AN INCREASING number of companies are producing sustainability reports in response to expectations for more transparency and disclosure, and HR has an important role to play in contributing to the sustainability of their organisations
AN INCREASING number of companies are producing sustainability reports in response to expectations for more transparency and disclosure, and HR has an important role to play in contributing to the sustainability of their organisations.
Recent research conducted by KPMG found that even though Australia was a late bloomer compared to the rest of the world in adopting sustainability reporting, it has increased significantly in the past five years with more than 100 Australian companies and government entities producing such reports, according to Rob Hogarth, KPMG partner, Audit and Risk Advisory Services.
Sustainability reporting refers to public reporting on the three dimensions of financial, social and environmental performance, also called the ‘Triple Bottom Line’. It also includes related areas such as worker health and safety, employee diversity, ongoing professional development, representation by unions and issues such as maternity leave.
“Sustainability reporting has clearly moved from the margins to the mainstream, driven by the growing recognition for the business case for sustainability reporting. The business community increasingly understands that organisations that record and report sustainability information are well managed, with a full picture of the health of their entire operations at their fingertips,” Hogarth said.
“All in all, we are moving into a future where companies’ performance will increasingly be measured not just by their financial performance, but also by their non-financial performance.”
HR plays a critical role in corporate sustainability, according to Hogarth, in that they implement policies and assist in driving the culture set from the top down through operations levels. However this raises the challenge of striking a balance between management’s expectations and employee advocacy.
“I think HR professionals are often caught between what management want and what employees want, and then coming up with something that works,” he says.
“The challenge for them will be to fit a sustainability framework into that sort of tension. As more and more companies get involved in sustainability reporting that pressure is just going to increase amongst HR professionals generally.”
HR plays an important role in acting as a conduit of information back up the line as well, according to Stirling Habbitts, KPMG manager of Environment and Sustainability Services.
“Communicate with the employees and ask them about the important issues they confront, so that can get fed upwards and come through in the reporting,” he says.
Sustainability reporting has been found to be popular with employees – both current and prospective. Out of various stakeholders such as regulators, investors and general society, Habbitts said that employees are often the most avid report readers.
“Employees are the ones who are most interested in hearing how their companies are being run in non-financial areas such as social and environmental performance,” he said.
“What you find over time is that people who are interested in corporate sustainability tend to gravitate to companies that are serious about it and putting a public face to it and are transparent in their reporting of it.”
KPMG recently sponsored the Association of Chartered Certified Accountants (ACCA) Australia and New Zealand Sustainability Reporting Awards, in which City West Water, Sydney Water and Watercare were jointly awarded the best sustainability report award.
BHP Billiton was awarded with the best environmental report in the Sustainability Reporting Awards.
