In any business activity, the core objective is to make profit. Every individual and business organization always aims at maximizing the profit. This, however, comes with a series of sacrifices and consequences. Have you ever wondered why an individual may have so much money yet he leads a miserable life? Or why a business venture may be quite profitable and yet considered unfit? These questions depict that, in any venture, there is more than meets the eye: more than the profit.
With the continued increase in human population, more pressure is put on the scarce resources; and without proper management of these resources, a doom is spelt. Several issues arise as individuals, companies, industries and other business organizations try to satisfy their needs. This essay highlights the current issues in accounting. Two organizations are considered here: the WESTPAC Group and the CALTEX. In the analysis, the Corporate and Social Responsibilities of these companies are considered. These two companies have almost similar structures and membership. They also contribute almost similarly to environmental impacts.
In the Corporate Responsibility of a company, we look at how the economic, social and environmental impacts of the activities of the company are managed and balanced. It is all about the assessment and management of risks, pursuing opportunities and creating corporate values. It also entails the approaches taken in considering the rightful interests of the company’s stakeholders.
The contemporary issues considered under the two companies, WESTPAC Group and Caltex includes Corporate Governance, risk management, values and ethics.
Corporate governance includes the management practices of a company, putting into account the conduct of the overall directors. It also includes the relationships between the board, management and shareholders. The guiding principles here are Transparency and accountability.
The conduct of the general management of a company means a lot to the company. For instance, if transparency cannot be established among the officials, and if accountability cannot be established among the employees, then the public is most likely to lose trust in such a company. This directly translates into failures and most likely, the company might close down. This explains why a company makes it its responsibility to ensure that corporate governance is achieved.
Sustainable Development plans
Companies also put into account development strategies that meet the needs of the present without compromising the future in their Sustainable Development plans. Before settling on a sustainable development plan, a thorough research needs to be conducted and the whole idea be evaluated and analyzed. This is normally done by professionals in the respective fields.
This includes the methods used by organizations to give out information on social, environmental, and economic performance. Reports on the achievements in sustainable development are given here. It also allows for transparency to stakeholders in terms of performance and behavior. The chief informer to the general public and other entities about the performance of a company is the report.
These reports should be genuine to avoid propagation of misleading information. A good company report markets its image while a bad one is detrimental. Companies always try to give the best reports whatever the circumstance even if this calls for false information.
Sustainable Responsible Investment
This is the amalgamation of personal values with investment decisions. In this approach both the profit potential and investment impacts on society and the environment are considered
Investments that secure a good future in terms of the profit and the environmental impact are highly considered. Examples include water management, renewable energy, waste management and health care.
Considering the two companies in our case study, Caltex focuses on efficient energy use. The refineries are allowed to burn their own fuels derived from the crude oil feed, as well as using natural gas and electricity. This results into great savings in fuel use.
On the other hand, Westpac Group engages in activities that lead to a low carbon economy.
Risk management and safety
It is a mandatory requirement that every company or organization guarantees the security of the stakeholders. At Caltex, safety is paramount and the aim is to achieve superior performance at maximum safety. There is an operational excellence management system across the entire supply chain, which addresses both process safety and personal safety of employees. There is a loss prevention program and an infrastructure improvement program which ensures that the operations run safely. It includes the reviewing of the safety procedures. There resolute commitment to Safety of the workers and the daily aim is that the workers return home safely. Due to the focus on personal and process safety, Caltex has seen a steady decline in injury frequency rate.
At Westpac, the risks and opportunities are identified from a wide variety of sources, including regular stakeholder consultation, strategic planning across the Group, media coverage, government priorities, customer research and benchmarking. These issues are then prioritized according to the impact on the stakeholders, business operations and financial outcomes.
Socially, Caltex supports a number of local community programs and provides sponsorships for schools, charities, sporting groups and cultural activities. In addition, it provides support to the broader community in areas relating to children, the arts and education. The dedicated employees across Australia raise funds and awareness in their local communities.
As the need for current and future leadership grows, Caltex engages in proper training on the leadership skills and it has established a curriculum to deliver high quality, business-relevant development for employees at different stages of their career.
The Westpac Group always aim at attaining social sustainability including responsible banking and working on issues of concern to local communities. Research in Australia has shown that 63% of its employees have participated in volunteering or fundraising activities. One third of this volunteering is done in work time, with almost half of all volunteers using their professional skills in their volunteering work. This company also participates actively in organizational mentoring.
It is a legal requirement that organizations be responsible for their actions as far as the environment is concerned. Every organization therefore tries to minimize their harmful environmental impacts. In this manner, Caltex supports an emissions trading scheme as a tool for reducing point source greenhouse gas emissions. It has advocated legislative design which would remove the threats posed by the Carbon Pollution Reduction Scheme to the international competitiveness of emissions-intensive trade-exposed industries such as oil refining.
It also acts responsibly by recording its energy use and greenhouse gas emissions in line with the National Greenhouse Emissions Reporting System. In terms of energy use, Caltex focuses attention on efficient energy use. The refineries burn their own fuels derived from the crude oil feed, as well as using natural gas and electricity, resulting in saving in fuel use.
At WESTPAC Group, the position remains supportive of flexible market-based mechanisms as part of a policy response to climate change. The focus is on detailed workings of an emissions trading scheme. The need for transitional arrangements is also supported to help companies adjust to a carbon-constrained economy, and encourage the necessary investment in suitable technology. There is also client engagement activity that focuses on customers in sectors most impacted by the planned emissions trading regimes in Australia and New Zealand. Discussions have centred on their level of carbon readiness as well as the products and services they will need to adjust to a low-carbon economy.
Business organizations usually have positive economic contributions to the society as they form the source of livelihood to many. But, this economic contribution usually comes with the negative impacts. In some cases, the rules may be too strict and the nature of the job so demanding that the employees lack time for their social responsibilities. In strict environmental terms, industries and business organizations that lead to pollution of the environment are always dangerous. Even though some industries try to compensate for this, the damage is beyond repair.
The Westpac Group Annual Review, 2009.
The Caltex Annual Review, 2009.
ParlimentaryJointCommittee on Corporation and Financial Services: Inquiry into Corporate Responsibility.