Corporate Sustainability Reporting
Summary of the corporate purpose of a Sustainability Report
The sustainability reporting is to measuring, disclosing and being accountable to both internal and external stakeholders for the progress of the organizations’ sustainable development towards the goal in a practice way. “Sustainability reporting’ is a board term that mix up with some other terms in describing economic, environmental and social impacts reporting. The reporting organization should be represent balance and reasonable from both positive and negative contribution in the sustainability reports. Sustainability reports based on the GRI Reporting Framework which shows the outcome and results of an organization’s commitment, strategy and management approach during the reporting period. The purposes of the report are:
* Analyze and evaluation the organization’s sustainability performance with respect to legal, norm, codes, performance standards and voluntary initiatives;
* Discuss and examine the organization’s sustainable development performance influence or being influenced by expectations; and
* Compare the sustainable development performance between different organizations.
All GRI reporting framework documents are looking for the consensus between stakeholders from different parties. The GRI Reporting Framework is trying to be a framework being accepted by the public which reporting on an organization’s economic, environmental and social performance. It is designed to suitable for all range of organizations. The general and sector-specific content of GRI Reporting Framework has become a generally accepted framework by a wide range of stakeholders from all over the world to report an organization’s sustainability performance.
The Term Paper on Sustainability Reporting
... make a global framework successful. In broad terms, the GRI Sustainability Reporting Guidelines recommend specific information related to environmental, social and economic performance. It is ... necessary to be considered generally accepted. Overall, the number of organizations reporting under GRI guidelines has grown exponentially since 2000. As of October ...
The Sustainability Reporting Guidelines include the principles for reporting content and make sure the quality of the reporting information. The standard disclosures made up of performance indicators, guidance on specific technical topic in reporting and some other disclosure items are also a part of Sustainability Reporting Guidelines.
Critique of Stakeholder Theory and Legitimacy Theory
Overview
In recent years, legitimacy theory and Stakeholder Theory are theoretical perspectives that have been adopted by many researchers. Both of them are referring to as ‘system oriented theories’. “…a system oriented view of organization and society…permit us to focus on the role of information and disclosure in the relationship between organization, The State, individual and groups (Grey, Owen& Adams, 1996).” System oriented theories is also referring to as ‘Open Systems Theories’. The use of open systems theories is “Open system theories have reconceptualized organizational boundaries as porous and problematic… Many dynamics in the organizational environment stem not from technological or material imperatives, but rather, from cultural norms, symbols, beliefs, and rituals. Corporate disclosure policies are considered to represent one important means by which management can influence external perceptions about their organizations (Suchman, 1995).” Legitimacy Theory and Stakeholders Theory are frequently applied to explain the corporate social responsibility in their annual report.
Legitimacy Theory
Legitimacy Theory attempt to ensure that their activities are perceived by external parties as being legitimate. Lindblom (1994) distinguishes between legitimacy which is considered to be status or condition, and legitimation which is considered to be the process that leads to an organization being adjudged legitimate. According to Lindblom, the legitimate is “a condition or status which exists when an entity’s value system is congruent with the value system of the larger social system of which the entity is a part. When a disparity actual or potential, exists between the two value systems, there is a threat to the entity’s legitimacy.”
The Research paper on Stakeholder Theory 2
Part A: Introduction – Organisation background Part B: Market Stakeholders for BIFF Sdn Bhd 1. Supplier 2. Customer 3. Employer Part C: Non Market Stakeholders for BIFF Sdn Bhd 1. Local Community 2. Media 3. Government Part D: Suggestion on how to develop and maintain the relationship with identified stakeholders 1. Have a direct dialog 2. Provide variety of monitoring method 3. Organise activity ...
A problem occurred for legitimacy theory in contributing to our understanding of accounting disclosure specifically. As a general theory, the theory term has been used loosely on occasion. The observation could be equally applied to a range of theories in a range of disciplines. Suchman (1995) has been identified that Failure to adequately specify the theory. He also found out that “Many researchers employ the term legitimacy, but few define it”. Another researcher, Hybels (1995) comment that “as the tradesmen of social science have groped to build elaborate theoretical structures with which to shelter their careers and disciplines, legitimation has been a blind man’s hammer”.
Stakeholder Theory
Stakeholder Theory has both ethical branch and positive branch. The moral or ethical perspective of Stakeholder Theory argues that the organization should treat all stakeholders fairly and stakeholders power are nor directly relevant. The impact of the organization on the life experiences of a stakeholder should be what determines the organization’s responsibilities to the stakeholders, rather than the extent of the stakeholder’s power over the organization. Hasnas(1998) says, the manager of a organization should benefit of all stakeholders no matter the stakeholder improve the organization’s financial performance.
There is a problem of Stakeholder Theory which is the organization should treat all stakeholder fairly. Within the ethical branch of Stakeholder Theory there is a view that stakeholders have intrinsic rights and should not be violated. Every stakeholder are tend to consider for its own sake and not only because of its ability to more interest of others. Stoney and Winstanley (2001), explain the basis of the ethical branch is “concern for the ethical treatment of stakeholders which may require that the economic motive of organizations- tobe profitable- be tempered to take account of the moral role of organizations and their enormous social effects on people’s lives.” According to the definition of stakeholder, there are many parties can be classified as stakeholders. The amount is too large to treat all stakeholders fairly. In additional, organization should treat all stakeholders fairly no matter the stakeholder is benefit for the organization. This may cause the waste of resources and a kind of chaos for organization’s managers.
The Essay on Stakeholder Theory
Before it was thought that business and ethics were an oxymoron, two terms that could never coexist together in our society, however this video on Stakeholder Theory has proven otherwise. The video talked about various ideas/topics concerning Stakeholder Theory from what is a stakeholder to the effects of technology in our fast paced society today. R. Edward Freeman started the video by explaining ...
The broader ethical perspective that all stakeholders have certain minimum rights that must be protected can be extended to a notion that all stakeholders also have a right to be provided with information about how the organization influence on them, even if they choose not to use the information, and even it they cannot have a directly critical impact on the organization.
Empirical Application of the two Theories
There are many literatures mentioned about the Legitimacy theory and stake holder theory applied in explain the motivators for corporate voluntary sustainability reporting practice. Faisal, Greg and Rusmin explore legitimacy theory practices in explaining the motivators for corporate voluntary sustainability reporting. Legitimacy theory says that the implicit social contract between the business entity and society is the legitimacy of a business entity to operate in society depends on. Breaching society’s norms and expectations may cause the company lose license to operate in the society. Legitimacy theory predicts that companies legitimize their operations when society’s norms and expectations of the business entities change or the business entities perceive themselves in breach of existing norms and expectations of society by adopting environmental and social responsibility reporting (Deegan 2002; Deegan & Blomquist 2006; O’Donovan 2002).
Deegan (2002) notes legitimacy theory is widely used to explain social and environmental reporting. Legitimacy theory relies on the notion that the legitimacy of a business entity to operate in society depends on an implicit social contract between the business entity and society (Guthrie & Parker 1989) and they will adopt disclosure strategies to conform to society’s expectations (Deegan, 2002).
The Term Paper on Karl Marx Class Society Social
Darwinism and Positivism highly impacted the world from the mid 19 th century through to the early 20 th century. It is primary to look at how these thoughts are evident within society by viewing the ideas of Auguste Comte (1798-1857), Charles Darwin (1809-1882), and Karl Marx (1818-1883). Because theatre can be depicted as a representation of life and society as we see it, playwrights from the ...
Comparison of Annual Report
Corporation Overview
Toyota Motor Corporation is a multinational corporation headquartered in Toyota City, Japan, and one of the world’s major producers of passenger cars. Toyota is the world’s largest automaker by sales, and is the second largest automaker in the United States by sales. Toyota also owns the Lexus and Scion brands, and has a majority shareholding stake in Daihatsu and Hino Motors. Toyota has also taken minority stakes in Fuji Heavy Industries (Subaru) and Isuzu Motors.
URL of Annual Report
http://www.toyota-global.com/investors/ir_library/annual/pdf/2011/ar11_e.pdf
Nissan is the third largest Japanese car makers and one of the top 10 in the world. It was acquired by Renault group in 1999 when it ran into financial trouble. Having recovered quickly under the leadership of Carlos Ghosn, Nissan is now stronger than the Renault. The Nissan Group consists of Nissan Motor Co., Ltd., subsidiaries, affiliates and other associated companies. Its main business includes sales and production of vehicles, forklifts, marine products and related parts. The Nissan Group also provides various services accompanying its main business, such as logistics and sales finance.
URL of Annual Report
http://www.nissan-global.com/EN/DOCUMENT/PDF/AR/2011/AR2011_E_All.pdf
Report Comparison
Both Nissan and Toyota is Japanese car manufacturing companies. In their annual and sustainability reports, there are some similarities and differences in vision, economics, environmental and social aspect. This part will compare two companies report.
The visions of two companies are similar. Nissan’s vision is “Enriching People’s Lives”. However, Toyota’s vision is “we want Toyota to be the company that customer choose and bring a smile to every customer who chose it.” From the vision, it shows two companies are focusing on provide customers a good experience of life. As car manufacturing companies, improving customers’ life experience is a primary target for them.
In the environment aspect, motor emission is a main cause of carbon emission. Two companies have a different reporting style of environmental sustainability. The Nissan is focusing on zero emission vehicles researching and some other technology to reduce carbon emission. Nissan’s environmental philosophy is “a Symbiosis of People, Vehicles and Nature”. It express the Nissan’s ideal of a sustainable mobility society. As part of this ideal, Nissan aims to be a sincere eco-innovator. For the sake of the planet and of generations to come, we work proactively and in good faith to address environmental challenges and to help reduce the real world environmental impact of our products. Nissan helps people to develop the sustainability via provide their products. Toyota’s report states: “Reduce environmental burdens through lift cycle by developing various eco-friendly vehicles and technologies and making them prevail.” In addition, Toyota is also trying to reduce carbon emission through conserve energy and reduce output of Carbon in manufacturing distribution and sales. Toyota provides their sustainability development progress in recent years that including increasing fuel efficiency, vehicle’s weight category, cumulative CO2 reduction, expanding PHV verification tests in Japan and Overseas, water consumption at vehicle manufacturing. However Nissan did not provides these statistic data. But they provide some global emission data in the industry. At last both of them provide information about their environmental management.
The Essay on Social Traps And Environmental Policy
Social Traps and Environmental Policy (1) In his article Social Traps and Environmental Policy Robert Costanza, provides us with the insight on what represents the essence of social traps and discusses the ways of how they can be avoided. According to author, social trap is: Situation in which the short-run, local reinforcements guiding individual behavior are inconsistent with long-run, global ...
For economic contribution, Nissan states “By achieving sustainable, profitable growth for it, Nissan hopes to contribute to the economic development of society as a whole.” Nissan is trying to improve its profitability and corporate value via creating corporate economic value and speedy, accurate information disclosure. They have put these in to their business plan. Toward this end, they aim to maintain top-level performance in the global automotive market and to build a foundation for highly profitable business into the future. They also focus on speedily and accurately providing information on how to implement their strategies, vision and management plans to the shareholders, investors and other stakeholders.
The social contributions of two companies also have some similarities and differences. The key point of Toyota’s social contribute is “nurture human resources and enhance the cultural life of our host communities”. They work towards creating a harmonious, self-sustaining society where a diverse range of people respect one another and work together, by assisting with local social contribution projects, supporting welfare services, encouraging self-reliance and other initiatives. Toyota divided their social contribution into 4 parts: environment, education, society and cultures. However, Nissan’s social contribution is focus on driving safety. Nissan aims to create cars that embody the “pleasure and richness of driving” while prioritizing customers’ peace of mind through the pursuit of a high level of real-world safety. Nissan help people reducing traffic from both automobile and traffic environment. To help contribute to the realization of a truly safe society, Nissan uses a triple-layered approach, taking measures in the areas of vehicles, individuals and society.
The Essay on Social Media Usage And Relationships
Social media usage has skyrocketed in the United States as a major form of communication between individuals and groups. Specifically, the number of Facebook users in the United States in 2012 was 163,071,460; this is 52. 56% of the total population, making the United States the country with the highest usage (Social Bakers, 2013). A concern is growing regarding the effect that social media has on ...
Legitimacy Managing
As asserted by legitimacy theory, organizations are pursuing for activities that are within “the norms and bounds of their respective societies” (Deegan & Unerman, 2006, P. 217).
However, these norms and bounds are changing all the time and this requires firms keep pace with the moral environment in which they operate. Some researches indicated that the public disclosure of social and environmental information, such as through annual reports, is for legitimizing purpose. Legitimacy theory relies on the notion that there is a “social contract” between organization and the society in which it operates. (Deegan & Unerman, 2006, P. 217) Both two companies state their relationship with social relationships in their reports. In Toyota’s sustainability report, it spends a lot words to state relationship between and Toyota and Global Society/Local Communities from environment, future of mobility and social contribution. However, in Nissan’s sustainability report, they presented the Nissan’s environmental contribution, safety, quality, economic contribution and value chain to reflect the Nissan’s social legitimacy.
About stakeholders, both companies present and analyzed the relationship with stakeholders. Toyota’s report divided them into different stakeholder parties. It analyzed the relationship between Toyota and Customers from safety and quality aspect. It also talked about the relationship between Toyota and employees, business partners and shareholders. Nissan’s report mixed the stakeholder with the social contributions. As the report talk about the social contributions, it also mentioned the relationship between Nissan and stakeholders from safety and quality aspect.
