Operates highly dynamic and complex business environment

MAH053138

Answer 1:

The key drivers of the sustainability reporting includes regulatory pressure, change of mindset of customers, emerging concept of corporate citizen creating pressure on corporation to create credible sustainable report and increasing awareness amongst the stakeholders.

Sustainability reporting is becoming more prevalent, driven by a growing recognition that sustainability related issues can materially affect a company’s performance; demands from various stakeholder groups for increased levels of transparency and disclosure; and the need for companies to appropriately respond to issues of sustainable development.

The fundamental objective of integrated reporting is to ensure availability of financial and sustainability data in one single report.

The Integrated Reporting ensures the availability of quality information to providers of capital and other stakeholders.

The fundamental aspect of value is based on the concept of management’s objective of value creation for shareholders. According to IIRC framework for integrated reporting the ability of business organisation to create value for its self is depended on the extent to which it creates value for other stakeholders. This clearly indicates that the management will not be able to create value if its operation harms the stakeholders. Hence the value creation is the process that linked with sustainable development.

The new framework developed by the organisation requires the organisation to present the data in a manner that suggest value creation by organisation in long, short and medium term.

The new reporting framework specifies the contents to be included in integrated report which includes financial data, material information regarding sustainability aspect, stakeholder inclusiveness and environmental aspect. It aim is to develop and promulgate IR, which it promotes as being ‘communication about businesses’ value creation’ and ‘the next step in the evolution of corporate reporting’.

According to capture theory, the management is required to identify the value captured to adherence of sustainable standards. Accordingly the management needs to allocate share of sustainable framework in total value creation.

Question 2 A:

The Sustainability Reporting put more emphasis on the concept of stakeholder. According to this concept the sustainability reporting must be done keeping in mind overall interest of stakeholders. The reporting framework was developed keeping in mind the needs and expectation of all stakeholders.

According to IIRC report prepared in 2013, the disclosure made via integrated reporting puts emphasis on required for decision making purpose. Listed company often tries to include the economic aspect and impact more while preparing sustainability reporting. This is because company wants to keep happy the providers of capital and needs to serve them all disclosure as per their requirement.

According to stakeholders’ theory, the organisation needs to manage its business affairs in the interest of stakeholder. The stakeholders of the business include any person or organisation that is affected by business operation either positively or negatively. In general stakeholders of the business include shareholders, customers, investors, suppliers, government, and competitors.

Answer 2 B:

The sustainable growth of the business indicates its growth in terms of value creation for its own, society and environment. The concept of sustainability is concern with analysis of impact of business operation over society, economy, and environment. The management is required to measure the impact of business operation over society, environment and economy. The concern for sustainability is more important for the overall growth of the organisation. The management is required to create value for society as well as for organisation. According to IIRC, the value creation process is combined process and hence the management creates the value for organisation only if it successfully creates value for society. Hence the value creation for organisation is depended upon value creation for society.

The concepts of environmental and economic sustainability have been addressed in much greater depth than has social sustainability.

In most of case it has been evidenced that the organisation is paying more attention towards creation of value for organisation rather than value for society.

KPMG, What does an Integrated Report look like. (2012). 1st ed. [ebook] Available at: https://home.kpmg.com/content/dam/kpmg/pdf/2013/04/what-does-ir-look-like.pdf [Accessed 29 May 2016].

Deloitte, The new International Integrated Reporting Framework. (2014). 1st ed. [ebook] Available at: http://www2.deloitte.com/content/dam/Deloitte/za/Documents/governance-risk-compliance/ZA_International_Integrated_Reporting_Framework.pdf [Accessed 29 May 2016].

http://ijbssnet.com/journals/Vol_5_No_10_September_2014/8.pdf

Terry Wales, 2013, ORGANIZATIONAL SUSTAINABILITY: WHAT IS IT, AND WHY DOES IT MATTER?, Review of Enterprise and Management Studies, Vol. 1, No.1,