Overview of Sustainability and Sustainable Development

Discusss about the Sustainability Reporting in Accounting on Caltex.

Sustainability is difficult to describe on its own, but sustainable development is one that can meet the present needs without implicating the future generations, from meeting their needs. A sustainability report, on the other hand, is a report that contains information about the social, economic and environmental performance in an organization.

Caltex is an Australian company that supplies fuel and integrates oil refining in the market. Caltex ensures sustainability reporting because they want the growth of the future generation. The company has adopted sustainability management to so that their environment, economy, and society can co-exist in harmony. The company aims at creating a greener future and this they do by pursuing new growing business in energy. The company has also created new growth drivers that are eco-friendly.

In this research, we looked at the ‘Sustainability Reporting’ in Caltex that was published since 2005. The report entails the sustainable development performance of the company and other activities. It also involves how the sustainable development has impacted its stakeholders. Some of the material issues discussed in the reporting are climate change green growth strategies, customer satisfaction activities, and environmental management strategies.

In Caltex, some of the workers ensured sustainability reporting by integrating the company’s objectives, to sustainability. In a given strategy, the workers evaluated all the risks involved in achieving the strategy that could affect the company’s social, environmental and economic performance. Measures are then taken for the risks involved, and opportunities are also identified.

In the sustainability reporting, we were also able to see that Caltex has involved some reporting that shows its performance in the market regarding social, environment and economics. One of the reports that the company has been covering has been Environment, Health, and safety (EHS). In this report, they have included issues like the health of their workers, the rates of accidents in the workplace, the company’s emissions of gases and other pollutants. Another report that they included was the Corporate Social responsibility (CSR). In this report, Caltex has included matters such as training and educating its employees, diversity in the workplace and ethical issues in the workplace.

Caltex also involves greenhouse reporting in their sustainability reporting. As we are aware, Caltex is engaged in the supply of fuel and thus releases a lot of gases in gases that are at times poisonous in the atmosphere. Thus the company always includes a report on their gas emissions and how they control these emissions and their efforts to ensure that the emissions are not poisonous.  The company follows suit the guidance provided by the Securities Exchange and Commission regarding any information based on climate change or greenhouse gas emissions.  The company records the data of all the greenhouse gas emissions (Dobele, Westberg, Steel and Flowers 2014).

Caltex’s Sustainability Management and Strategies

Caltex uses and at times refers to the Global Reporting Initiative (GRI) framework for their sustainability reporting. With this framework, they look at the issues that the company is facing and focuses on its stakeholders. Another structure that the company uses is Climate Disclosures Standards Board (CDSB). The CDSB aims at ensuring corporations disclose climate is changing information in their reports by working with other professionals to develop a framework that will generally be accepted for use (Haque and Islam 2015).

The Caltex Company focuses on integrated reporting in their sustainability reporting. Here the company reports both financial and non-financial information in an integrated way. This is different from the stand-alone reporting for financial and non-financial information. The company includes sustainability information in its reporting regarding the social, environmental and economic performance of the company.

Caltex ensures assurance in its sustainability reporting, this they achieve by the inclusion of assurance providers that are professional, holding panels for stakeholders and other individuals or groups. In their reports, they include the commentary of the stakeholders, group and also the professional assurance providers. When providing the assurance, Caltex ensures that they are accountable and follow the International Standard of Assurance Engagements (Guo 2018).

We found at that by including its workers in the integrated reporting positively affected the company. They were able to add value to the company through the evaluation of the risks and coming up with measures. This, in turn, added value to their clients because the services they offered ensuring sustainable development in business objectives, sustainability reporting, and assurance.

We found out that the sustainability reporting has also helped the company in its overall success.  The reports showed that Caltex is committed to environmental and social issues. Also, they are aimed at ensuring that their employees and community at large are not affected shortly and that they can meet their needs.

Caltex also aims at promoting transparency in their organization through the integration of the financial and non-financial information in the reporting. All the members, stakeholders and community at large can access the reporting and also give feedback (Gustafson et al. 2014). This feedback helps the company in knowing their performance in regards to the society, economy, and environment.

The sustainability reporting in Caltex has also been able to prove their efforts in maintaining a good relationship with other parties such as the community around them and its stakeholders. This good relationship has been able to be maintained due to the transparency that Caltex has with its community. The community feels part of the company because they are aware of what is going on in the company and can also see the efforts that the company is making to ensure sustainability development. This also has lead to a good working environment because the company and the community are in harmony with each other. This has led to the growth in shareholder in the company which has also led to increase in the brand value (Haque, Deegan and Inglis 2016).

Caltex’s Sustainability Reporting and Assurance

Also, Caltex has been able to protect its reputation through the sustainability reporting. Its customers and community at large believe that Caltex is an excellent source of fuel and it never fails them (Heenetigala, De Silva, Armstrong and Ediriweera 2016). The company’s good reputation has ensured that they have a good relationship with their clients. They have been able to build trust with its clients because the clients believe that the organization will provide quality service. The trust enables the company to gain loyal clients because of their high reputation.

Also clients want to believe that a company is in their best interest. For a company like Caltex it ensures that their environment is safe and healthy for the society around. They ensure that they do not cause any pollution in the environment be it from the gases or the noise pollution. Some of the clients also have family members working in the organization and they value how the employees are treated within the organization in terms of the working conditions. The company aims at ensuring that the working conditions are nice and suitable for its employees to attain sustainable development.

Caltex includes greenhouse gas emission data in its reporting. With this, they aim to identify possible ways that they can use to reduce the emissions of the gases especially if they are poisonous. The company has been able to do this by coming up with ways to emit gases that ensure the environment remains safe and is not prone to climate change (Utama 2017). This will ensure that the future generations are not affected by the poisonous gases which can affect their health and also they will not be affected by any adverse climate changes that may result. These include increased heat waves that may result from poisonous gases getting trapped in the ozone layer.

Finally, we found that through the integrated reporting, the company has been able to achieve sustainable development through identification of risk and coming up with measures that can be used to eliminate the risks. Caltex has set up sustainability management that mainly focuses on evaluating the risks that might come up due to the strategies. This management is carried out by professionals who then come up with measures that can reduce or eliminate these risks. The professionals have become very effective in ensuring that Caltex improves the performance of the social, economic and environmental factors. This has led to sustainability reporting and accounting (Dobele, Westberg, Steel and Flowers 2014).

Impact of Sustainability Reporting on Caltex’s Performance

Conclusion

Caltex Company has experienced growth over the last few years due to sustainable development and management. The Sustainability Reporting that they have been doing since 2005 has benefited the company significantly.  The stakeholders and other members have been able to maintain a good relationship with the company, and this has caused its brand value to increase and also its shareholders (Maroun and Garnett 2014). The increase in shareholders has to lead to increased investments in the company which has benefitted the company significantly. This has improved their economic performance (Bruns and Skretowska 2016).

Caltex Company has been able to achieve sustainable development. By ensuring that their gases are not poisonous, they have improved their environmental performance in that their environment has not been polluted. This way they have not contributed to any adverse climate change. The efficient working environment has also improved the working conditions which ensure maximum output from all employees (Abhayawansa and Guthrie 2014).

Finally, they have been able to improve their social performance. This is evident in the excellent relationship they have been able to foster with groups and individuals in the community and also its stakeholders by including them in the sustainability reporting. Thus Caltex has had a positive impact on sustainable development (Dissanayake Xia and Wu 2015).

References

Abhayawansa, S. and Guthrie, J., 2014. Importance of intellectual capital information: a study of Australian analyst reports. Australian Accounting Review, 24(1), pp.66-83.

Bruns, P.A. and Skretowska, D., 2016. Assessing Quality not Quantity: A Unique Cross-Country Comparision of CSR Reporting Quality.

Dissanayake, N., Xia, B. and Wu, P., 2015. Measuring sustainability performance within the Australian energy industry. In Proceedings of the 19th International Symposium on Advancement of Construction Management and Real Estate (pp. 135-143). Springer, Berlin, Heidelberg.

Dobele, A.R., Westberg, K., Steel, M. and Flowers, K., 2014. An examination of corporate social responsibility implementation and stakeholder engagement: A case study in the Australian mining industry. Business Strategy and the Environment, 23(3), pp.145-159.

Guo, Q., 2018. Rhetoric in financial reporting: evaluation of ISA 720.

Gustafson, D.I., Collins, M., Fry, J., Smith, S., Matlock, M., Zilberman, D., Shryock, J., Doane, M. and Ramsey, N., 2014. Climate adaptation imperatives: global sustainability trends and eco-efficiency metrics in four major crops–canola, cotton, maize, and soybeans. International journal of agricultural sustainability, 12(2), pp.146-163.

Haque, S. and Islam, M.A., 2015. Stakeholder pressures on corporate climate change-related accountability and disclosures: Australian evidence. Business and Politics, 17(2), pp.355-390.

Haque, S., Deegan, C. and Inglis, R., 2016. Demand for, and impediments to, the disclosure of information about climate change-related corporate governance practices. Accounting and Business Research, 46(6), pp.620-664.

Heenetigala, K., De Silva, C., Armstrong, A. and Ediriweera, A., 2016. Investigation of criteria used for assurance practices of sustainability reporting in Australian listed companies. Victoria University.

Maroun, W. and Garnett, R., 2014. The Transnet pipeline case study. Emerald Emerging Markets Case Studies, 4(7), pp.1-11.

Utama, A.G.S., 2017. Framing Corporate Social Responsibility On the Websites Of Company (Mudflow Incident). Archives of Business Research, 5(12)