Sustainability reporting has always been considered as the first significant step in implementing a measure that can assist an organization to understand the influence on its stakeholders, and methods in which it may prevent a negative impact on the environment, society, and the economy. The number of organizations that have embedded sustainable reports into their affairs may be small, but there is a rebellion, which is taking place especially in relation to the incorporation of non-financial and financial reporting (Freeman & Alexander, 2013). The expectation that an organization must have a sustainable measure comes from various places. The requirement for such reporting is driven by the widespread interests and needs of an enhancing number of stakeholders. Furthermore, sustainability reporting serve as a framework for most organizations to attain their intended performance in every segment of social, economic, ethics, governance, and environmental dimensions (Albuquerque et. al, 2013). One such organization is Bunnings Warehouse that is the largest household hardware chain in Australia and is owned by Wesfarmers since 1994. Besides, this research intends to highlight the present state of sustainability practices implemented by the organization that assists its stakeholders in financial decision-making.
Current sustainability practices of Bunnings Warehouse
In relation to sustainability reporting practices, the same has been considered very relevant for the organization because not only the stakeholders desire it, but it is also the right thing to do. The organization believes that sustainability is very significant for financial decision-making on the part of its stakeholders. This is because every activity of an organization has a direct impact on the community or society as a whole. Therefore, Bunnings Warehouse intends to enhance the aggregate effectiveness of its affairs in such a way that stakeholders can attain maximum benefits. Moreover, the concept of sustainability reporting have not been implemented as a new practice by the organization, instead there are various actions conducted in order to minimize the usage of energy and water for effective outcomes. In addition to this, Bunnings Warehouse also prioritizes waste reduction, responsible sourcing, active education, and various awareness initiatives for efficient sustainability reporting. On a whole, the main intention of the organization is to make minimal usage of water, energy, and create minimal wastage so that its key sustainability practice (Recycling) can be given due consideration. Further, from the long-term perspective, Bunnings Warehouse intends to discover innovative methods of minimizing its dependence on grid-sourced energy, so that additional reductions in carbon footprints can be obtained (Sustainability reporting, 2012).
One of the key advantages of having a sustainability reporting is that it goes beyond the traditional reporting in terms of measurement of the corporate performance and is therefore highly suitable for the companies, as well as stakeholders. It is important for the organization to be involved in sustainability reporting because such activities are highly beneficial to the stakeholders. Sustainability reporting signifies the role played by the company in protecting the environment and preserving the resources (Thomas, 2016). It helps in creation of wealth. It is the main reason why the requirement for non-financial information has increased over the years.
Bunnings Warehouse prioritizes recycling processes in relation to its current sustainability practice with the broadest variety of recycling items. In order to make the environment-friendly products, the organization follows three basic rules of ‘R’. These three R’s comprise of Recycle, Reuse, and Reduce. Moreover, Bunnings is also committed to minimizing waste and for such purpose, it endeavors to collectively trial recycling and sustainability initiatives both at the local and international levels with the community groups and local councils. In the current scenario, the organization is trailing CFL (Compact Fluorescent Lamp) Recycling measures in Australia because such fluorescent lamps consist of some amounts of mercury that must not be disposed of in the general public places. In addition to this, the organization is also engaging in the Battery back program in order to implement effective ways to dispose of the batteries. The reason behind such practice is because batteries contain heavy metals and if these are not disposed of properly, such heavy metals may leak into the ground. Bunnings Warehouse intends to integrate sustainability throughout its operations that include deporting less waste to landfills. With the assistance of recycling processes, the organization decreased its landfill waste to 2.9 tons in the year 2016.
Bunnings also conduct national programs in Australia so that plain timber pallets can be recycled and reused. Besides, the organization also engages with major suppliers prevalent in Queensland and South Wales so that pine pallets can be bought and reused. A cardboard recycling trial has also been conducted by the organization so that plastic strapping can be recycled. Further, in addition to the Battery back program, Bunnings is also committed to refurbishing various buildings as a significant part of its ongoing expansion measures. Nevertheless, the organization endeavors to seek further recycling initiatives in the upcoming future. It is one of the major initiatives of the organization and strives to ensure the protection of the resources. It is one of the major initiatives of the organization towards the safety of the environment.
Climate change is broadly identified as one of the most significant challenges faced by the society, and the prime cause of change in climate can be attributed to the emissions of greenhouse gas into the atmosphere (Walker & Slat, 2012). Bunnings believe that through sustainability practices, it can play a positive part in encountering such change in climate by taking relevant steps in reducing emissions of greenhouse gases. Based on its survey, around 85% of its greenhouse gas emissions appear from the use of electricity in its stores. The remaining is largely from the waste that is generated through its affairs (Bunnings Australia, 2016). Therefore, the organization intends to lower its use of energy through various kinds of initiatives like energy efficient lighting systems. Further, the organization is committed to minimizing its carbon footprint and for such purpose, it has installed solar photovoltaic systems in most of its stores so that 10-20% of energy can be attained. During the year, Bunnings also trialed climate adaptive comfort heating and cooling systems in its stores, which is considered as a more effective system for conservation of energy. The reason behind this can be attributed to the fact that such system uses a natural air tempering technology that makes lesser utilization of energy (Pearce, 2012). This provides a clear cut demarcation that the company is intended to save the resources.
Product safety and ethical sourcing
During the year, Bunnings Warehouse continued to operate with its suppliers so that sourcing measures can be strengthened, with hundred percent of its directly sourced suppliers through Ethical Sourcing Programs (Bunnings Australia, 2016). The organization also attempts to engage with its suppliers in order to make sure that the safety standards of their products are adequately adhered to. In relation to this, it conducts consistent audits of its products so that conformance with the significant mandatory standards can be ensured. Further, it also undertakes independent safety examinations on some of the products to ensure compliance to expectations of customers.
Another relevant area of concentration for the organization is timber, as they have a zero tolerance measure for illegally attained timber. It is the goal of the organization to ensure that all wood and timber products attained are originated from well-managed and legal forest activities (Thomas, 2016). In the current scenario, Bunnings have made an effective progress in this segment with more than 95% of its entire timber sourced from legally verified operations of forest and low-risk plantation strategies. Not only this, the organization is entirely confident that more than ninety percent of its timber products are sourced with illustrated progress towards attaining independent certification or sourced from independently certified forests. Nevertheless, Bunnings intends to strengthen its sourcing strategies with more suppliers becoming significant members of the SEDEX (Supplier Ethical Data Exchange) program that intends to enhance transparency in its supply chain so that sensitive areas can be looked after effectively. Besides, in the year 2017, the organization has started participating in EDRA programs that prioritize retailers to gather collectively in order to maximize labor and environmental conditions (Bunnings Australia, 2016).
Bunnings is also committed to assisting the communities wherein it operates by contributing to domestic, regional, and national charities, causes, and organizations throughout Australia. During the year, its stores assisted in raising more than $37 million through community strategies. The organization also aims to operate closely with primary nonprofit organizations like Lions Australia, Rotary, local charities, etc. In addition, the organization has also worked with emergency services to provide relevant assistance to the communities in case of contingencies or emergencies (Bunnings Australia, 2016). Hence, it is creating a environment where the organization can operate and provide immense benefits to the community at large. It intends to create a long lasting impact by dint of its activities.
The organization is also in a unique position to assist various customers by making it simpler and affordable for them to get accustomed to sustainable practices in their homes or garden. In relation to this, it firstly offers the customers with a wide variety of products and solutions to address their sustainability requirements. Sustainability is the need of the hour and it has collectively joined hands with the government to provide fuller development to the organization together with the benefit of the surrounding (Perrini & Tnecatti, 2006) It then backs up such offering of products through sound advice and expertise available online and in-store. It also operates with several government regulators to establish new and more suitable sustainability items and solutions, thereby playing a key role in implementing efficient government policy as a whole.
Implications for stakeholders in financial decision-making
Stakeholders often have a potential interest in or affect the company, its financial outcomes, and its operations. Such stakeholders also have the capability in influencing the failure or success of an organization at various levels (Wicks & Colle, 2010). Moreover, when it comes to sustainability reporting, the accountability of organizations can improve, thereby playing a key role in maximizing trust, facilitating sharing of ideas or values in order to establish a more cohesive environment (Ballot et. al, 2006). Organizations like Bunnings utilize sustainability reporting practices in order to inform about their risk evaluation measures so that their businesses can be boosted. Shareholders, businesses, governments, etc all directly attain benefit from sustainability reporting.
Stakeholders like customers, suppliers, shareholders, etc believe that sustainability reporting instills discipline and assists an organization think about and explain its long-term vision. With the assistance of sustainability reporting, major stakeholders can easily track the performance of Bunnings in order to make relevant financial decisions associated with the future (Kruger, 2015). The biggest implication for various stakeholders in financial decision-making is associated with the fact that sustainability reporting can assist in cutting costs on various aspects of their operations, especially in enhancing effectiveness. Furthermore, Bunnings can easily communicate with their investors regarding their KPI’s and social impact in order to allow them in making relevant financial decisions (Douma & Hein, 2013). Even though the company in its financial accounts already reports financial information, yet stakeholders desire for information wherein the contribution of the company to the sustainability of a higher economic system is present. For instance, the offering of relevant details associated with recycling, conservation of water can be utilized by investors to analyze the strength of Bunnings in order to make relevant financial decisions (Ruffing, 2007). In other words, analysts and investors can utilize such additional financial information provided by Bunnings in order to analyze its performance and ultimately make investment decisions. Sustainability reporting can also influence corporate reputation and consumer behavior (Caradonna, 2014). Besides, the consumers of Bunnings can attain its more positive image and will be more likely to rely upon it. Stakeholders like financial institutions also rely upon such sustainable reports in order to analyze whether loans must be given to the organization or not.
The CSR report, thus, offers an organization like Bunnings warehouse with an opportunity to communicate its sustainability practices with the stakeholders that not only allows them in establishing an effective connection but also serves as an important tool in financial decision-making (Scott, 2009). Corporate sustainability not only helps in reducing the cost of the firm rather helps in differentiation in a positive way. This leads to an enhanced level of performance with a competitive leverage (Investor & sustainability, 2014). The stakeholders are able to get a better knowledge of the company with the aid of such information. If the practice of the company ranks high then it will result in a effective performance.
In due consideration to above, organizations can recognize areas of relevant details that have not altered since the previous report. In simple words, organizations and accounting advisors may choose to update only the indicators and topics that have altered and to re-publish the unchanged disclosures. Moreover, in order to enhance the credibility of their sustainability reports, organizations can possess internal control systems as a relevant part of their procedures for reporting and managing the information. These internal control strategies are vital to the overall credibility and integrity of a report. Further, accounting advisors must make sure that stakeholder engagement is executed properly in the report so that trust between the organization and the stakeholders can be strengthened
In light of the above analysis, it can be concluded that sustainability reports provide an effective opportunity to an organization to communicate its CSR practices to the stakeholders. Such reporting has also become a transparency medium for the stakeholders, especially suppliers, employees, communities, etc. Moreover, in the present scenario, addressing the concerns of stakeholders has become very significant, and sustainability reports can prove to be of immense help here. Besides, in relation to Bunnings Warehouse, the concept of sustainability has been well maintained by the organization, as it has followed a reasonable and balanced measure of depicting its sustainable performance that includes both negative and positive contributions. On a whole, sustainability reporting must fit into a wider process for establishing organizational measures, implementing action strategies, and evaluating outcomes. Moreover inclusion of more than financial information helps to betterment of the image, as well as performance.
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