaning. However, there are many
things, which is still left to analyse and too reached at meaningful conclusions.
Paper 2: Corporate Social Responsibilities: Alternative Perspectives about the
Need to Legislate
This paper on “Corporate Social Responsibilities: Alternative Perspectives About the Need to
Legislate” proposes to answer is whether corporate accountability or corporate social
responsibility shall be developed and determined by the dynamic and varied forces operating in
the market or shall there be a regulatory body to supervise the same (Deegan & Shelly, 2014). It
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is important to gain the opinion of different people, organizations and communities with respect
to the introduction of a new, separate and additional statute to reach at the conclusion of the
question regarding its positive and negative impact on society. It also provides a better
understanding by analysing the existing legislations and provisions (Arnott, Lizama, & Song,
2017).
As per the general interpretation, a wise person different communities or sectors of the society
respond things differently. It is suggested that the alternative that in their opinion would be the
most beneficial to them and protect the interest in general. However, the business fraternity was
in support of an approach, which does not involve any regulatory body or institution, the
individuals, and the social organizations were of the opinion that it should be highly regulated
(Das, 2017).
The significance of this topic can be evaluated from the huge number of replies that were
received by the Parliamentary Joint Committee on Corporations and Financial Services on the
Investigation. There are many group of people like business houses, associations, professional
bodies, accounting firms, non-government organizations (NGOs), consumer associations,
employee groups, government organizations and individuals gave their opinion on that. From the
number of responses received, the huge number of responses received from individual, which
generate the need of greater investor protection legislations. Out of the 130 submissions, 36
submissions received from social and environmental organizations, which made 30 submissions
(Erik & Jan, 2017).
From the technical aspect of the report is documented properly and includes all the
significant matter. The reported is prepared in manner that it is research based and each of the
submissions was read out properly. For the easy understanding and giving quick view to the
readers, the submissions have summarised in tabular form. Hence, the responses with respect to
submissions are very logical and scientific. Hence there are no area left for misinterpretation or
indulge in wrong opinion and unreliable conclusion. Here the submission is divided into different
aspect like research method, results, consistency and summary and each section have its own
interpretation (Grenier, 2017). The only limitation of this report is it is derived from conclusion.
Since the paper is based on alternative perspectives, it is very difficult to reach a conclusion.
However, in my opinion, the statement would be highly convenient to the student of the field and
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who are interested to learn the concept of corporate responsibility to the core. However, in case
of other people like experts, business corporations, and non-profit organizations would be very
limited.
Paper 3: A test Of Legitimacy Theory
Under this paper the thing highlighted that the use and execution of the legitimacy theory in
making annual disclosures in the financial statements. It elaborate the connection between the
event that poses environmental threat, decision of companies on crucial matters and method
adopted by the company to maintain, gain or repair the legitimacy (Deegan, Rankin, & Tobin,
2002). The paper also concluded that disclosure of method of monitoring and communicating the
strategic response with the stakeholders, especially the researchers is mandatory in annual report.
Hence for the better disclosure of all social and environmental information to stakeholder of the
organisation. The stakeholders become aware of all the financial decisions, the entity’s response
and the impact of that decision on the organisation (Goldmann, 2016). The significance for
environmental information is that many entities in the corporate world prepares standalone
report, focusing solely on the environmental disclosures. The disclosure requirement all depends
upon the financial impact of that information on financial user so it varies from person to person
and entity to entity. However the annual report is the best platform to disclose all the
environmental matter of the organisation that require immediate action widespread exposure.
However, there are many other ways to disclose information’s are media release and
advertisements.
Judging from the technical aspect, the pertinence of discussing legitimacy theory is increasing
now days, given the pace of economic development and industrialization. The connection of
legitimacy theory with other social theory like stakeholder theory, accountability theory and
political economic theory makes the discussion useful and helpful in explaining the interplay of
societal; expectations and the business entity’s actions in terms of value. It also provide answer
of real life anticipated events and incidents (Mun, 2018). However, the tactics adopted to gain
information is not as per the norms. Here the information is gathered by interviewing six senior
managers, belonging to three large Australian companies, deemed suitable for this purpose.
However this interview were in depth, which included lots of matter both open ended and close
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ended which may not be useful for analysis. The major area of focus of this paper is data
analysis. In the very first stage, we were focused on quantifiable analysis however in the second
stage the area of emphasis shifted on qualitative analysis. This approach of data analysis makes
the report more realistic and reliable. From the above discussion, it is concluded that still there
are so many area left for which extensive research is required (Raiborn, Butler, & Martin, 2016).
Paper 4: A study Of a Multinational Gas Company
The main objective of this paper is to throw light on the disclosure requirement of the company
or the entity in case if environmental disaster or similar incident. In this case in order to achieve
the stated goals, the author consider the two case studies from Bangladesh, a developing nation
(Islam & Islam, 2011). The case summarises here the two blowouts at a gas field owned by Niko
Resources Limited, a Canadian Multinational company operating in the Oil and Gas sector. Here
the author wishes to know that whether the companies disclosed information voluntarily or under
the public pressure. From the extensive study of paper, reader can conclude that the disclosure
made by Niko Resources Limited, in the form of standalone report, was clearly out of public
pressure and not as part of their accountability, both moral and corporate. The company analysed
that non-disclosure of those information in annual report have a direct bearing on their survival
(Kim, Schmidgall, & Damitio, 2017).
In Current scenario where a huge number of companies as a part of their expansion plan open
factories or places of business in third world countries, their accountability and responsibility for
all the incident occurring in those nations needs to be determined and analysed. The relevance of
the question can be ignored in terms of reliability. Paper is one of the first that focuses on the
behaviour activity of international entities towards such incidents in local communities and and
their relevance (Knechel & Salterio, 2016). The approach adopted by the author, which includes
reading, assessing and reviewing the articles in the news and other media releases. In addition, of
all these annual report and the standalone social responsibility report has also been considered.
Apart from disclosure of financial information, they also disclosed non-financial information,
which are significant in nature. The approach is crucial in terms of reviewing. The text are
formed in tabular manner and that tables of paper are self-explanatory. However, the text involve
many crucial questions but approach fail to reach a conclusion because here we studied the
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disclosure criteria of single multinational. However, there are many other organisation who made
similar or different disclosure and reason of doing that are not easy to conclude without any
extensive study (Heminway, 2017).
References
Alexander, F. (2016). The Changing Face of Accountability. The Journal of Higher Education, 71(4), 411-
431.
Arnott, D., Lizama, F., & Song, Y. (2017). Patterns of business intelligence systems use in organizations.
Decision Support Systems, 97, 58-68.
Belton, P. (2017). Competitive Strategy: Creating and Sustaining Superior Performance. London: Macat
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Choy, Y. K. (2018). Cost-benefit Analysis, Values, Wellbeing and Ethics: An Indigenous Worldview
Analysis. Ecological Economics, 145. Retrieved from
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Das, P. (2017). Financing Pattern and Utilization of Fixed Assets - A Study. Asian Journal of Social Science
Studies, 2(2), 10-17.
Deegan, C., & Shelly, M. (2014). Corporate Social Responsibilities: Alternative Perspectives About the
Need to Legislate. Springer, 121(1), 499-526. doi:DOI 10.1007/s10551-013-1730-2
Deegan, C., Rankin, M., & Tobin, J. (2002). An examination of the corporate social and environmental
disclosures of BHP from 1983-1997 : A test of legitimacy theory. Accounting, Auditing &
Accountability Journal, 15(3), 312-343.
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Grenier, J. (2017). Encouraging Professional Skepticism in the Industry Specialization Era. Journal of
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