Corporate Sustainability Reporting: A Focus on Beacon Lighting Groups
Executive SummaryThis report aims to examine the concept of corporate sustainable reporting and how it applies to companies in different markets and industries. It evaluates the role of business in achieving sustainable reporting, the impacts of business’s sustainability reporting, and the strategies business can adopt to achieve sustainable reporting. Additionally, it examines how companies demonstrate their commitments towards sustainability reporting by evaluating Beacon Lighting Groups Limited annual reports. The report employs secondary sources such as academic journals in the research.
Sustainability is gaining momentum in the business world, with companies recognizing their roles in achieving sustainable development goals. Business activities such as reporting are vital in achieving sustainable development’s economic, environmental and social pillars as critical sustainable development goals intertwine with most business activities. Similarly, sustainability development impacts business operations. It influences public opinion, influences business ability to access finance, and opens new business opportunities. Businesses can build a sustainable leadership and management team, adopt sustainable innovation practices, and implement sustainable competitive advantage to demonstrate their commitment to sustainable development.
The evaluation of Beacon Lighting Groups Ltd.’s annual report suggests that companies do not effectively demonstrate their commitment to achieving sustainable reporting. The company report provides little information on the company’s strategies and commitment towards achieving various pillars of sustainability development. Sustainability will impact how customers, investors, financial institutions, and employees view business, hence the need for companies to be part of this change.
Table of Contents
TOC o “1-3” h z u Executive Summary PAGEREF _Toc88297871 h 11.0 Introduction PAGEREF _Toc88297872 h 32.0 Corporate Sustainability Reporting PAGEREF _Toc88297873 h 32.1 Benefits of Sustainability Reporting on Business PAGEREF _Toc88297874 h 43.0 GRI Principles PAGEREF _Toc88297875 h 53.1 Principles for Defining Report Content: Stakeholder Inclusiveness PAGEREF _Toc88297876 h 63.2 Principles for Defining Report Quality: Timeliness PAGEREF _Toc88297877 h 64.0 Evaluation of Beacon Lighting Groups PAGEREF _Toc88297878 h 74.1 Evidence of Application of Stakeholder Inclusiveness at Beacon Lighting Ltd. PAGEREF _Toc88297879 h 85.0 Conclusion PAGEREF _Toc88297880 h 86.0 References PAGEREF _Toc88297881 h 10
1.0 IntroductionThe increasingly competitive global business environment demands excellence in every aspect of a profit-driven enterprise, primarily through developing sustainability to compete more effectively. By definition, sustainable development refers to adopting business activities and strategies that actively meet the demands and needs of the entire enterprise and the current stakeholder. It involves the business’s ability to sustain, enhance, and protect the natural and human resources needed for the future. From this definition, despite having received widespread recognition as an essential component in business, it is clear that the concept of developing sustainability is still very new, and organizations are yet to embrace it fully. Several business executives demonstrate that pursuing strategies aligned to sustainable development makes sound business sense. Today, companies are looking for ways to cut costs and ensure a favorable natural environment and resources outcome through sustainability approaches. By considering the Beacon Lighting Groups Ltd. 2021 Annual Report, this report intends to explain what corporate sustainability reporting is and the key benefits associated with this type of reporting. It will also describe two principles: one for defining report content and one for report quality from the GRI Foundation 101 and evaluate Beacon Lighting Group’s implementation of the selected principles in its most recent annual report.
2.0 Corporate Sustainability ReportingBusinesses in both developed and developing countries are increasingly being pressured to demonstrate greater accountability and transparency in their operations. Because of the potential health and environmental risks posed by their products and services, businesses are under increasing pressure to produce, assess, and make public information about their sustainability performance and impacts. While measuring progress toward global sustainable development goals is difficult, Corporate Sustainability Reporting may prove to be an effective tool in this regard. The tool can assist businesses and organizations in assessing their sustainability performance, setting goals, and assisting in the shift toward a green economy that is low in carbon and resource-efficient. It is available for free download here.
Business plays a vital role in achieving the full potential of sustainability development. The key priorities and sustainable development issues are interweaved with business activities, making business part and the solution to sustainability development. Business, directly and indirectly, contributes to the three pillars of sustainable development (Coulment et al., 2015). For instance, business influences all significant global environmental changes, from greenhouse gas emission, energy, and natural sources consumption, to waste production, impacting the environmental pillar of sustainability development. Additionally, the global over-reliance on the private sector for wealth creation and market integration makes the role of business central to sustainable development. These sectors contribute to global market integration, technological advances, and telecommunication and provide various serves that previously considered states’ roles (Coulment et al., 2015). The contribution to a country’s economic growth and development leads to better living conditions for citizens and contributes to sustainability development’s social and economic pillar. This implies that companies are crucial to the global realization of sustainable development goals.
2.1 Benefits of Sustainability Reporting on BusinessSustainability has gone from a buzzword to a reality over the past three decades, as evidence shows that businesses that incorporate it into their operations reap enviable rewards. As a result of this reality, more and more businesses are beginning to implement sustainability reporting. This figure, according to Hristov and Chirico (2019) will continue to rise from 20 percent in 2010 to 90 percent by 2020 for the S&P 500 companies. The impact of a company’s operations on the environment, society, and the economy are all measured through its corporate social responsibility (CSR) reports, which are critical for the company (GRI Standards, 2016). The data collected through sustainable reporting can be used by businesses to improve their operations and lower their operating costs, provided that it is collected in an accurate and meaningful manner. Not only do they gain a better understanding of their energy consumption by reviewing their waste cycles, but they also discover opportunities for product innovation and the creation of a circular economy.
Sustainability is a good business in itself and offers several benefits to the company. It serves as a finance driver. Financial institutions and investors are increasingly becoming concerned with business involvement in achieving sustainable development goals. In the future, it will be challenging for companies without sound involvement in different sustainability development pillars to access finances from financial institutions or attract investors (Coulment et al., 2015). For instance, the number of financial institutions partnering with UNEP to integrate environmentally sustainable development goals in their operations continues to rise. This implies that financial institutions will consider companies’ involvement in environmental practices in their core operations in the future. Sustainability development is becoming an essential part of different institutions’ operations; therefore, businesses should ensure they are part of the change.
Third, sustainability development opens new business opportunities. The shift towards a sustainable future implies that businesses should change their operations to benefit from the opportunity sustainability development presents (Evans et al., 2019). New markets, new technologies, and partnerships are coming up, providing business opportunities for companies. For instance, the Petroleum industry is redefining its business from oil energy to renewable energy due to climate change convections and reducing gas emissions. This creates new markets, partnerships, and technologies such as partnerships between governments and energy and transport companies and the emergency of new technologies like photovoltaics. The business world is changing, and companies that want to survive in the future should be responsive to the changes.
Lastly, sustainability development will impact public opinion about a business. There is a growing public concern about the social, economic, and environmental state of societies. Therefore, the ability of a company to do something in contributing to the development of these pillars or be seen as doing something will impact public attitude towards these businesses (Coulmet et al., 2015). Public opinion influences company reputation, affecting company market share, investors confidence, community relations, and companies’ ability to attract employees. Sustainability development is a buzzword globally, and customers and the public are concerned with organizational involvement.
3.0 GRI Principles
The growth of a sustainable business should be the company’s broad goal and should involve every aspect of business and relationships. Companies should develop sustainability strategies that align with all company activities and business activities with the changing environment (Danciu, 2013; Anderson & Piacenza, 2016). Business should demonstrate to stakeholders their commitment to enhancing the company’s sustainability development. This can be achieved through sustainable management, sustainable innovation, and Sustainable competitive advantage.
Achieving high-quality sustainability reporting requires adhering to certain reporting principles. If an organization wants to claim that its GRI Standards-compliant sustainability report adheres to the Reporting Principles, it must do so. Both the content and the quality of a report can be defined by a set of principles known as reporting principles. The Reporting Principles can be categorized into two: those that define the report’s content and those that define the report’s quality.This report will focus on stakeholder inclusiveness and timeliness as the two main reporting principles.
3.1 Principles for Defining Report Content: Stakeholder Inclusiveness
GRI (2016) provides that reporting organizations shall identify stakeholders and explain response to their interests and expectations. An entity or individual that can reasonably be expected to be significantly impacted by the reporting organization’s activities, products, or services, or whose actions can reasonably be expected to impair the reporting organization’s ability to implement its strategies or accomplish its objectives are considered stakeholders. Included in this category, but not limited to, are organizations or individuals with legal claims against the organization based on their rights under the law or under international conventions of conduct. They include workers, suppliers, local community, shareholders, management, vulnerable groups, civil society, the government and other entities.
Reasonable interests and expectations of stakeholders must be considered when organizations make decisions about report content. For the purpose of involving stakeholders in the report-making process in a systematic or generally accepted manner, approaches, methodologies, or principles can also be used. It is possible to fulfill this principle by keeping an eye on the news media, engaging with the scientific community, or participating in collaborative activities with peers and other stakeholders. The overall strategy is to ensure that the information requirements of all stakeholders are met to the greatest extent possible. When describing the stakeholders to whom it considers itself accountable, the reporting organization can draw on the outcomes of stakeholder engagement processes that the organization has implemented in the course of its ongoing operations.
3.2 Principles for Defining Report Quality: TimelinessAccording to GRI (2016, p.16), the principle provides that “the reporting organization shall report on a regular schedule so that information is available in time for stakeholders to make informed decisions.” The term “timeliness” refers to both the frequency of reporting and the proximity of the report’s impacts to those impacts. Information usefulness is closely linked to whether stakeholders have time to incorporate it into their decision-making process. Consolidated disclosure of economic, environmental, and social impacts is expected to be provided on a consistent basis by the reporting organization despite the fact that this is desirable for some purposes.
A consistent reporting frequency and reporting period length are also essential for ensuring that information can be compared over time and that the report is easily accessible to all parties involved in the process. Providing stakeholders with timely sustainability reporting as well as other forms of reporting, such as financial reporting, can be beneficial if their reporting schedules are coordinated (GRI, 2016). The organization’s ability to strike an appropriate balance between releasing data as quickly as possible while also ensuring that it is accurate and reliable is critical when it comes to restating previous disclosures, according to Lokuwaduge and Heenetigala (2017). For example, Beacon Lighting Limited annual report reveals a consistency type of reporting that is timely to facilitate the decision-making process.
4.0 Evaluation of Beacon Lighting GroupsBeacon Lighting Groups is an organization that operates in the middle to upper market within the residential lighting industry and has more than 115 stores across different states and territories (Beacon Lighting Groups Ltd., 2021). The annual reports are essential in demonstrating company performance via various techniques, including graphs, charts, and images in a way that is easy to understand while painting an accurate image of the company’s position (English & Schooley, 2014). In the 2021 Annual Report, Beacon Lighting Groups Ltd. (2021) has not demonstrated sustainability development in its strategy and general direction. The report briefly mentions sustainability in the risk analysis with the inclusion of environmental risks to its supply chain management (Beacon Lighting Groups Ltd., 2021, p. 9). The report conspicuously lacks a sustainability development structure, despite mentioning the need to protect the natural environment to reduce risks associated with neglect of the environment. While Beacon Lighting Groups Ltd. Annual Report (2021) acknowledges the environment’s role in expanding its financial, economic, social, and community realms, the lack of a sustainability program reduces its triple bottom line. There is a need for the organization to develop a strategy to ensure the protection of the environment. Hsu et al., 2019 require organizations to understand and adapt to theories relating to organizational adaptation. In the current business environment, customers require organizations to adhere to sustainability programs, a demand-side condition currently used to create competitive advantage. Therefore, despite the positive performance of Beacon Lighting Groups Ltd., the changing market in Australia calls for the ability of the company to adapt to the evolving customer needs and preferences. This adaptation will also have positive outcomes for the environment and enhance business continuity in the future.
4.1 Evidence of Application of Stakeholder Inclusiveness at Beacon Lighting Ltd.
GRI (2016) provides that reporting organizations shall identify stakeholders and explain response to their interests and expectations. An entity or individual that can reasonably be expected to be significantly impacted by the reporting organization’s activities, products, or services, or whose actions can reasonably be expected to impair the reporting organization’s ability to implement its strategies or accomplish its objectives are considered stakeholders. Businesses are racing to build companies that contribute to social, environmental, and economic pillars of sustainable development goals. These elements are important to various stakeholders because of how they are impacted through different interactions and interests. Beacon Lighting Groups includes its stakeholders in the annual reports to demonstrate their commitment to building a better business that is aware of the interests and expectations of all entities related to it. According to GRI (2016), the report content considers the outcomes of all stakeholder engagement process accepted specifically for the report. For example, Beacon Lights Ltd has considered the outcome of all its stakeholders engagement processes to inform its decisions regarding the current report.
5.0 Conclusion
This report examines the concept of corporate sustainability reporting and its applications to business in industries and markets. Business and sustainability reporting are dependent on one another. Business plays a central role in achieving the goals of sustainable reporting while the latter impacts business operations and other interested entities. Companies employ sustainable reporting, innovation, and competitive management to demonstrate their commitment to sustainability efforts. By evaluating Beacon Lighting Groups’ annual report, it is conclusive that a business needs to show its commitments towards achieving social, economic, and environmental sustainability by following upon the recommended GRI standards and principles. Sustainability reporting will be vital for business survival and competitive advantage in the future; therefore, business such as Beacon Lighting Groups should demonstrate commitment towards this course.
6.0 ReferencesAnderson, G. E. & Piacenza, L. D. (2016). Embracing non-financial reporting standards: Shareholder communications. Directory Advisory. 70.
Beacon Lighting Group Ltd. (2021). Annual Report, 2021. Acquis data Pty Ltd. https://www.beaconlighting.com.au/media/wysiwyg/investor-page/BLX_FY2021_Annual_Report.pdf
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