Part 1: Level of sustainability strategy integration into the overall business strategy
Business organizations are increasingly emphasizing on developing and disclosing the information about their sustainability performance for achieving accountability and transparency within the operations. The sustainability information relates to the key measures and initiatives adopted by a company to improve its performance in the social, economic and environment aspects (Chen, 2015). In this context, this report has undertaken analysis into the key sustainability issues present within a selected company that is Origin Energy Limited. The company is involved in generation and retailing of energy products within Australia and therefore has diverse business operations that can negatively impact the society and environment. As such, the repent examines the various sustainability aspects of the company for ensuring that it is adopting adequate measures to protect the society and environment from any of the negative business operations. The report has examined the sustainability strategy, stakeholder engagement, strong and weak areas of sustainability performance and overall assessing the sustainability performance in terms of readability and application of GRI framework.
Integration of sustainability strategy into the business means recognizing the importance of incorporating social, environmental, and governance into the process of planning and operations of core businesses. Many of the business leaders have adopted the sustainable development plans into their business to provide proper response to the social and environmental issues related with the business operations (Brockett, 2012). Customers are more likely to loyal with those companies that adopt the sustainability strategies into their business operations. In this section, sustainability report of Origin Energy has been analyzed to report on level to which company has integrated the sustainability strategy into the overall business strategy. Some of the important information that provides information how Origin Energy has integrated sustainability strategies into their business:
The objective to act sustainable in every aspect of company operations made Origin Energy a sustainable organization. Origin Energy has clear objective to act sustainable and engage with all sorts of sustainability criteria (Origin Sustainability Report, 2017). Origin Energy belongs to the energy sector which has main issue related with global emissions and steps taken to reduce them. In this context Origin Energy has clear sustainability objective to reduce the carbon emission generated through its business operations.
Origin Energy business strategy is to engage effectively with its suppliers, distributors, and other members of the value chain process for promoting the sustainability performance. Origin Energy has clear policy to select their business partners and they bind all their partners to follow the same. Origin Energy believes in effective collaboration with the business partners helps them to accelerate the sustainability across the company value chain. The collaboration with the business partners is so effective that it has helped the Origin Energy in reducing the impact of the organization and to introduce new and innovative processes and products.
Origin Energy believes that customers are most important part for any organization and without engaging properly for the needs of sustainability will lead to failure of integrating the sustainability into the business. Origin Energy has developed a platform through which customers or clients can check or be assured on actions taken for keeping the sustainability ahead of any business process (Origin Sustainability Report, 2017). Origin Energy believes that it is important to make customers aware about the environment friendly services and products provided to them irrespective of prices. In this way all around sustainability can be achieved through satisfying the needs of customers.
Part 2: Key stakeholders that Origin Energy engaged themselves
Origin Energy believes that effective communication of sustainability goals within the organization can help them to prosper the sustainability in much faster way. In this context they have provided a clear and concise sustainability goal of sustainability so that everyone can understand and work in same direction to achieve it (McElroy, 2012).
All the points above indicate that Origin Energy has been successful integrating the sustainability strategies with the overall business strategies. The sustainability strategies are drafted in such a manner that helps to achieve and fulfill the business objectives with proper regards to sustainability.
Stakeholder’s engagement is key motto for any sustainability driven organization. To promote the sustainable business, Origin Energy believes to provide an overview on how they are meeting the needs and expectations of their stakeholders who are interested in our business (Civelek, 2015). Different stakeholders and their engagement with the Origin Energy:
- Investors: In order to engage the investors, Origin Energy host annual general meeting, media briefings and investors roadshows to engage the investors and provide sustainability information in planned manner. Origin Energy undertakes and responds to the queries of investors, analyst and media.
- Customers: In order to engage the customers, Origin Energy has improved the online experiences related to sales and other services. Origin Energy works proactively with the consumer protection regulators and other ombudsmen in order understand and meet the needs of the customers. Company has provided open blog to interact with their customers and provide proper feedback to their queries (Origin Sustainability Report, 2017).
- Employees and people within the organization: Origin undertakes the annual engagement survey to provide the platform to the employees where they can shape their working environment. In addition to this Origin Energy run various workshops, campaigns to engage their people with the need to achieve the sustainability.
- Society or communities: Company takes an opportunity to make effective communication with the communities and traditional owners of the land around the business operations. Origin Energy continuously makes interactions with the intermediaries such as regulators, media, and other government organization to promote the community interest both in Australia and internationally.
As analyzed from the sustainability report of the company, the major area of its strong sustainability performance is reduction of greenhouse gas emissions level and reducing the carbon footprint from its business operations. The overall emission of greenhouse gases from its business operations has experienced a decline in the year 2017 as compared with that of the year 2016 (About Origin: Sustainability, 2017). The intensity of carbon dioxide has reduced from 0.82 to 0.79 per cent during the financial year 2016-2017. The electricity generation portfolio has consumed about 0.87 tons of carbon dioxide in the year 2017 as compared with that of NEM having an average consumption of about 0.88 tons of carbon dioxide. In addition to this, the strong sustainability performance area of the company can be regarded its ability to prevent the contamination of water. The process of electricity generation involves huge water resources that can be significantly polluted as a result of energy production activities. As such, the company has placed huge emphasis on developing effective system that intends to responsibly manage the consumption of water resources. The business operations of the company seek to responsibly manage the consumption of water and protecting it from any type of exploitation.
This has been achieved by the company by drawing water from surface sources such as rivers or lakes. The Eraring coal-fired power station of the company sues water from lake for the purpose of cooling. The water is directed to the water treatment facilities for overcoming any type of pollution present in it with the use of reverse osmosis process. The treated water as such is used for other beneficial purposes. Thus, it can be said that company has maintained an effective control over management of its water resources. The water management system implemented by the company has enabled it to ensure that water quality in the environment is not negatively impacted by its diverse business operations during electricity generation (Origin Sustainability Report 2017, 2017).
Origin Energy is emphasizing on developing sustainable energy solutions for meeting the future energy needs of the customers. As such, the company is placing focus on exploring the new sources of renewable energy such as wind and solar for developing energy products. This is placed emphasis by the company as per the initiatives undertaken within Australia to transit a low-carbon electricity supply system. This can be achieved by the energy companies through investing in exploring energy from various renewable energy sources for ensuring the protection of environment (About Origin: Sustainability, 2017). However, the company is still lacking in exploring the renewable source of energy for meeting the energy requirements as it involves high investment on the part of the company. The high investment incurred by company in production of energy products by exploring the renewable energy sources will also significantly lead to an increase in the prices of products. This can negatively impact the customer satisfaction and thereby sustainability performance of the company. The company is also facing significant issues to achieve the highest possible standards of energy security and reliability by complying effectively with the energy regulations developed by various regulatory agencies within Australia (Slezak, 2017).
Part 3: Commentary on areas of strong sustainability performance of the company
The company has recently faced allegations on account of its non-compliance with the environmental, regulatory and other legislative requirements. It has often failed for reporting the incidents in relation to its ineffective compliance with legal requirements due to lack of proper internal systems. Also, it has yet to comply properly with the regulator requirements required to maintain a Health, Safety and Environment (HSE) culture within the workplace. There is various HSE risk present within the workplace as the company is involved in exploring diverse range of energy sources that area associated with the risk of occurrence of occupational hazards (Origin Sustainability Report 2017, 2017).
(a) Readability
The sustainability report of Origin Energy Limited can be ranked high on readability due to presenting a synchronized flow of information. The sustainability information in context of the company is disclosed throughout the report by dividing into various sections and sub-sections. The sustainability aspects of the company are disclosed in relation to the significant risks that the company is facing in this context as stated in its operating and financial review. The overall report actively engages the readers by developing separate section for reporting performance on each of its material, social, environmental and economic sustainability aspects. The various section in the report included for depicting the sustainability performance includes energy and climate change, emissions, people and culture, safety, process safety, water, waste, land access, communities, supply chain, customers, policy, financial performance and stakeholder engagement. The company in the sustainability report has disclosed information about its key sustainability issues by the use step-by-step process for actively engaging the readers in the report content. For example, it has adopted the use of five pillar approach for stating the progressive decarburization of its business In addition to this, it has also integrated the sue of graphical presentation of data to disclose the information in relation to its key sustainability issues (Origin Sustainability Report 2017, 2017). For example, it has adopted the use of graphical illustrations for depicting its coal generation’s capacity in terms of emission intensity against its key competitors that can is depicted as follows:
The expected growth of the company in exploration of its renewable capacity by the end of the year 2020 is also illustrated through graphical presentation as follows:
The comparison of its average emission intensity in the National Energy Market (NEM) is also depicted through the following graph in its sustainability report:
The sustainability report has adopted a logical structure for disclosing the information with table of contents provided in the starting for easy navigation. Each section of the report is explained in detail with the use of detailed discussion and by providing in-depth information about each of its sustainability aspect. Thus, it can be said that the sustainability report of the company has succeeded in presenting quality information to its stakeholders (Rezaee, 2017).
The global Reporting Initiative (GRI) guidelines are known to be international independent standards that help organization in understanding and communicating the impact of their business operations on society, economy and environment. The adoption of GRI guidelines by a business organization helps the stakeholders in ensuring that the sustainability report developed presents quality information about its sustainability areas (Gibassier and Unerman, 2014). Origin Energy Limited in its sustainability report has assured that it adopts the use of Global Reporting Initiative (GRI) for presenting and communicating its sustainability information to the end-users. In this context, the company has also adopted the use of AA1000 Accountability Principles for informing its stakeholders about its sustainable information. The reporting principles adopted by the company for disclosing the information about its sustainability performance as per the GRI framework in its report content are stakeholder inclusiveness, sustainability context, materiality, completeness, accuracy, balance, clarity, comparability, reliability and timeliness. It has developed and disclosed a spate GRI supplements for ensuring that each of its reporting principles are adopted by the company to prepare the information about its different sustainability aspects (Origin Energy: GRI Supplement, 2017).
In addition to this, it has also adopted the use of Environment Protection Act 1994 for reporting the information in relation to its business activities on the environment. Also, it adopts the use of HSE Management system for reporting information about employee’s health, safety and management procedures and policies adopted. The company has also adopted the use of National Electricity Market (NEM) for comparing its sustainability performance in relation to its emissions intensity (About Origin: Sustainability, 2017).
Conclusion
It can be stated from the overall analysis carried out in the report that sustainability reports are developed by business entities for meeting competitive pressure from all of its stakeholders. The disclosures are intended to achieve the stakeholder satisfaction by providing them adequate information about its operations. The sustainability report of Origin Energy Limited is developed as per the GRI framework and is enriched with content disclosing information about sustainability issues of the company. The sustainability strategy of the company is to develop sustainable energy products for Australia by exploring new and innovative renewable energy sources. The strong areas and weak areas within the sustainability aspects of the company are also discussed in the report. In addition to this, it has also depicted that the company has presented the report in a logical format with the use of graphical illustrations and tabular presentation to actively engage the reader’s throughput the report.
References
About Origin. 2017. Sustainability. [Online]. Available at: https://www.originenergy.com.au/about/sustainability/sustainability-reports.html [Accessed on: 14 October, 2018].
Brockett, A. 2012. Corporate Sustainability: Integrating Performance and Reporting. John Wiley & Sons.
Chen, L. 2015. Sustainability and company performance: Evidence from the manufacturing industry. Linköping University Electronic Press.
Civelek, M. 2015. Key Factors of Sustainable Firm Performance. Lulu.com.
Gibassier, D. and Unerman, J. 2014. Sustainability Accounting and Accountability. Routledge.
McElroy, M. 2012. Corporate Sustainability Management: The Art and Science of Managing Non-financial Performance. Routledge.
Origin Energy: GRI Supplement. 2017. [Online]. Available at: https://www.originenergy.com.au/content/dam/origin/about/Origin_GRI_2018.pdf [Accessed on: 14 October, 2018].
Origin Sustainability Report 2017. 2017. [Online]. Available at: https://www.originenergy.com.au/content/dam/origin/about/investors-media/annual%20review%202017/FY2017%20Sustainability%20Report.pdf [Accessed on: 14 October, 2018].
Rezaee, Z. 2017. Business Sustainability: Performance, Compliance, Accountability and Integrated Reporting. Routledge.
Slezak, M. 2017. Origin Energy ignores coal seam gas well leaks, whistleblower says. [Online]. Available at: https://www.theguardian.com/environment/2017/jan/27/origin-energy-ignores-coal-seam-gas-well-leaks-whistleblower-says [Accessed on: 14 October, 2018].
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