ACC203: Financial Accounting Assignment on Sustainability Reporting

This financial accounting assignment explores sustainability reporting, focusing on Malaysian companies and their corporate social responsibility (CSR) reports. The assignment begins with an explanation of sustainability, sustainability reporting, and integrated reporting, emphasizing the Global Reporting Initiative (GRI) guidelines. It then discusses the purpose of sustainability reporting for Malaysian companies, highlighting the importance of disclosing corporate information. The core of the assignment analyzes the CSR reports of Coca-Cola, Pepsi, and F&N Beverages, examining their business nature and summarizing their environmental, social, and safety information. Finally, it assesses the advantages and disadvantages of disclosing corporate information, providing a comprehensive overview of the subject matter.

Running head: FINANCIAL ACCOUNTING ASSIGNMENT
Financial accounting assignment
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FINANCIAL ACCOUNTING ASSIGNMENT
Table of Contents
Answer to requirement a)................................................................................................................2
Explaining the concept of sustainability, sustainability reporting and integrated reporting:..........2
Explaining the sustainability reporting guidelines by emphasizing on GRI:..................................3
Discussing the purpose of sustainability reporting to the Malaysian companies:...........................4
Answer to requirement b)................................................................................................................6
Discussion of the corporate social information in the corporate social responsibility report of the
companies:.......................................................................................................................................6
Nature of business of Coca Cola:....................................................................................................6
Summary of corporate social information such as environment, society and safety:.....................6
Nature of business of Pepsi:............................................................................................................7
Summary of corporate social information such as environment, society and safety:.....................8
Nature of business of F and N beverages:.......................................................................................8
Summary of corporate social information such as environment, society and safety:.....................9
Answer to requirement c)................................................................................................................9
Advantages of disclosing the corporate information are as follows:...............................................9
Disadvantages of disclosing the corporate information are as follows:........................................13
References:....................................................................................................................................15

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Answer to requirement a)
Explaining the concept of sustainability, sustainability reporting and integrated reporting:
Sustainability is considered as the normative concept that embodies standard of behavior
and judgment so that the organization is respected as the human community that seeks to satisfy
the needs of wellbeing and survival. Sustainability is about the coordination and management of
social, environmental, and economic concerns to ensure that the organization is acting
responsibly in an ethical manner. In a broader contemporary sustainability treatise, an important
role is played by social sustainability. Moreover, the financial performance of the company is
significantly influenced by the sustainability performance that helps in supporting the decisions
of the company to improve the performance of sustainable managing. Improving the
sustainability reporting is as important as improving the financial performance and it is evident
from some findings that the sustainability performance has a contribution to the financial
performance of the company (Abernathy et al., 2017).
In recent years, sustainability reporting has becoming increasingly important concept for
the companies. The approach of sustainability reporting helps in integrating and creating balance
between the between the economic, social and environmental dimensions of performance of
business and these three dimensions forms the pillars of sustainability report. There are many
factors that contribute to this low percentage of sustainability reporting in countries like
Malaysia and these include difficulty in measuring performance, high cost of reporting, lack of
awareness, difficulty in making the company to become proactive in sustainability reporting and
assumptions of company regarding the cost of reporting, inconsistency and poor performance of
companies (De Villiers et al., 2018).

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Integrated reporting is the presentation and incorporation of the financial and non-
financial performance of the company in a single financial report. It is a concise communication
about the governance, strategy, prospects and performance of the company that helps in creation
of short and long-term value to the company (Ahmad et al., 2017). Such report intends to provide
greater context on the non-financial data such as the parameters of the social, economic and
governance performance and how the strategy of sustainability is embedded in the core strategy
of business. The concept of integrated report is challenging in light of the established fact that
the sustainability reporting has been adopted by very few countries across the world.
Explaining the sustainability reporting guidelines by emphasizing on GRI:
Sustainability report is a report prepared by organization disclosing their performance in
terms of social, environmental and economic dimensions and thereby providing precise and
balanced representation of sustainability performance that incorporates both negative and
positive contributions. The branding of sustainability report is done by the companies for
reflecting the attributes of company for the development of business strategies and success and
helps in creating the opportunities. Such report outlines the activities pertaining to the corporate
social responsibility of the companies and is regarded as the dynamic component for
communicating sustainability performance to the stakeholders. Sustainability reporting is the
extension of the corporate social responsibility according to the Global reporting initiatives that
reflects the economic and environmental dimensions, rather than disclosing only social
responsibilities. Such initiatives offers the company with competitive guidelines on sustainability

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reporting and disclosing the profile of the company regarding environmental, economic, social
and governance efforts.
Discussing the purpose of sustainability reporting to the Malaysian companies:
Organizations in Malaysia is not convinced on the sustainability reporting due to the
factors such as difficulty in measurement of the parameters and high cost of reporting and
consequently, there is negligence and ignorance of the unsystematic nature of the social,
economic and environmental patronage on sustainability matters. The competitive advantage of
developing countries like Malaysia is being enhanced because of increase in the awareness of the
sustainability issues worldwide along with an increase in the demand of stakeholders regarding
the disclosures of sustainability in the sustainability report. Compared to other countries of the
world, the percentage of companies that report or discloses their sustainability issues is low. The
importance of economic protection is the fact, which the Malaysians are well acquainted with,
and this is subsequent from the high profile case such as collapse of Haze and Highland towers.
The guide provided by the sustainability reporting suggest the companies to adopt a
reporting approach in accordance with the guidelines of the framework of international
sustainability reporting. One of the commitments, which the government of Malaysia poses
towards the sustainability engagement, is required to disclose the engagement in the annual
report of the Malaysian companies. The objective of sustainability reporting is intended to
improve the corporate image and the reporting is concentrated on four local areas such as
workplace, marketplace, environment and community. The challenges to establish an ethical and
moral community by ensuring that the organization operates as an economically unjust society
and thereby helps in promoting the economic awareness. Malaysian companies should engage in

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the sustainability reporting for creating a medium to communicate the sustainability performance
between the company and its respective stakeholders. It acts an evidence of disclosing the
sustainable information in the report demonstrating that the organization would operate in a
sustainable manner whilst balancing the various stakeholders’ interest. The company practicing
sustainability reporting helps in enhancing the loyalty of the customers, setting corporate
strategy, improving relationship with the stakeholders and increasing the reputation and brand
image of company. Furthermore, the companies implementing corporate sustainability promote
the long-term success of business and the transparency as well as contribute in improving the
standards of living of community.
Disclosure of information regarding sustainability performance using sustainability
reports helps in enhancing the transparency by disclosing all the opportunities and risk faced by
the company along with increased accountability. The objective of sustainability reporting of the
companies in Malaysia is also intended to facilitate the implementation of environmental
strategy, tracking the sustainability performance of the company against the specific targets and
clearly conveying the environmental reporting standards and communication efforts to the
shareholders of companies. With the help of sustainability reporting, companies are guided about
the measurement and disclosure of the sustainable information by developing sufficient
indicators. Since the main concern of the society is the impact created by the activities of
organization on environment, disclosing the environmental performance information forms the
basic objective of sustainability reporting (Schreck & Raithel, 2018). Therefore, companies
should make disclosure about their sustainability performance in sustainability reports.

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Answer to requirement b)
Discussion of the corporate social information in the corporate social responsibility report
of the companies:
Nature of business of Coca Cola:
Coca Cola is a multinational company of America that is engaged in the manufacture,
marketing and retailing of nonalcoholic beverages. The nature of business of Coca Cola requires
the organization to have highest processes and standard to ensure consistent quality across the
entire value chain ranging from concentrate production to the bottling and delivery of products.
Coca Cola being a leading nonalcoholic beverage of the world having the valuable brand of
portfolio. Organization is engaged in bringing joy, value, fun and refreshment to the stakeholders
by successfully. The top five drinks of the world is manufactured by Coca Cola and has the most
pervasive system of distribution and produces variety of carbonated drinks, juice drinks, sports
drink, bottled water, tea and coffee (coca-colacompany.com 2019). They are regarded as the
most aspired organization when it comes to crediting the proficiency in terms of infrastructure,
consumer marketing, customer marketing and product packaging.
Summary of corporate social information such as environment, society and safety:
The company has a clear focus on the highest priority of social, environmental and
governance issues for the stakeholders and business as a whole and incorporate the sustainability

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issues in the development of the corporate strategy. With the evolvement of business and in an
attempt to meet the wider expectation of the stakeholders, Coca Cola takes into consideration the
changing environmental, social and the economic contexts. The risk and opportunities are
considered with the operation of company with growth mindset and addressing the relevant
issues such as plastic waste. The concern about the plastic waste have risen because of the
recycling infrastructure, waste collection have not kept pace with the manufacturing of plastic,
and this resulted an increasing waste of the plastic in environment (Kristofik et al., 2016).
Organization has adopted the improved model of plastic production that have a reduced impact
on the ecosystem and reduction in the footprints of carbon. In addition to this, implementation of
pilot program seeks to enable and support the community to minimize the amount of waste by
reusing and recycling the waste generated and it helps in ensuring greater sensitivity and
transparency that helps in addressing the needs of community. One of the priorities of the
community investment is empowerment of community. Safety and health of employees is
another sustainability issue that the company intends to address by implementing the quality,
safety and environmental capability program (coca-colacompany.com 2019).
Nature of business of Pepsi:
Pepsi Company, Malaysia was founded in year 1972 and is engaged in the specialization
of production and distribution of soft drinks. The basic interest of company lies in marketing,
manufacturing and distribution of the grain based snacks, beverages, food and other products.
Pepsi Company is one of the most respected companies selling products in more than 200
countries and generating annual retail sales of $ 1 billion in each territories (pepsico.com 2019).

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Summary of corporate social information such as environment, society and safety:
The strategy of Pepsi rest on creating a positive relationship between food and people that
is integral to their business. The creation of product is done by supporting the wellness goals and
specific health by applying the product development and nutritional science. Sustainable farming
initiative launched by Pepsi is intended to improve the livelihood of growers and crop yields,
advancing respect for the human rights of workers and increasing the environmentally
responsible practices. The innovation in packaging such as bio plastic bags is assisting the
consumers in reducing the environmental impact. The program of sustainable farming has the
objective of optimizing social, economic and environment on farm practices and reducing the
scope of emission of GHG. In addition to this, the expansion of positive water impact can help in
supporting long-term water security by replenishing and reusing the water. The business is
conducted in a positive manner that helps in creating a positive impact on the community.
Implementation of safety technology, efficiently routing and driver training is making
improvement in fleets and increasing its efficiency. One of the important factors contributing to
the success of company is supporting and protecting the wellness, safety and professional
development of the global workforce across the value chain of organization (pepsico.com 2019).
Nature of business of F and N beverages:
Fraser and Neave holding company is the most established and the oldest food and
beverages company of Malaysia with its brand enjoying the distinction of being a household
name and market leader in several categories. The operations of business is organized according
to the services and products that encompasses both dairies and soft drinks and has a diversified
geographical operations and ranges of products (Fraserandneave.com. 2019).

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Summary of corporate social information such as environment, society and safety:
The responsibility of protecting the interest of future generation is greatly recognized by
the company that contributes to achieving balance between protecting the planet and people and
profitable long-term growth. The business is conducted in accordance with the sustainable
business practices that intends to minimize the risk for environment and society, which helps in
ensuring the longevity of the company. Organization is always in the constant attempt to find
innovative way to deal with the environmental issues such as reduction of waste and water reuse.
The green carnival and waste to wealth campaign helps in improving the performance by raising
the awareness of the environmental stewardship. There is responsible and sustainable
procurement of suppliers that incorporate environmental, social and governance factors.
Moreover, the needs of community is addressed by implementing and exploring the engagement
and outreach program across Malaysia, Thailand and Singapore (Mamun et al., 2017). The
hiring practices take into account the interest of community and there is a significant percentage
of local communities in the senior management. Furthermore, the health and safety of people at
all times is safeguarded by the development of appropriate health and occupational program and
policies (Fraserandneave.com. 2019).
Answer to requirement c)
Advantages of disclosing the corporate information are as follows:
Advantage 1:
Helps in addressing several sustainability issues and reducing the impact of operations on
the environment.

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The sustainability reporting is considered critical to the fulfilment of the responsibility of
the company that helps in providing insight into the actions, results and sustainable
commitments. Food and beverage organization faces various sustainability issues in terms of the
manufacturing of the products such as wastage of plastic and water. In addition to this, there is
also a growing concern amongst consumers about the increased prevalence of obesity that is
correlated to non-communicable diseases. Furthermore, availability and the quality of water is
also threatened by the poor sanitation infrastructure and water overuse. Addressing all such
concerns is regarded as the key sustainability topic for any organization engaged in
manufacturing of beverages.
The approach of sustainable development emphasizes on the fact that economic activity
carried out by business must not irreparably destroy or degrade the human or natural resources.
Sustainable manufacturing is essential for the organizations to grow and thrive in the long term
and for this purpose adopting the sustainability approach to address the challenges they faced in
terms of sustainability issues is critical. Greater emphasis is placed on the sustainability that
helps in managing the environmental damage created by operations by reducing the risks and
negative impacts created on the environment. The stakeholders are provided transparent
information about the sustainable performance of company by addressing the environment issues
such as carbon emission, wastage of water and plastic.
Coca Cola address their sustainability issues with the help of development of effective
indicators helps in measuring the impact that is created by the operational activities of the
business. Sustainable development programs for addressing issues such as water replenishment
program, innovation in packaging materials and supporting the recommendations given by health

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communities. Reduction in plastic waste is done creating an innovation in packaging materials,
single use of plastic and carbon footprint reduction.
Advantage 2:
Sustainable and responsible procurement of suppliers and raw materials
This is related with addressing issues and mitigating risks in the supply chain using
sustainable procurement which is done to view the maximizing net benefits in terms of utilities,
services and goods. Procuring the raw materials in a sustainable manner would help in
shortening the timescales, cutting the cost, increasing sales, reducing risks, improving margins
and enhancing the relationships of stakeholder (Cavaleri & Shabana, 2018).
Risks associated with the supply chain can be mitigated by the responsible procurement
that involves purchasing the raw material from suppliers so that there is a reduced impact on the
environment, human health and society. Suppliers are encouraged to manufacture and produce
the products in an environmental friendly manner by sourcing green raw materials and designing
the products that consumes less water and is energy efficient. Incorporation of appropriate
safeguards helps in avoiding inadvertent infringement and avoiding abuses by addressing key
social issues such as human rights, safety and health and labour rights. Adopting the approach of
sustainability in the supply chain by companies helps in strengthening the relationship of
suppliers and buyers and engaging with the suppliers for creating mutual benefits. Continuous
improvement in the sustainability performance of the companies help in creating and identifying
inefficiencies. This coms with the construction of some support programs intended to reduce the