Sustainability reporting is an annual report of a company which indicates non-financial information including environment, economy and society to the public and shareholders. Companies increasingly put more emphasis on sustainability reporting at present and face the problem of how to make effective reports of sustainability. Then in order to find and solve the problem of companies’ sustainability reporting, several standards such as Global Reporting Initiative (GRI) are used to check the quality of the report for sustainability. This report illustrates the reasons why companies make reporting for sustainability, how to make the report to be well-written and finally appraises 2011 sustainability reporting of Wesfarmers, a food processing company.
2. Reasons for company to make reporting for sustainability 3.1 Improvement of companies’ non-financial performance and the sense of social responsibility The reports of sustainability can urge companies to make effort to be sustainable. It means that companies will improve the non-financial performance and the sense of social responsibility by sustainable reporting. After analyzing the data, the companies which make sustainability reporting improve their ranking of social responsibility by 8％ more than the companies which lack of sustainability reporting (Blanding 2011, p.5).
3.2 Benefits to environment, economy and society
Sustainability reporting highlights what a company does to keep environment， economy and society balance. Hence adding non-financial information in a company’s annual report makes sure the company to do right thing to benefit all the three aspects. For example, because of sustainability reporting, company will take climate change into consideration instead of considering the profits only (Steidl 2010, p.39). In additional, an effective sustainability reporting can help companies to achieve high reputation in the society and then create more shareholders’ wealth (Borkowski et al 2010, p.32).
3. Key features of Sustainability Report
4.3 Report Content
In food processing industry, the information in sustainability reporting needs to be chosen which is relevant to sustainability and stakeholders’ decision in different aspect. It is means that the content of sustainability reporting needs to include the influence of companies’ activities to environment, economy as well as society. Due to the requirement of the GRI guidelines (GRI, 2006, p.1), companies can check if their sustainability report content illustrates the impact on environment, society and economy or stakeholders (Flynn 2009, p.15). Moreover, the information needs to be made sure that is useful, relevant and comparable for appraising strategic organizational performance (Hubbard 2011, p.4).
Completeness of sustainability reporting is to make sure the information in the report is complete, covering all the aspects of company’s sustainability. It includes not only the relevant information of the sustainable impacts, but also the information that can make stakeholders to evaluate the performance of the reporting organization. However, there are many companies only focus on the environmental issue at present, which makes the sustainability reporting incomplete (Gray & Milne 2002, p.67).
4.4 Report Quality
Balance is one of the most important key factors to make an effective sustainability reporting. Keeping the report balance is to expose both good news and bad news of companies’ sustainability so that audience and stakeholders can have correct and fair evaluation about companies’ sustainable performance. Parker (2010, p35) points out that a short balanced sustainability report is better than a long report which shares the positive aspects only. Moreover, if a sustainability reporting only has good news to indicate, it is a dishonest report which does not tell the...