SUSTAINABILITY REPORTING BY COMPANIES AND BUSINESS CONDUCT
Reporting is one thing that organizations cannot operate without doing. The reporting is always required since it gives the required information to the stakeholders. Reporting comes in many categories, and sustainability reporting is one of them. Sustainability reporting is a report prepared by companies where details which touch on environmental, economic, social and governance status are given (White 2009, p.1). This report is one of the non-financial ones a company is supposed to give. It plays other roles such as wooing investors among others.
According to White (2009, p.1), Sustainability reporting has more than just giving gathers information. It holds more in terms of fostering a company’s operations. It plays a major role in ensuring that the interests of all the stakeholders are met. This reporting is supposed to be done in consideration of certain important factors. One of these important factors is openness.
In an organization, handling of sustainability issues should be done with the utmost transparency ever (Olowokudejo, Aduloju, & Oke, 2011). This is to ensure that the real issues are addressed properly. The reporting should not mislead the interested partied in any way. This will be against the required standards of sustainability reporting. A company should always put in a place a team of trust people who are able to do competent work in terms of their reporting.
The other actor which should be considered is that the information given in the reports should be easy to trace. This means that all the information given in the reports should never be hard to verify. This factor helps in ensuring that only the details which reflects the real issues in an organization is put in the reports. This helps in ensuring that the stakeholders have the truth regarding the state of affairs in a company. The information given in the sustainability report should be a reflection of what the company records show. This should also be a reflection of the environment and policies in an organization.
The other important thing which should be considered in sustainability reports is compliance. There are several bodies which a company must comply to its regulations. Therefore, it is important to ensure that the report given shows true compliance of all regulatory authorities requirements. There are also other reporting standards which should be complied with.
It is believed that companies are able to do well in terms of sustainability if they talk about it. It is believed that documenting a company’s sustainability helps in growing the culture in a company. The reporting should always be done after proper examination and monitoring process of sustainability (Scaltegger, Bennet, & Burrit 2006, p.513). The sustainability reporting should be done with regard to the globally recommended guidelines.
To make the reporting better, there has to be a strong consideration of ethical and moral standards. Ethics refers to the collection of acts and behavioural trends which foster good life for all human beings (Verstraeten 2000, p.43). According to Scaltegger, Bennet, & Burrit (2006, p.513), it is important to ensure that sustainability reporting gives details of the ethical status in a company. This will be able to spread the gospel that it is important for organizations to have policies regarding their ethics. According to Donaldson (1982, p.72) morality refers to the standards of handling right and wrong of a group of people. This should also be reflected in the sustainability reports. Ethics and morality should be reported together since the support each other. For example, ethics is a good measure of moral standards.
The world has become one funny place where contravention of requirements takes place. There are many areas where standards and other requirements are not followed to the letter. Companies are unable to perform environmental protection in their operations. Many companies which have operational processes with emissions have not been able to do the right things. If a company has harmful processes, it is important to take precautions so that the environment is not harmed. One of the precautions that such organizations can take is arresting the emissions. These companies can also recycle whatever is extracted from the processes in an effort to make the environment more habitable which is a good step towards sustainability.
There is another aspect of sustainability regarding ethical and moral practice. Companies should ensure that all operational processes are carried out in ethical and moral correct way (Donaldson 1982, p.72). Many a times, the processes of many companies are done in a way which is not morally and ethically up right. For example, the procurement area is one place where malpractices take place. Bribery takes place in many companies so that tenders and other contracts may be won. This is one of the ways through which ethical and moral standards are not respected. There are also malpractices in recruitment processes in many companies. People hire their own thus contravening the rights of many human beings.
In addition, companies are supposed to have systems which ensure that every occurrence is well captured. These systems may be related to accounting and human resource. This is usually not the case since some companies have systems which are not functioning. Some others do not have proper systems in place. This is usually not the case when the companies are making their reports. They usually report that there are accredited systems in place. This comes out as unacceptable towards development of sustainability in the company as well as in the world.
The sustainability reports are also supposed to report on the internal relations of employees. The way employees relate should be reported. The general welfare of companies’ work force should be well detailed. Basically there should be satisfaction and cohesion among the employees of a company. The communication levels should be well set for a company to achieve sustainability. It occurs that the situations in companies regarding employees are not the best. This is usually not reported by the companies in their sustainability reports.
The financial status of a company is usually its backbone. It is usually the focal point of the stakeholders in the company since it highlights the state of their investments (Valenti, Luce & Mayfield 2011). Generally, companies should have financial reports which give the true and fair view of affairs in the company. In most companies, the books of accounts are usually done in ways which do not reflect the state of affairs financial wise. The entries are usually tempered with to reflect what the company leadership wants. With this, the reports which are given are not showing the real issues in the company.
Governance of a company is also a very important factor towards sustainability. The governance of a company refers to the state of operation and control. Corporate governance is not the same as management. According to Razaee (2008, p.87), the governance of the company involves the board, some managers, shareholders and some other stakeholders. The governance of a company should always be in a way which puts the interests of the stakeholders in mind. It should be procedural and considerate enough of the impact their decisions would have on the whole world (Razaee 2008, p.87). Many companies have very many governance problems. The board members of some companies have questionable characters. Some of them try to influence processes in the companies they govern. Others try to misappropriate funds of the organizations they lead. Despite the presence of these bad acts, the sustainability reports of the companies reflect otherwise. The sustainability reports are usually put in a way which gives the governance of these companies applause (Christofi, Christofi & Sisaye 2012).
Safety in a work place is another issue pertinent to sustainability. The places of work should always be safe for all. The safety should not be for the employees but everybody. Safety precautions should be put in place to ensure that the internal as well as external surroundings in a company are safe. This should include getting health and safety certification from the concerned bodies. It has emerged that many companies have poor environments with regard to safety. The employees are not given protective gear while at work. Some companies have offices which do not have proper ventilation. There is also the fact that some companies do not put in place proper amenities such as lighting and drinking water. These negative issues are usually not reflected in the sustainability reports which organizations produce annually.
The economic dream is that all companies become socially one. There is the factor of corporate social responsibility for all companies. Companies are supposed to be involved in many social activities towards creating positive impacts. Furthermore, they should be able to relate well with the other companies. This is usually not the case in most companies. This is because they do not engage in any activities aimed at improving the living standards in the society. Many companies do not relate well with their counterparts. These negative issues are usually not reflected in the sustainability reports. The reports are put in a way which shows good social standing of the company.
Preparation of sustainability requires that targets for the company get well detailed. This should be done in a way which reflects possibility (Brink 2011, p.17). It is sad to see how many companies give impossible targets in their sustainability reports. Basically, the targets are aimed at showing the stakeholders what to expect within the next financial year. If the targets are not achievable under any circumstance, the stakeholders are cheated and the road towards full sustainability is misled.
Therefore, it is evident that sustainability reporting by companies is merely an attempt to green wash their business conduct. This is because companies are usually involved in very many immoral and unethical actions. If these actions were to come open to the public domain, there would be very dire consequences for the company and some staff members.
Due to the effects of misleading information in the sustainability reports, stakeholders are not able to put the right efforts so that they may improve their companies (Webber, Apostolou & Hassel 2004). This is because they always feel that the companies are in the right direction and therefore no need of intervention. This is usually a very bad thing for company leaders to do since it derails all the efforts which would have been put to straighten the economic, governance, social, and environmental of affairs.
Sustainability is something which should not be compromised on. This is because it is a good way of making the world habitable. It is also a good thing towards making lives better. The bodies which regulate companies should come up with procedures which ensure adherence to all the stands put in place (Spitzeck 2009). All the loopholes should be sealed through proper sustainability management in companies. Each country should come up with laws which ensure that everyone contributes to sustainability. The laws should be put in a way which requires that an audit of the reported issues be carried out (Peters & Haslett 2011). With eminent thorough audit, companies will be afraid of misrepresenting facts. This will ensure that companies make records which are a true reflection of what is going on in the company. The people with interest in developing strong sustainability levels should be able to come up with watch dog organizations. There should also be training availed to companies regarding the best business conduct practices. Employees of companies should also come out and defend proper practices. They should act as whistle blowers whenever they witness improper ways of doing things in their work. This will ensure that irresponsible sustainability reporting is done away with forever.
References
Brink, A 2011, Corporate Governance and Business Ethics, Springer.
Christofi,A, Christofi, P & Sisaye, S 2012, Corporate sustainability: historical development and reporting practices,Vol.35,no.2
Donaldson, T 1982, Corporations and Morality, Prentice-Hall.
Peters, C& Haslett, SK, 2011, Education for sustainable development and global citizenship: An evaluation of the validity of the STAUNCH auditing tool,International Journal of Sustainability in Higher Education, Vol.12,no.2.
Olowokudejo, F, Aduloju, SA & Oke,SA 2011, Corporate social responsibility and organizational effectiveness of insurance companies in Nigeria, Vol 12, no.3
Razaee , Z 2008, Corporate Governance and Ethics,John Wiley & Sons.
Scaltegger,S, Bennet, M & Burrit, R 2006,Sustainability Accounting and Reporting, Springer.
Spitzeck, H 2009, The development of governance structures for corporate responsibility, Vol.9, no.4
Valenti, MA,Luce, R & Mayfield, C 2011,The effects of firm performance on corporate governance,Vol.34, no.3.
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