Corporate Governance & Social Responsibility Wesfarmers Limited

Question: Describe about the Report for Corporate Governance Social Responsibility of Wesfarmers Limited. Answer: Part A In this paper we prepare the internal report of Wesfarmers limited. In this report we compare the sustainability report of 2014 with the sustainability report of 2015. Wesfarmers limited was one the biggest listed companies in Australia, and its headquarter was established in Western Australia (Wesfarmers, n.d.). Wesfarmers have diversified portfolio of business operations which includes, supermarkets, liquor, hotels, convenience stores, items related to home improvement, products related to office supplies, department stores, and business related to chemicals, energy and fertilizers, coal (Wesfarmers, n.d.). This internal report was prepared by following the G4 GRI guidelines. These guidelines provide principles, standards and manual in which sustainable report is prepared by the organizations of every size. These guidelines also provide standards at international level for all those organizations which want to disclose the matter related to governance approach. In this report consider the three areas provided by G4 GRI guidelines that are environment, economic and social (GRI, n.d.). Wesfarmers Comparison: ASPECT 2014 2015 CONCLUSION Economic In 2014, Company supports community partnerships. In direct way company contributes almost 44.6 million dollars in community partnerships, and through indirect way company contributes almost 50.8 million dollars. Company also supports arts companies in Australia at higher level. In 2015 company, paid $43045 million to its suppliers, $7,830 million to its employees, $1578 million as taxes, and $ 2246 million to its shareholders as dividend. Company also supports community partnerships. Company usually supports contribution in four major areas such as health program, indigenous programs, education programs, and also Wesfarmers arts programs. In 2015 company directly contributes almost $ 50 million to the community partnerships. Company also facilitated direct donations of $52.7 million (Wesfarmers, 2015). The Wesfarmers art programs support the other art companies in Australia. Wesfarmers Arts programs $2.2 million to the arts program in this year (Wesfarmers, 2015). After comparing the economic aspects of both the years it was clearly shown in the table that in 2015 company supports community partnership more than the support provided in 2015. Directly company support at excess of 5.4 million dollar and indirectly this support was increased by 2.9 million dollars. It was also shown that in 2015 companies employees exclusively participate in the art activity. Environment Company tries to emit green house gas at both direct and indirect level. Directly they emit gas through their industrial business, use of natural gases and many more. Company emit gas indirectly also and their main way of gas emission through indirect way was electricity. In 2014 Greenhouse gas emission was almost 4047 tones. After assessing the risk on climate, company focus on two approaches. First they manage their own green house gas emissions and also focus on reducing that gas. Second they assess those risks which were created due to change in the climate try to manage those risks (Wesfarmers, 2015). On 17th September 2015 number of companies like Wesfarmers, AGL, BHP Billiton, GE, Mirvac, Santos, etc. signs a statement in which they are supporting Australian government practices for climate change (Wesfarmers, 2015). In 2015, greenhouse gas emission was 4012 tones. In 2014 company emit 4047 tones gas through direct and indirect source, whereas in 2015 company emits only 4012 tones only. It was clearly shown that in 2014 company emits more gas than in 2015. In 2015 company emerge more gas in comparison of 2014. Social Labor Practices and Decent Work: company specially focus on the development of indigenous groups and provide equal opportunity to them. In 2014 company employed almost 1711 employees (Wesfarmers, 2015). Lets talk about the safety environment at workplace. In 2014, injury rates are 42.7% in all over the year. Human Rights: company always conduct audits to ensure that company is not violating any human rights in its supply chains, and company always take measures to identify the risk related to violation of human rights. Society: From 2013 Australian Food and Grocery Council develop a standard named as Cole. Company does not adopt this standard till now. Board and management think on the adoption of this standard. Product Responsibility: In 2014 company stopped selling a video game named as Grand Theft Auto 5 (GTA5) after receiving number of customer concerns. Customer found this game inappropriate for society because in this game there was violence against women. It was assumed that customer find it oppressive. Labor Practices and Decent Work: company hires almost 1 Australian in 59 working Australian. Wesfarmers distribute 59% of its revenue among their employees through wages, salaries. Wesfarmers hire people without discrimination. They provide employment chances to people of every age, cast, color, and sex (Wesfarmers, 2015). Wesfarmers employees relations are controlled by collective agreements. These agreements cover almost 85% employees in Wesfarmers. In these agreements company recognize the rights of their employees at both individual and collective level, without the interference of third parties. Wesfarmers always put safety at workplace on highest priorities. Company always takes initiatives to reduce the injuries. In 2015 injuries rates 39.5% which are low compared to previous years. In 2015 lost time injury rates are 7.3% only. (Wesfarmers, 2015). In case of indigenous groups the primary focus of the company was employment distribution. At 30th June 2015 Company employed almost 2762 indigenous team members. These members almost represent 1.4% workforce of company. This was 61% increase from the last year. Human Rights: Wesfarmers knows well that violation of human rights affect their supply chains, and they also identify such risk. They also take measure steps to address these risks. In 2015 company approved almost 2139 factories in their ethical audit program, and 150 factories are approved for re audit. This year company finds almost 39 issues of human rights violations (Wesfarmers, 2015). Society: ASX sets out many corporate governance principles and recommendations which were adopted by the board and management of the company. Board also ensures that the company follows the governance standards mention in third edition of the ASX principles (Wesfarmers, 2015). From 2013 Australian Food and Grocery Council develop a standard named as Cole. In July 2015 company adopts this standard (Wesfarmers, 2015). Product Responsibility: Company must ensure that the products they are supplying are safe and secure as per the guidelines provided under Australian Consumer Law. In April 2015, Target withdraws branded items related to Anzac from its Camp Gallipoli, when government announced them inappropriate for public (Wesfarmers, 2015). Labor Practices and Decent Work: in this area it is clearly mention that company hires 61% more indigenous employees in comparison to 2014. In 2014 company hire only 1711 employees and in 2015 it hire almost 2726 employees which was more than year 2014. Human Rights: In 2015, company approved 2139 factories which are following ethic standards carefully and 1500 factories are targeted for re-audit. Society: In 2015 company adopts the standard developed by the Australian Food and Grocery Council, named as Cole. This standard was developed in 2013. It was a major step taken by the company in the favor of the society. Product Responsibility: In 2014 company stopped selling a video game named as Grand Theft Auto 5 (GTA5) after receiving number of customer concerns, and in 2015 company withdraws all the items related to this game from market. This was encouraging action of company in ensuring the product quality produced by company. In last, we conclude that company follow all the G4 GRI guidelines and make sure that they meet all the standards provided by GRI guidelines. After assessing the sustainability report of the Wesfarmers, it was found that company prepares the report in very good manner and it is easy to understand the report. Yes, report was verified and it is verified by the management and board of directors of the company. In this report company cover all the aspects of the GRI guidelines. It must be advised that the points related to social aspect needs more detailing in the sustainability report. Part B Fuji Xerox Australia Pty Limited is a leading company at global level, and engaged in the business and document management services. Company also provides back office support, so that customers can focus on their business. Company also focus on sustainability, and ensures that their customers fulfill their business objectives. Fuji Xerox Australia Pty Limited is affiliated with Fuji Xerox Co Ltd, which is established in Japan (Fuji Xerox, n.d.). In part B we prepare the internal report of Fuji Xerox Australia Pty Limited on the basis of sustainability report of the company. Fuji Xerox comparison: In sustainability report of 2014 company used G4 GRI guidelines for prepare their sustainability report, but in 2015 company prepare report not only on the basis of G4 GRI guidelines but also take reference from guidelines of the Ministry of Environment and UN Global Compact (Fuji Xerox, 2014, n.d.) . In both the reports different approaches are used by the company, in 2014 company issue sustainability report in which company follow G4 GRI guidelines to prepare the report. In 2014 company disclose both General standards Specific standards. In General Standards Disclosure Company describe strategy and analysis, profile of the company, material aspects, engagement of stakeholder in company and practices related to ethics and governance. In specific standard company cover all the areas such as economic, environment and social. In 2015 company prepare report by taking reference from three types of guidelines, which are described below: GRI Guidelines: in this company follow both General Standards Disclosures and Specific Standards Disclosure. Guidelines of the Ministry of Environment: in this company follow the various principles such as Environmental policies, business strategies, corporate governance matters, environmental initiatives in the value chain, and how company resolve the issues of stakeholders. UN Global Compact: In this company mainly focus on four categories that are Human Rights, Anti-Corruption, Environment and Labor (Fuji Xerox, n.d.). Comparison between sustainability report of 2014 and 2015: ASPECT 2014 2015 CONCLUSION G4 GRI guidelines In this company follow both general and specific standards. General standards- these standards are described by the company from G4-1 to G4-56. In these standards company disclose the general information about the management and operations of the company. Specific Standards- In this company cover all the three areas: Economic- in 2013-14 company processed it last stage of transforming their resources related to business which includes regional Oracle systems environment. In 2014-15 company integrate the oracle module with support system. Environment- company seeks their suppliers so that they can follow sustainability policies for conducting their business operations. In 2013-14 company reports that almost 57.3% of procurement expenditure that is almost equal to AU$ 580 million was incurred on equipment supplies and consumable equipments (Fuji Xerox, 2014). Social- According to company every individual has right to work in the healthy and safe environment. In 2013-14 company formed a strategy in which they develop roles of women in middle management, and company also employ new talent in womens. other actions taken by company in 2013-14 are: Company introduced parental leave for 12 weeks which are paid to the employees. Also frame new work policies for the 2014-15. Company follows both general and specific standards. General standards- These standards are described by the company from G4-1 to G4-58. In this company cover all the general aspects which relate to management, ethics, corporate governance and many more. Specific Standards- In this company describe these four areas: Economic- Company supports the education system at high level and this can be show from the various efforts made by Fuji Xerox, and support provided by the company in the education sector. Company engaged with the local communities to increase the quality of education sector. In 2014-15 company established Tono Mirai Zukuri College (Fuji Xerox, 2015). Environment- Fuji Xerox strictly follows the environment principles in their product life cycle. Company start many policies over the year in which they greatly emphasis on environment protection. In 2014-15 company framed chemical substance management system (Fuji Xerox, 2015). Social- in this company mainly focuses on labor policies and relationship with employees. In this company also cares for the safety of employees. This can be shown from the injury rates and working hours of the company (Fuji Xerox, 2015; Fuji Xerox, 2015). In 2014 company follow all the aspects of social standards defined in specific disclosure, but in 2015 sustainability report they do not provide all the aspects of social standards. Company only focuses on the labor and employee relations. In 2014, company not deeply describes the economic sector, and in 2015 company deeply describes the various sectors and aspects of economy well in its report. Guidelines of the Ministry of Environment - In this company address the following principles (Fuji Xerox, 2015): 1. Environmental policies, visions, and business strategies- in this company and its affiliates work and believe on the two concepts that is green policy and shared values (Fuji Xerox, 2015). 2. Status of organizational systems and governance- in this company give great emphasis on risk management policy (Fuji Xerox, 2015). 3. Responsiveness of stakeholder issues- company develops many policies to resolve the queries of shareholders (Fuji Xerox, 2015). 4. Environmental initiatives in the value chain- company not only develop business related terms with suppliers but they are also developing CSR with their suppliers. In this company use the ministry of environment guidelines in 2015 only. In 2014 company not follow these guidelines. In 2014 sustainability report company does not describe any matter related to green policy and shared values which was co-concept of Fuji Xerox and its affiliated. UN Global Compact - In this company follow the various principles which relates with human rights, environment, anti-corruption and labor (Fuji Xerox, 2015). In this company use the UN Global Compact guidelines in 2015 only. In 2014 company not follow these guidelines. Part C In this we conclude the internal reports of both the companies that are Wesfarmers Limited and Fuji Xerox Australia Pty Ltd: Wesfarmers Limited: in this company follow the G4 GRI guidelines to prepare the sustainability report of both the years that is 2014 and 2015. In this we conclude that company follows all the standards of the GRI guidelines and company also improve its performance in every sector whether it is economic, environment and social. We can understand this with the help of the example, such as injury rates are declining every year which shows company focus on safety at workplace. In 2014 injury rate was 5.0 and in 2015 injury rate was declining and reach to 4.2. It was also shown that in 2014 rates of workmen compensation claims are 13 and in 2015 it was reduced by 2 and reach at the level of 13. In the economic area company was improving such as community partnership was more in 2015 as compared to 2014. Company always tries to support its local communities for development. We can also see the improvement in the social aspect. If we look at the green house gas emission, it was shown in the report that in 2014 gas emission was 627 kilotons, and in 2015 it was 869 kilotons. We can also take the example of energy used by the company. In 2014 company use 4.59 PETAJOULS and in 2015 this was increased up to 5.11 PETAJOULS. It is clearly shown that company done its best efforts to improve the environment and work in the right direction. In this we conclude that company was put it efforts in the right direction but there are some aspects in which it is necessary that company works (Wesfarmers resources, 2015). In the internal report of Wesfarmers limited every aspect related to guidelines are clearly mention and company provide every detail which was supported by the facts and figures. It was also shown that company starts many new policies which are in the direction of sustainability development. Fuji Xerox Australia Pty Ltd: in this companies use different guidelines to prepare the sustainability report of 2015 that is G4 GRI guidelines, guidelines of the Ministry of Environment and UN Global Compact. In 2014, company use only G4 GRI guidelines to prepare the sustainability report. It was clearly shown that in both years company use very different approaches to prepare the reports. In 2014 company use only single guideline but in 2015 company use almost three types of guidelines to prepare the report. It was shown that in 2015 company describe every aspect of the report very deeply. In both the years company use different approaches to prepare the report, some factors used by the company are: In 2014 company disclose both General standards Specific standards. In General Standards Disclosure Company describe strategy and analysis, profile of the company, material aspects, engagement of stakeholder in company and practices related to ethics and governance. In specific standard company cover all the areas such as economic, environment and social. In 2015 company prepare report by taking reference from three types of guidelines that is GRI Guidelines: in this company follow both General Standards Disclosures and Specific Standards Disclosure. Second, Guidelines of the Ministry of Environment: in this company follow the various principles such as Environmental policies, business strategies, corporate governance matters, environmental initiatives in the value chain, and how company resolve the issues of stakeholders. UN Global Compact: In this company mainly focus on four categories that are Human Rights, Anti-Corruption, Environment and Labor. In this report, we conclude that company does not properly define all its policies and initiatives in sustainability report. In 2015, report company only focus on the labor and employees relationship, and does not mention any facts which relate with the other aspects of social category. Therefore, we can say that there are some flaws in the report of the company. Part D Reflective journal of personal development: after completing the two assessment task, I have considered the importance of ethics, corporate governance, and sustainability development of an organization. There are various benefits of sustainability development such as it increases the reputation of an organization and profitability of an organization in the long run. Through the assessment of these principles we can easily meet the expectations of employees and provide them better place for working. This is not yet organizations can easily access the capital because, investors can trust the organization which provides such transparency to them. Sustainability reporting is important for environment also which reduce the waste and help in developing the environment. it helps the company in increasing their efforts for waste reduction, and also help to companies to adopt such policies and procedures which effect the environment at low level. Sustainability reporting requires companies to gather information about processes and impacts that they may not have measured before. This new data, in addition to creating greater transparency about firm performance, can provide firms with knowledge necessary to reduce their use of natural resources, increase efficiency and improve their operational performance (Sustainability Development Charter, n.d.). In this it is easy to understand and apply the concept of corporate governance. Corporate governance was very important aspect of sustainability reporting. In modern era it is necessary for companies to survive in long run for that it is necessary, they follow the principles of corporate governance. Following are the principles of corporate governance which are described by the ASX, and these principles apply on all the entities which are listed on ASX: Principle 1: Lay solid foundations for management and oversight Principle 2: Structure the board to add value Principle 3: Act ethically and responsibly Principle 4: Safeguard integrity in corporate reporting Principle 5: Make timely and balanced disclosure Principle 6: Respect the rights of security holders Principle 7: Recognize and manage risk Principle 8: Remunerate fairly and responsibly (ASX, n.d.) These principles ensure that companies follow the good governance, and meet the expectations of the investors. These principles not only help the management in managing their business operations but, also safeguard the investors of the company. These principles mainly focus on the disclosure of information by the companies, and also enhance the transparency between the government, company and investors, in last we can say that sustainability reporting and corporate governance plays an important role in the business operations of the company. After completing this assignment it was clear in my mind the importance of sustainability reporting, ethics, employee relations and corporate governance. It was clearly shown that company cannot work for long time after ignoring these important terms. Conclusion: In this assignment, we compare the sustainability report of Wesfarmers Limited and Fuji Xerox Australia Pty Ltd. First we compare the sustainability report of last two years of each company, and then we compare the reports of abovementioned companies with each other. In Wesfarmers Limited, company follows the G4 GRI guidelines to prepare the sustainability report of both the years that is 2014 and 2015. In this we recommend that company must improve its performance in the sector of social aspect, because in last company earn from society and it must return to the society. In Fuji Xerox Australia Pty Ltd, company use different guidelines to prepare the sustainability report of 2015 that is G4 GRI guidelines, guidelines of the Ministry of Environment and UN Global Compact. In this company is lacking in following all the guidelines, and company does not properly define all its policies and initiatives in sustainability report. There are many flaws in the report of the company. In this w e recommend that company must focus on other aspects of social policy also, because in 2015 company only focus on the labor and employees relationship, and does not mention any facts which relate with the other aspects of social category. References: Wesfarmers. 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