Bulletin

Issue: March/April 2007

News

Corporate sustainability planning

A study into corporate responsibility has revealed a lack of knowledge about how ‘sustainability goals’ and ‘best practice’ can be integrated into strategic planning.

Led by La Trobe University Professor of Accounting, Carol Adams, it was carried out over several months in a water company and will be published later this year in the international Accounting Auditing and Accountability Journal. The research examined issues companies face in preparing ‘sustainability’ or ‘responsibility’ reports. It was conducted with Dr Patty McNicholas from Monash University.

Professor Adams said the academicbusiness partnership which made this study possible had a twofold purpose - and achieved a positive outcome for the organisation involved.

Her research team helped the water company develop a sustainability report and integrate those issues into decision making to improve sustainability performance. ‘And we gained insights into how the process of preparing a sustainability report can lead to improved performance and the hurdles faced by organisations in doing so.’

Apart from insufficient knowledge about how to integrate sustainability goals and practice into strategic planning, the researchers found other impediments included lack of experience in engaging stakeholders in the reporting process; difficulty in choosing between reporting guidelines; and confusion between financial and economic indicators relating to sustainability.

Professor Adams said pressures for greater corporate responsibility and sustainability in the water company were being driven by the State as owner, the CEO and managers.

‘There is also the role of the water industry itself in promoting sustainability reporting, the reporting team coordinator’s role on the industry sustainability task force, as well as competition from other water companies.’

Professor Adams carried out a joint study last year into sustainability reporting by 200 UK and Australian firms. It found that more than two thirds of companies in Australia provided no quantified data on performance or identifed specific targets for these areas.

She said the long-term survival and international competitiveness of Australian companies depended on their ability to limit social and environmental risks, attract and retain the best employees and build trust in their relationships with stakeholders.

‘To do this, they need to be aware of their social and environmental impacts so that they can act on them.’