Sustainability reporting is one where organizations give comprehensive report regarding the economic state, social status and environmental state of their organizations. It has come to the interests of all stakeholders that environment should not be left out during organizational reporting. This is because every organization has a crucial role to play in ensuring that the environment is a haven for all to live in and enjoy a friendly natural environment (Albrecht, Burandt, & Schaltegger, 2007).
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In addition, organizations must report detailing their strategies aimed at ensuring that they survive in their business for long. This means that their long term goals must be explained and clear in the report. Therefore, everyone has a duty of ensuring that the environment is kept safe and protected from hazardous activities that may lead to its disintegration. This means that the environment must be protected, and organization must show what they are doing to improve the natural conditions of the environment surrounding them.
According to writers Loannis Loannou and George Serafeim, corporate organizations should give non-financial information to their stake holders (Docherty, 2009, p.56). They argued that this helps in strengthening the relationship and stakeholders develop more confidence in the organizations.
This is because organizations report to their stakeholders on what their governance entails. Also, their corporate social responsibility activities are outlined clearly in sustainability reporting. In fact, many stakeholders do not understand what the balance sheets and other financial documents mean but when given a breakdown of organizations governance makes much sense.
Therefore, these writers believe that organizations are going for sustainability reporting mainly to retain their trust to stakeholders. This form of reporting creates a scenario where organizations interact with their stakeholders hence giving them a sense of belonging as far as the organization is concerned.
This means that the organization explains to its stakeholders what it does to the community and the stakeholders get a chance to verify the information as they are members of the society. If the organization gives incorrect information about their corporate social responsibility and roles they play to the environment, the stakeholders can protest in reaction.
Loannis and George Serafeim believed that sustainability reporting was aimed at promoting transparency whereby the stakeholders will have to understand an organization’s commitment to social aspects, such as providing excellent working conditions to its workers. Furthermore, organizations welcome feedbacks from their stakeholders after sustainability reporting and this promotes working relation (Beloff, Lines and Tanzil, 2005, p.76).
The aim of this form of reporting is disclosing to their stakeholders their efforts of building and smoothening relationships with other parties in their surrounding environments. These include efforts to develop and maintain a channel for discussing their long term risks also to protect their reputation to the world.
Barry Salzburg believed that organizations are adopting this form of reporting in order to build trust among its stakeholders. He too feels that when organization disclose additional information to their stakeholders. He argues that sustainability reporting has motivated many managers to work hard as they do not want to let down their stakeholders (G8 Summit, 2007).
This is because they accept their responsibilities in the organization and struggle to make sure they deliver all promises besides achieving their organizational goals. Barry Salzburg is of the opinion that organizations have a common aim of building a sustainable society that will be answerable to its stakeholders at all times. He says that organizations are adopting this form of presenting their reports because it has become a requirement by law in many countries (Docherty, 2009, p.56).
Organizations are approaching the planning and implementation of sustainability in various positive ways. First of all corporate organizations has accepted that in order to achieve their primary goals of maximizing shareholders equity and profits, they must adhere to the regulatory obligations.
This is why they plan on how to involve the community around them in decision making process, and assist them as much as possible. Companies are working to ensure that they are represented in several aspects in the society. For example, organizations are being represented in political debates hence making them properly represented in matters of national governance.
This has been instigated by the fact that organizations learnt that solely aiming at economic growth is unsustainable. Therefore, they realized the sense of taking active roles involving the state, communities and companies. This shows evidence why organizations cannot shine in its economical operations without taking into considerations its social cohesion and environmental sustainability.
In social cohesion, organizations are expected to foster excellent relations with other organizations surrounding it. In fact, organization s that are in constant conflicts with others tend to face difficulties in achieving its goals as a lot of time and resources are wasted in law suits (Tickner, 2005). Environmental sustainability is vital for organizations because it explains how well organizations respect their surrounding environment for the sake of future generations.
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Organizations have based their plans on the corporate social responsibilities, as they have established rules and guidelines detailing how they should relate with the external environment. External environment in this case refers to the society living in the locality of the organization (Moreira, 2010, p.98).
They also base their plans on ethical standards whereby the management is expected to work addressing expectations of the stakeholders. Corporate governance is another crucial factor organizations look into when designing how to carry out the corporate sustainability. This is because corporate governance addresses legal responsibilities of organizations hence forming a concrete foundation for sustainability reporting process.
Both the Australian Red Cross and the Salvation Army have adopted sustainability reporting through being involved in community based projects such as helping the elderly (G8 Summit, 2007). Both organizations are committed to making sure that community is empowered in many ways hence eliminating poverty.
This helps in uplifting lifestyles of people hence enhancing proper working rapport between the organizations and the local community. This means that the community gains and maintains confidence in the organizations hence entrusting them with their society. For example, the Red Cross is credited and people have trust in them, and whatever they do without taking sides at any time (Geraghty, 2010).
In cases of war, the Red Cross assists the injured regardless of their side and this makes their work easy and secure. If their credibility was questionable, organizations cannot be trusted by warring parties and their personnel would be attacked in the course of rescuing those injured.
For the Salvation Army, they take charge in ensuring that children and women get recognized in the community and awarded their rights. They extend their mandate to the social class regardless of their denomination by training personnel to talk to people on issues touching their lifestyles.
Both organizations extend their mandate from Australia to other neighboring to ensure that people get vital help in regards to heath and freedom. Freedom in this case is supposed to mean that people women and children are freed from poverty by being empowered. In fact, the Salvation Army provides home for the poor and homeless hence returning a sense of belonging to those unfortunate in the society.
In comparison, Australian Red Cross and Salvation Army deal with people with people who required much help for their survival. In this case, both organizations present their sustainability reports voluntarily since they are nonprofit making organizations. Both collect information from the ground since they deal with individuals directly.
This means that their data collection is part of their records keeping. This is because they work with thorough recording for easy funding by their stakeholders and other donors. Both organizations present their reports to the public through the internet as it is vital for all to see how these organizations are performing. They both allow for feedbacks from their audience as this helps them in restructuring their previous mistakes hence straightening their future activities (KPMG International, 2008).
In contrast, the Red Cross has more developed system of sustainability reporting than the Salvation Army since they are more represented in community based activities.
This means that the Red Cross has more links to the external community than the Salvation Army. When it comes to data collection, the Red Cross has advanced sources because it records firsthand information of some cases that are later on addressed by the Salvation Army (Geraghty, 2010). For example, in case of a war the Red Cross is on the ground during the war while the Salvation Army comes in to help those affected after the war.
It is advisable for organizations to adopt sustainability reporting because it promotes communication between all stakeholders and the company. In fact, both the Australian Red Cross and the Australian Salvation Army are adopting sustainability reporting.
The aim of adopting this system is to promote transparency in activities of organizations because they explain their contribution to the society and to the environment. All stakeholders and beneficiaries of these organizations learn about their deeds from information made available on the internet for public to read. These two organizations publish their reports on their website for the public to access. Therefore, the world is moving in the right direction by organizations adopting a system of sustainability reporting.
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