Accounting Reporting

The authors begin the article by recognising that despite the immediate threat of global warming, climate change has taken a backseat amid other political and economic failures. The main obstacle to addressing climate change is the conflicting ‘regulatory, scientific and emotive’ views and theories pertaining its existence. (Milne & Grubnic, 2011) However, businesses have taken the initiative, with the introduction of carbon accounting, carbon foot-printing, greenhouse gas protocols and carbon offsetting to the address the issue of climate change. Further action needs to be taken to ensure businesses are accountable for their practices with a need for more stringent ‘scrutinising’ mechanisms over reporting to dispel ‘unethical motives’ related to sustainability reporting. (Milne & Grubnic, 2011)

The major complication with regards to climate change is the rate at which population, financial, technological growth is perpetuating, at such a rate, the consequential emissions are unmanageable which is supported by that fact that ‘in 1908 less than one fifth of 1% of people in the US owned a vehicle, now recently in 2010 over 81% own a vehicle’. (Milne & Grubnic, 2011) In the next section, the authors discuss New Zealand’s tourism industry and national greenhouse gas impacts. It was discovered that New Zealand will be unable to sustain their current demands, as they would need to ‘export their problem elsewhere’. (Milne & Grubnic, 2011) Following the discussions regarding the tourism sector, national GHG levels were analysed and the resulting findings showed that over the years, total emissions have increased but in recently between 2008 and 2012 they have plateaued due to a ‘national emissions trading scheme’ (ETS), although they are still at unsustainably high levels. (Milne & Grubnic, 2011) Highlighting a need for alternative methods of accounting and auditing and further emission reductions legislation.

In the final section of the article, the authors found that when it comes to disclosing carbon emissions information, it is difficult to decipher whether a business is ‘pragmatically’ reporting to legitimise their actions or if there is true ‘moral’ intention to work towards a sustainable future with all the convoluted information contained within disclosures. (Milne & Grubnic, 2011) The author concludes the article by stating the actual process of reducing carbon emissions will be an ‘enormous task’ for all parties.

Accounting academics and climate change

Accounting academics perform an integral role in monitoring business climate change practices. They often identify floors and discrepancies that can help to expose companies with lesser moral intentions. It has been raised in multiple articles regarding sustainability, that businesses have little to no scrutinising mechanisms in place to monitor their climate change disclosure, making it a ‘voluntary practice’. (Lodhia, 2007) They can misleadingly divulge any information that paints them in a positive light or justifies their practices. Only in rare instances and at a minimal capacity do businesses discuss their failures or negative impacts. (Brown & Fraser, 2006) This is where accounting academics need to utilise their abilities, resources, and comprehension of the business landscape to uncover the true intentions of corporations. This will highlight the areas that governing bodies and policymakers need to update or introduce further regulations to ensure absolute accountability. (Brown & Fraser, 2006) If corporations are not scrutinised, they will continue with the ‘business as usual’ approach, accelerating the planet’s current trajectory to an unsustainable future. There is honestly no justifiable reason as to why accounting academics should not engage in climate change accounting research as the issue is currently at the forefront of business.

Wesfarmers

The Australian Organisation the research project will be centred around is Wesfarmers Limited, who also have reach in New Zealand. Wesfarmers engage in sustainability reporting through the modes of a discrete report focused on sustainability issues that is released on an annual basis and a company website which contains other formal reports which are often cross-references to one another. (Wesfarmers Limited, 2018) Wesfarmers sustainability disclosure appears to be quite comprehensive, as they address a diverse range of sustainability issues, including people, the community, the environment, human rights, safety, diversity and other issues relevant to their individual divisions. (Wesfarmers Limited, 2018) They use a GRI (Global Reporting Imitative) content index which identifies the standards they have addressed and omitted showing an attempt at transparency. (GRI, 2018)

Embedded within the website are the ’10 principle of the United Nations Global Compact’ which shows they value sustainability. The seventeen United Nations Sustainable Development Goals (SDGs) also take precedence as evident by CEO Richard Goyder signing the statement of support in 2016. (Wesfarmers Limited, 2018) However, an area that requires improvement within Wesfarmers is their impact on climate change but they do at least acknowledge this pitfall. This is where the research project will focus on targeting this issue. (Wesfarmers Limited, 2018)

Project objectives

A key proponent of the research project will be identifying ways in which Wesfarmers can manage their impact on climate change without having to sacrifice too much in the aspect of growth which is the main concern of the company and a sentiment shared by many other corporations. (Wesfarmers Limited, 2018) This could be achieved through ‘Smart Growth’ policies which entice sustainable development through the entire process of expansion not just after initial setup which is what many businesses struggle with as they only begin to think about sustainability after the development of a new outlet. (EPA, 2018) The main obstacles that present a challenge in reducing greenhouse emissions are current water usage and waste disposal outputs which are at dangerously high levels. (Wesfarmers Limited, 2018) Tackling this joint issue through the project will go a long way towards minimising the businesses carbon footprint.

Theoretical perspective

The research regarding this project will be guided by the Stakeholder-Accountability approach to corporate social responsibility (CSR) and social and environmental accounting (SEA). The approach is inclusive of all stakeholders and provides them with ‘power’ to decide how their ‘property’, a portion of the business will be utilised. (Brown & Fraser, 2006) This approach encourages communication between the corporation and the stakeholders which will be key in developing a way to manage Wesfarmers climate change impacts.

The ‘business case approach’ does not offer the same level of stakeholder engagement and is far too concerned with the economics according to Brown. (Brown & Fraser, 2006) Wesfarmers do not need to ‘legitimise’ their operations as they already offer a high level of transparency. This is through their current sustainability disclosure practices and significant growth within the divisions of the company entail Wesfarmers is beyond just merely making a profit for stakeholders but with their influence have an opportunity to set benchmarks for other corporations in this sector and even globally. (Wesfarmers Limited, 2018) Finally, the critical theory approach is too ‘radical’ and extreme for the purpose of the project which leaves the stakeholder accountability as the most appropriate approach to the task at hand. (Brown & Fraser, 2006)

Research Methodology

The data gathering process will involve frequent communication with stakeholders, this will be achieved through surveys and discussion forums relating to how waste disposal and water management can be mitigated. The research project will investigate alternative methods to waste disposal.

Using Coles as an example (a division of Wesfarmers), a large proportion of their waste comes in the form of unpurchased packaged food, fresh produce and meats and with the introduction of new stores, comes increased food scraps. Instead of instantly discarding these items they could be transferred to food banks for those struggling to afford sustenance or Wesfarmers could even develop their own food supplying outlet for the disadvantaged which would be comprised of the food items that would otherwise go on to be waste. (Coles, 2018)

For Wesfarmers to manage their water consumption issues they could introduce water capturing devices so the water can then be reused or placed back into local communities. (Ecosafe International, 2018) These methods and other alternative sustainability practices will be compiled and then offered to the public in a survey format to determine which practices the public deems appropriate. Then the select methods could be implemented and trailed on a small scale to analyse their effectiveness. The most effective results would then be implemented throughout the company on a larger level. This level of collaboration with the public will be vital and could help set precedencies for other corporations to follow suit, with the influence Westfarmers possesses. (Lodhia, 2012)

Interesting and different

Gone are the days of postal surveys, now almost everything is digital, what is even more astonishing is the interaction social media platforms like Facebook, Twitter, and Instagram amass. (kissmetrics, 2018) Following in that vein of thought the surveys will be conducted through these media platforms as well as announcements regarding the research project which will grant vaster audience reach, timelier responses and a simplified means of capturing data, ready for comparison. This mode of data collection will help to satisfy the need for ‘context manufactured by social sciences’ noted in the source article. (Milne & Grubnic, 2011) Although this project will not come without its challenges it has potential to address an area of climate change within Wesfarmers in a unique and different way. (Milne & Grubnic, 2011)

References Australian Government Clean Energy Regulator, 2016. Landfill and alternative waste treatment methods. [Online] Available at: http://www.cleanenergyregulator.gov.au/ERF/Choosing-a-project-type/Opportunities-for-industry/landfill-and-alternative-waste-treatment-methods [Accessed 29 March 2018]. Brown, J. & Fraser, M., 2006. Approaches and Perspectives in Social and Environmental Accounting: an Overview of the Conceptual Landscape. In: Business Strategy and the Environment. Wellington: Wiley InterScience, pp. 103-117. Coles, 2018. Corpaorate Responsibility. [Online] Available at: https://www.coles.com.au/corporate-responsibility/environment/waste [Accessed 29 March 2018]. Ecosafe International, 2018. Excellence Through Water. [Online] Available at: https://ecosafeinternational.com/?gclid=Cj0KCQjwkpfWBRDZARIsAAfeXar6q0KWLwIQWZdk0Lxbx9dJpaP83a2ghJSo_UXdu1BK5Ujjp9DlONIaAilJEALw_wcB [Accessed 29 March 2018]. EPA, 2018. Smart Growth and Climate Change. [Online] Available at: https://www.epa.gov/smartgrowth/smart-growth-and-climate-change [Accessed 29 March 2018]. Frost, G., Jones, S., Loftus, J. & Laan, S., 2005. A Survey of Sustainability Reporting Practices of Australian Reporting Entities. Australian accounting review, 15(35), pp. 89-96. GRI, 2018. Global Reporting. [Online] Available at: https://www.globalreporting.org/Pages/default.aspx [Accessed 29 March 2018]. kissmetrics, 2018. Social Media Metrics. [Online] Available at: https://blog.kissmetrics.com/essential-social-media-metrics/ [Accessed 29 March 2018]. Lodhia, S., 2007. Corporations and the Environment: Australian Evidence. In: The International Journal of Environmental, Cultural, Economic and Social Sustainability. Melbourne: Common Ground Publishing Pty Ltd, pp. 183-191. Lodhia, S. K., 2012. The Need for Effective Corporate Social Responsibility/Sustainability Regulation. In: S. Jones & J. Ratnatunga, eds. CONTEMPORARY ISSUES IN SUSTAINABILITYACCOUNTING, ASSURANCE, AND REPORTING. Bingley: Emerald Group Publishing Limited, pp. 139-149. Milne, M. J. & Grubnic, S., 2011. Climate change accounting research: Keeping it interesting and different. Accounting, Auditing & Accountability, 24(8), pp. 948-977. Wesfarmers Limited, 2017. Wesfarmers sustainability report 2017. [Online] Available at: https://sustainability.wesfarmers.com.au/ [Accessed 29 March 2018].

Gabriel Boehm 110231097

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Gabriel Boehm 110231097