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Since its inception in 2011, Treasury Wine Estates (TWE) has become one of the world’s largest wine companies. Originally the business was a division of the Foster’s Group, but was demerged from the rest of the Group in 2011. TWE operates in four global regions: Australia and New Zealand; The Americas; Asia; and Europe. TWE focuses on grape growing and sourcing; winemaking and marketing, and employs over 3,400 people. TWE is one of Australia’s largest wine companies, accessing over 13,000 hectares of vineyards.
You have been employed by the company as an accountant aftergraduatingfrom RMIT University two months ago. After reviewing your CV andnoticingthat you have successfully completed several sustainability relatedcoursesduring your study, the Chief Executive Officer (CEO) of TWEassignedthree independent but related tasks to you. The three tasks are asfollows.
(Note: TWE is a real-life entity. All of your
research,analysis,discussions and recommendations relating to this case study
shouldbebased on real world information andconditions.)
AssumetheCEOissatisfiedwithyourreport(AssignmentOne)andwithinAssignment One you have recommended TWE to producesustainabilityreportstoexternalstakeholders.Tofollowup,theCEOasksyouand your colleagues to completeasecond business report to address his followingrequirements:
- Why should TWE provide a sustainability report?
- To whom should these reports beaddressed?
- What information should bereported?
- How should the information bereported?
Withinthereport,theCEOalsoasksyour grouptoapplyonetheoryintoyourdiscussiontoexplainandjustifyyourrecommendationsastowhy,towhom, what and how information should bereported.
- A group of three or four students (this is a group assignment). Individual assignments will not be accepted.
- As this is a group assignment submitted by one student representative of a team, an Assignment Coversheet completed and signed by all members of that team is required.
- · WordLimit:
Maximum 2,500 words (
Below is a Sample Paper. You Can Order a Custom Essay Written From Scratch From Our Website. Click Here to Order.
reporting (SR) is an essential aspect of the business. The strategy brings
about numerous benefits to an organization’s operations. Some of which include cost-efficiency
and creating competitive advantage in the market. Following the legitimacy theory, a business practices should observe
both social and environmental factors. Due to the ‘social constructs’ of the
model, the intended audience should thereby be the stakeholders. TWE should
implement annual SR through the company’s website.
A sustainability report is a corporate social responsibility disclosure that presents a reasonable performance over a specified period (Global Reporting Initiative, n.d., 40). According to Global Reporting Initiative (2013, p.3), 95% of the globe’s 250 most significant firms are already generating sustainability reports. Corporations seem to be considerably embracing sustainability reporting (SR). Treasury Wine Estates (TWE) should implement SR addressing it to the company’s stakeholders.
This report aims to examine the role SR plays in a company as well as to determine the type of audience and information suitable for SR. The assignment also purposes on identifying an appropriate manner in which reporting could be done.
The task covers some of the reasons to why sustainability reporting would be of significance to TWE. The assignment also identifies the appropriate audience for TWE’s SR. Another thing that report assesses is the kind of information that TWE should report. Finally, the assessment provides ways in which knowledge should be communicated at TWE.
The main obstacle was lack of sufficient evidence. There is little research done concerning sustainability reporting. Time was also challenging since there was minimal information available.
- Just like corporate social responsibility, sustainability reporting results in continuous positive business performance.
Worldwide, there is an increasing focus for corporations to embrace SR over the last ten years (Global Reporting Initiative, 2013, p.3). The massive embracement of producing formal statements could probably be due to the broad nature of the sustainability concept. The aspect of sustainability is entirely broad as it entails three building blocks namely economic, social and environmental concerns (Petrini & Pozzebon, 2010, p.363). For the social aspect, a company should much value people who include its employees and the neighboring society. Employees should be prioritized, and a firm should even consider strategies related to giving back to the community (Mujtaba, & Cavico, 2013, p.59). In regards to the environmental concept, it is the role of the company to ensure prevention of damage to nature as a result of its business practices such as manufacturing and consumption of the firm’s products (Sutton, 2004, p.18). Under the economic dimension, the business is expected to meet its profitability margin legally and morally (Fontaine, 2013, p.111). The concept of sustainability is diverse, and any diversion would bring about adverse impacts to the company.
Sustainability reporting would be of significance to TWE in numerous areas. Global Reporting Initiative (2013, p.2) asserts that SR creates a culture of transparency which would bring about a highly accountable and responsible corporate surrounding. Trust would be established at TWE, and this would elevate the value of the brand as well as boost the company’s performance. Information in regards to the non-financial elements of the business is also critical for the market’s sufficient functioning. Besides, SR would create the competitive advantage to TWE. Enterprises perceived as innovators and leaders can be in a more powerful bargaining stand when it comes to things like alluring investment and entering new markets (Global Reporting Initiative, 2013, p.7). In fact, due to the decreased prices of products as a result of minimal production expenditure increases customer loyalty especially when there is zero switching costs in the market.
SR is also a cost-efficient strategy for the business. First, it helps in minimizing expenditures related to compliance (Global Reporting Initiative, 2013, p.3). Analyzing sustainability performance can help TWE meet its regulatory requirements appropriately, and thus this would help the company prevent costly breaches. Secondly, SR increases innovation. Enhancement of processes and systems brings about continuous positive performance and raises accountability (Global Reporting Initiative, 2013, p.3). Costs associated with overall production would consequently decline at TWE. According to the legitimacy theory, a company should continuously seek to make sure that their operations are within the bounds of their respective areas (Cuganesan, Ward & Guthrie 2016. p.4). TWE should embrace SR since the legitimacy model is based on the ‘social contract’ concept between an organization and the community in which it operates. The survival of an organization is threatened if the society’s views are that the enterprise has breached its commitment (Cuganesan et al., 2016. p.4). TWE should, therefore, provide reports since its transparency would offer proof to the society of its positive contributions to the environment and the aspect of people. Through submissions of SR, TWE would substantially boost its reputation in the global community.
Sustainability reports should be addressed to TWE’s stakeholders. Lee (2007, p.5) assert that stakeholders are individuals interested in the occurrences of the business and they include the community, shareholders, government, consumers, employees and the management. Besides, the concept of sustainability involves several entities in regards to its social, economic and environmental issues.
According to Mohamed, Olfa, Faouzi (2014, p.215) the legitimacy theory is grounded upon two notions. The initial concept is that enterprises should legalize their operations. In this case, TWE should address its reports to the government to show their compliance to the expected standards. TWE may include things like some of its policies it has incorporated in its organization. Failure to adhere to the anticipations may result in sanctions (Mohamed et al., 2014, p.216). TWE needs to acknowledge the government to avoid unnecessary penalties. The second idea is that companies can gain through a legalized action founded on social responsibility practices. The legitimacy theory shows that an organization should address the rights of the public on the whole and not just those of its shareholders and investors (Faisal, Tower, & Rusmin, 2012, p.21; Mohamed et al., 2014, p.215). Thereby, TWE should significantly consider the society as one of its audience as this would substantially meet the expectations of the community. Showing its compliance towards the rights of the public such as proper disposal of wastes would increase TWE’s chances of operating in it various regions and perhaps venture into new markets due to its global reputation.
In regards to the legitimacy theory, one of the social roles a company has is looking after its workforce (Mohamed et al., 2014, p.209). Employees are of utmost importance to a company (Hanson, Hitt, Ireland, & Hoskisson (2017, p.110). Without the workforce, the primary purpose of a company which is attaining sustainability through making adequate profits would not be met. Profitability is reached through customer satisfaction and retention. Only staffs can bring about consumer loyalty since most workers tend to have direct contact with clients on a daily basis. Addressing the reports to the employees would not only inform them of TWE’s present position but would also be motivating enough as they would feel significantly involved and part of the business. Employee engagement considerably results in high numbers of satisfied consumers and increased profit levels (Hanson et al., 2017, p. 110).
Over the years, the expectations of consumers to the role of enterprises have risen. Thus, businesses should be accountable enough to all of its entities. The legitimacy theory, in fact, shows that companies have the responsibility of social accounting for its stakeholders such as its customers. The social pressure filters out irresponsible firms which could pose a danger to the users. A shareholder is an individual who owns at least a share of an enterprise’s stock (Office of the Director of Corporate Enforcement, n.d., p.1). As owners of the company, shareholders at TWE deserve to be notified of the financial and non-financial status as the organization continues to transform into a brand-led, high-performing company. A report is more of feedback concerning previously planned actions which have been implemented. Based on the formal statement provided, appropriate approaches are formulated for implementation towards a better future than the present. Highlighting the current position of the firm offers the direction towards which the organization needs to head. Hence, shareholders can provide clear insights based on the information provided.
Sustainability reporting involves the creation of formal statements about corporate social responsibility (CSR). According to Ismail (2009, p.199), the concept of CSR entails taking responsibility of the effect of a business’ practices on not just the shareholders but also other entities such as the community, employees, suppliers and the environment. CSR include approaches in which organizations conduct their operations in a manner that is ethical and legal. Uddin, Hassan & Tarique (2008, p.199) depicts the economic, social and environmental as the main components that make-up CSR. SR should thereby use knowledge regarding the aspect of people, economic dimensions, and the business surrounding. Besides, the legitimacy theory asserts that corporations tend to have a responsibility to the community and the environment as well.
Ecological dimensions are a key pillar in CSR (Uddin et al., 2008, p.207). Gathering information regarding the environment it would help identify TWE’s business practices which can have a detrimental impact on the environment. TWE would be in a position to determine some of its unfavorable activities to the surrounding such as pollution, loss of biodiversity, deforestation, overuse of natural resources and climate change. TWE should include in its report some of the measures it has taken to analyze its environmental impact. Depending on where TWE stands based on it ecological information, the company can be able to depict some of the suitable counter-measures which can be implemented efficiently such as thorough ecological footprint. The company, TWE, can also highlight some of its transitions over the years in regards to its commitment to nature. For instance, it could be that presently TWE has relatively cleaner production than in the past. Outlining information that depicts TWE an organization responsible for the environment, it would increase its chances of survival in the market.
The economic element of CSR is another type of information that TWE should incorporate in its SR. The financial dimension would ensure that several factors such as the company’s economic impacts are captured. In regards to the economic effect, TWE should determine the expected profit levels and revenue to be generated for the company and the government respectively.
TWE’s report should also include information about the social dimensions of CSR. The social element of sustainability involves the individuals within the enterprise, society, customers and the firm’s supply chain (Uddin et al., 2008, p.205). TWE should include information which reflects the company’s obligation to make decisions and execute actions that will participate towards the welfare and interests of the community and those of the business. As the legitimacy theory asserts, companies have a social responsibility for its consumers and employees. TWE should project its level of adherence to the expectations of its workforce and the clients. These obligations may include after-sales services, product safety and fair advertising for consumers. As for staffs, some of the social roles that TWE would do would include the provision of job security, personnel’s well-being, and motivation strategies. Further, TWE can encompass content revolving around its responsibility towards the society. According to (Uddin et al., 2008, p.206), an organization’s prosperity is dependent on the stability, success, and health of the community in which it operates. TWE should indicate some of the activities it intends to do for the company. Some of which would include vocational training, cultural events, and charity activities. TWE should consider integrating social, economic and environmental elements of CSR in its sustainability reporting.
The report for TWE should be prepared according to the standards Global Reporting Initiative (GRI).The reporting guidelines comprise of principles which define diverse content for reports and ensures the quality of the information that is to be reported (Global Reporting Initiative, 2015, p.24). The framework also entails Standard Disclosures which consist of performance indicators (Global Reporting Initiative, n.d., 3). Besides, the guideline explores the central issues depicted by the legitimacy theory which include both the social and the environmental contexts as described by Tilling (2004, p.2). TWE will consistently report on its sustainability operations on an annual cycle.
The TWE sustainability report will be done electronically on the company’s website in the form of portable document format (PDF) annually. According to Haasbroek & Toit (2003, p.2), a PDF is a file format created by Adobe Corporation for generating documents similar to the original printed one. Using PDFs will help retain the original color, images, fonts and formatting on different computer platforms. Annual reports will be of great help to the stakeholders. The main benefit of digital interaction is instant accessibility to current information (Mousa & Hassan, 2015, p.43). Changes will be readily available, and there will be no need of holding numerous conferences for updates. The cost associated with accessing annual digital reports is relative low. Shareholders will be able to obtain information and save on things such as traveling expenditures. The web users will be in a position to retrieve information once it is published. In this case, electronic communication tends to increase the timeliness of the provided knowledge.
With PDF, large volumes of free information will be available. There has been massive growth in the percentage of 3rd party sites (Haasbroek & Toit (2003, p.3) who assemble and analyze business information. Uploading PDFs on the company’s web page will facilitate investors save on not only their time but also effort. Third parties tend to add value to the information and provide a variety of sources of data. Relevant information will be available to potential investors to make informed decisions based on their risk assessment. Furthermore, PDF allows hyperlinks to other data, and this enhances the readability of annual formal statements and client access to knowledge.
Annual electronic reports will also be of significant benefit for TWE. Haasbroek & Toit (2003, p.5) depicts the Web as a convenient manner to converse with stakeholders and potential shareholders. It is a platform designed to encourage various entities to access information and offer feedback to an enterprise. Moreover, the regular maintenance of online pages brings forth constant updating of information. The material which is out of date can either be eliminated promptly or archived on the website. More so, digital platforms have unlimited space as suggested by Walia (2016, p.181). Numerous data can be uploaded to a site unlike in the case with paper versions. Using the internet as a platform for reporting sustainability practices for TWE will bring about substantial benefits to the company and its stakeholders.
Sustainability reporting plays a considerable part of the company as it covers the economic, environmental and social aspects. It is even of much importance when formal statements are delivered electronically. The strategy is cost-efficient and dramatically increases transparency. SR embraces innovations, and thus expenditures are significantly cut down within the company’s operations. Provision of genuine information builds trusts even with the society, and this is regarded as of paramount importance by the legitimacy theory since it is based upon ‘social constructs.’ Stakeholders are therefore the suitable audience for SR since the term revolves around the aspect of people with great interest in the company’s transactions. TWE should incorporate SR in its operations to boost its business performance.
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