Financial Accounting Theory (BBAC502): NAB CSR Reporting Analysis

This report provides an in-depth analysis of the Corporate Social Responsibility (CSR) reporting practices of the National Australian Bank (NAB). It begins by outlining the key components of NAB's CSR reporting, encompassing areas such as people, community, environment, and governance. The report then explores the theoretical underpinnings of CSR, examining how Legitimacy Theory, Stakeholder Theory, and Institutional Theory can be applied to understand NAB's motivations for CSR reporting. Furthermore, it evaluates the positive impacts of NAB's CSR initiatives on the local Australian community, including community investment, volunteer programs, and support for various social and environmental causes. The report concludes by summarizing NAB's commitment to sustainability and its role in addressing critical issues related to its business operations.

Running head: FINANCIAL ACCOUNTING THEORY
Financial Accounting Theory
Name of the Student
Name of the University
Author’s Note

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Executive Summary
The objective of this report is the analysis of the various sides of Corporate Social Reasonability
(CSR) Reporting for National Australian Bank (NAB). The first part of the report shows the
processes to correctly handling of the CSR reporting components of NAB. The second part of the
reports shows that the use of specific CSR theories to find the CSR reporting motivation for
NAB. The last part of the report shows the impact of these CSR reporting components of NAB
on the Australian communities.

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Table of Contents
Introduction......................................................................................................................................3
Handling of CSR Reporting Components in NAB..........................................................................3
CSR Theories...................................................................................................................................5
Evaluation of the Impacts of CSR Reporting of NAB on Local Community.................................6
Conclusion.......................................................................................................................................8
References........................................................................................................................................9

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Introduction
The objective of Corporate Social Responsibility (CSR) is to put obligation on the firms
to conduct their business operations as per the ethical ways. Under the process of CSR, firms
must take into account the impact of their businesses on social, economic, environmental and
human rights factors (Schwartz 2017). Under the process of CSR Reporting, firms are required to
disclose the necessary information to the target groups regarding their performance in the
sustainability areas (Frederick 2016). This report aims in the analysis and evaluation of the
crucial dimensions of CSR reporting of National Australian Bank (NAB). The report also
analyzes three CSR related theories as the motivation of CSR reporting.
Handling of CSR Reporting Components in NAB
As per the above discussion, it is needed for the companies to provide all the required
information to the shareholders about their sustainability performance. In the general aspect,
companies are needed to disclose information about certain sustainability aspects in CSR reports;
they are People, Community, Environment and Governance (Asif et al. 2013). It is also needed
for NAB to take into consideration all these aspects in the process of CSR reporting.
Under the aspect of people factor in CSR reporting, NAB has considered their
employees, customers and community people. NAB has handled this aspect by taking into
consideration the feedback of the customers with the aim to cater to the banking needs of their
customers; such as hardship assistance, speedy resolution of the customer complaints,
independent customer complaints, hardship support through the branch network and others
(nab.com.au 2018). In case of the employees and other organizational staffs, NAB has ensured

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the health, safety and wellbeing of them by taking various health and safety initiatives. After
that, NAB has shows their commitment towards gender equality at workplace in all aspect of
business by the year 2020. Moreover, NAB has handed this aspect of CSR reporting by taking
various other initiatives like effective training for their career development, pat equality,
LGBTI+ and others (Tai and Chuang 2014).
In case of the community aspect in CSR reporting, NAB has handled this aspect by
taking into account certain community related issues such as financial inclusion and resilience,
social coherence, environmental wellbeing and others. At the same time, NAB has shown their
commitment towards the aspect of community development by setting Sustainability
Development Goals (SDGs) set out by the United Nations General Assembly as a part of their
2030 Agenda. Some crucial factors that NAB has considered for handling community
development are no property, zero hunger, good health and well-being, quality education, gender
equality, affordable energy and many others (nab.com.au 2018).
With the aim to handle the sustainability aspect of good governance in CSR reporting,
NAB has implemented effective governance systems as it plays a critical role for the
management of business risks and for providing finance to the customers in responsible basis.
The governance mechanism of NAB includes the management of climate change, issues in
human rights and other risks in the areas of loan books (Deng, Kang and Low 2013). Lastly,
under the environmental aspect of CSR reporting, NAB has handled this by taking an initiative
of environment financing that includes the pledge of the bank for delivering $55 billion by the
year 2025. In addition, since the October 2015, NAB has provided $23 billion in the process of
environmental financing (nab.com.au 2018).

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CSR Theories
The investors can apply certain CSR relate theories in order to find the motivation of the
firms for preparing and presenting the CSR reports. In this context, three specific theories are
Legitimacy Theory, Stakeholder Theory and Institutional Theory. The following discussion
shows the application of these theories for finding the motivation of NAB for CSR reporting.
Legitimacy Theory: Wide use of this legitimacy theory can be seen all over the world in order
to explain the disclosure of social and environmental performance information of the firms.
According to the principles of this particular theory, the aim of the business organizations is to
continue their operations within the norms and bonds of their respective societies (Fernando and
Lawrence 2014). This perspective indicates towards the voluntary requirement of the firms to
disclose their business operations having impact on the societies. Hence, according to the
legitimacy theory, the effort to operate under the social bond and norm puts the obligation on
NAB to disclose the information of their business activities having effects on societies,
environments and communities. For this reason, it can be considered as a major motivation for
NAB for CSR reporting (Chan, Watson and Woodliff 2014).
Stakeholder Theory: The connection of this stakeholder theory can be seen with the
organizational management and business ethics. According to the principles of stakeholder
theory, it is the obligation on the firms for the protection of the stakeholders’ interests in the
companies (Brown and Forster 2013). Positive relation between this stakeholder theory and CSR
reporting can be seen due to the presence of the belief that the presence of business ethics works
as a major part to motivate the firms in the process of various sustainability activities. For this
reason, it is needed for the business organizations to continue their business operation ethically
for providing satisfaction to the key stakeholders of business like shareholders, customers,

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community and others (Cordeiro and Tewari 2015). In the presence of all these reason, it is also
needed for NAB to ensure the disclosure of the information of this sustainability performance
through CSR reporting. Hence, it can be considered as a major motivation for NAB for CSR
reporting.
Institutional Theory: According to the concept of institutional theory, the institutional
environment or filed governs the behavior of the business organizations. There are three major
components of the above-mentioned institutional environment; they are organizations’ social
context, business activities of the organizations and organizations’ social relationship (Marano
and Kostova 2016). In the recent years, the concept of this theory indicates towards a crucial
aspect that there has been a growing tendency for the companies to match the tendency of CSR
reporting; and the matching of this aspect can be seen in NAB. In this context, it requires to
mention the fact that NAB has prepared and presented their sustainability report as per the
principles of Global Reporting Initiatives (GRI) and one major aim of this is to stay operating in
the business environment of Australia (Meyerand Höllerer 2014). For this reason, it has become
a major necessity for NAB to disclose the information about their performance in different
sustainability aspects.
Evaluation of the Impacts of CSR Reporting of NAB on Local Community
As per the above discussion, NAB has certain components in the process of CSR
reporting and all these aspects have major positive impact on the communities of the country.
The aim of NAB is to become a trusted member of the community by taking into consideration
the major community issues (nab.com.au 2018). In the recent years, NAB has taken their
community investment initiative in the forms of community partnership, volunteering program,

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grand, donations and local sponsorship. In the year 2018, NAB has made an investment of $54.4
million in various community activities and it is more than $10 million from the last year.
Increase in this investment came from the increased investments in NAB’s microfinance
programs with partnership with Good Shepherd Microfinance. In the current situation, NAB has
a workplace of 33,000 people. The employment of NAB includes two days of volunteer days in a
year with a non-profit organization; and NAB contributed 15397 volunteer days in the year 2018
(nab.com.au 2018).
In addition, NAB has contributed donation up to $1200 per employee and more than 550
no-profit organizations have received this donation in the year 2018. NAB has been majorly
contributing towards the community development with the help of NAB Foundations that is a
philanthropic arm of the bank supporting the new and innovative ways for addressing the social
issues. On every year, this foundation is committed to provide six grants worth $1.6 million with
the aim to address the issues in regional communities, environmental problems like water access,
water quality, climate change and others (nab.com.au 2018). NAB considers domestic and family
violence as silent issues and they address this issue by raising awareness and critical support to
help their customers, employees and communities. In 2018, NAB progressed towards their 2025
science-based GHG emission target by delivering 12 percent reductions from 2015. NAB has
also extended their support towards the progress of the indigenous community, development of
rural communities by employing more than 2000 people from rural communities, helping the
drought affected people and others (nab.com.au 2018).

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Conclusion
It can be seen from the above discussion that NAB has handled the required aspects of
CSR reporting by addressing the sustainability issues in the areas of community engagement,
people development, environmental issues and government issues. The above discussion also
shows that the application of the CSR related theories can identify the motivations behind CSR
reporting. It can also be observed from the above discussion that NAB has made major
contribution towards the development of their communities with the help of various
sustainability initiatives. These aspects show the responsibility of the bank towards their
suatinabiity issues related to their business operations.

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References
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approach to corporate social responsibility. Journal of cleaner production, 56, pp.7-17.
Brown, J.A. and Forster, W.R., 2013. CSR and stakeholder theory: A tale of Adam
Smith. Journal of business ethics, 112(2), pp.301-312.
Chan, M.C., Watson, J. and Woodliff, D., 2014. Corporate governance quality and CSR
disclosures. Journal of Business Ethics, 125(1), pp.59-73.
Cordeiro, J.J. and Tewari, M., 2015. Firm characteristics, industry context, and investor reactions
to environmental CSR: A stakeholder theory approach. Journal of Business Ethics, 130(4),
pp.833-849.
Deng, X., Kang, J.K. and Low, B.S., 2013. Corporate social responsibility and stakeholder value
maximization: Evidence from mergers. Journal of financial Economics, 110(1), pp.87-109.
Fernando, S. and Lawrence, S., 2014. A theoretical framework for CSR practices: integrating
legitimacy theory, stakeholder theory and institutional theory. Journal of Theoretical Accounting
Research, 10(1), pp.149-178.
Frederick, W.C., 2016. Commentary: corporate social responsibility: deep roots, flourishing
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Marano, V. and Kostova, T., 2016. Unpacking the institutional complexity in adoption of CSR
practices in multinational enterprises. Journal of Management Studies, 53(1), pp.28-54.

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Meyer, R.E. and Höllerer, M.A., 2014. Does institutional theory need redirecting?. Journal of
Management Studies, 51(7), pp.1221-1233.
Nab.com.au., 2018. Sustainability Report 2018. [online] Available at:
https://www.nab.com.au/content/dam/nabrwd/documents/reports/corporate/2018-sustainability-
report.pdf [Accessed 25 Nov. 2018].
Schwartz, M.S., 2017. Corporate social responsibility. Routledge.
Tai, F.M. and Chuang, S.H., 2014. Corporate social responsibility. Ibusiness, 6(03), p.117.