Cost accounting project

Background

Sustainability reporting remains primarily discretionary.  While the number of companies that are issuing more comprehensive sustainability reports is continuing to increase, there is still no required framework for reporting either.  The Global Reporting Initiative (GRI) is a front-runner in providing a framework, with over 3,500 companies currently reporting; however, even those companies that use this framework can selectively choose different levels of reporting and different indicators to report on as well.  As a result, companies’ sustainability reports vary extensively in terms of presentation, content and overall objectives.  Regardless, as an accountant, it is important to become more familiar with these reports given the increased value that stakeholders, including institutional investors, are placing on them.

This case study is an exercise for you to become more familiar with sustainability reporting and its components and to identify best practices and weaknesses in existing reporting.  The overall learning objectives are to:

  • Identify ways to locate a company’s sustainability report.
  • Enhance your ability to read and understand the story told by a company’s sustainability report.
  • Understand the impact of various indicators often included in a sustainability report.
  • Compare and contrast the principles underlying financial reporting and sustainability reporting.
  • Better understand the contributions the accounting profession can make to sustainable business practices.
  • Gain a sense of the complexity around triple-bottom-line reporting.
  • Demonstrate how the issues around sustainability are being addressed by companies and how working on these issues can help to mitigate risk, improve operations and/or create revenue.
  • Compare and contrast different types of sustainability reports (consistent with the lecture notes for this module).

 


Required

  • Work with your group (assigned in Blackboard). Read all requirements prior to beginning the project.
  • Download the most recent sustainability report for a company of your choosing (not Canadian Tire). You do not need to print a hard copy to do this assignment. Some reports are provided as a PDF document while others report through targeted web pages.
    • You can find sustainability reports by using the GRI website: http://database.globalreporting.org/search. You may also go directly to a company’s website and search for the area of sustainability or, in some cases, a sustainability report might also be located within the investor relations area.  Alternatively, you can also search using the company’s name followed by “sustainability report.”
      • Some examples of companies that publish sustainability reports include:
        • Coca-Cola
        • Clorox
        • DuPont
        • International Paper
        • Consolidated Edison
        • Deutsche Telecom
        • Hertz
        • Williams Company
      • On your group discussion board within Blackboard, set up a forum for each of the following questions. Use the forum to discuss and answer the questions. Make sure each participant contributes to answering each question.
        • What is the company’s history and frequency of reporting on sustainability? What would this convey to you?
        • Why is the company reporting on sustainability?
        • Does the company include a definition of sustainability and, if so, how does the company define sustainability?
        • Is the company’s purpose reported and aligned with sustainability?
        • Does the report demonstrate a commitment by senior management?
        • Who owns sustainability in the company — board, CEO, CFO, public relations? How do you know that this is the group taking ownership?  Is the report integrated with strategy, risk management or corporate governance? What does this tell you?
        • Determine the operational scope of the report and what portion of the entity is included in the report (GRI calls this the reporting boundary). Does the report include the impact of outsourced activities (if applicable)?
        • Determine the geographic scope of the report.
        • What sustainable categories are addressed in the sustainability report?
        • What are the metrics used in measuring performance?
        • Does the report provide any indication of cost savings or revenue opportunities generated by the company’s endeavors to operate sustainably? If so, provide detail.
        • Does the report communicate the reporting methods? If so, what are they?
        • Is there third-party assurance on their sustainability metrics and disclosures?
        • Is there participation of stakeholders, NGOs, independent experts?
        • What does the report include on the company’s philanthropy and social investment?
        • Does the company acknowledge the contributions of employees? If so, provide detail.
        • As a stakeholder (you define the stakeholder role you want to assume), what items are of material interest to you, and is the company reporting on these items?
        • Provide an example of an opportunity where the company could improve how it’s meeting its responsibility to its stakeholders.
        • What improvements would you suggest to the company in its reporting?
        • How is your company’s approach to sustainability similar to the approach of Canadian Tire? How are they different?
        • Does the sustainability report make the company more or less attractive to you from an investor perspective or as a potential employer?
      • Create a professional document that provides answers for each of the questions based on the group discussions within each forum. Post this document using the File Exchange in your Blackboard group. Name this document “FirstDraft.” Make sure to restate each question in the document. Use paragraphs and complete sentences in your professional document.
      • Each group member should provide written comments aimed at improving the document “FirstDraft.” These comments should be posted in a forum titled “Comments to improve FirstDraft.” The comments from this forum should be incorporated into a final professional document titled “Final” and uploaded to your group’s File Exchange in Blackboard. The document “Final” should be a Microsoft Word file of no more than 2,500 words including the restated questions. Use paragraphs and complete sentences in your professional document. Answer each question as completely as you can within the word limit.

 

 

 

 

 

 

 

 

Grading

  • Discussion Forum Participation (50%, individual component)
    • Overall, are you at least an equal partner contributing to the final document?
    • Meaningful participation on individual questions?
    • Comments on FirstDraft.
  • “FirstDraft” (20%, group component)
    • Completed according to guidelines
  • “Final” (30% Group Component)
    • Format (Microsoft Word, also see guidelines for preparing a professional document)
    • Word Count (<=2,500)
    • Professionalism (spelling, complete sentences, paragraphs, professional tone)
    • Completeness (questions are completely addressed)

 

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