Importance of Monitoring Sustainability Indicators
Discuss about the Evaluating Impacts Of Development.
A sustainable enterprise is a business which undertakes processes that results in negligible negative impact on the society, economy, community and global environment. In other words, the business that struggles for meeting the triple bottom line is known as a sustainable business. Moreover, active participation is shown by a sustainable enterprise in environment friendly activities for the purpose of ensuring that the processes, products and manufacturing activities undertaken adequately address the existing environmental concerns along with maintaining sufficient profits (Felic, Herrmann, Hogrefe, Klein & Konig-Ries, 2015).
The use of monitoring systems is made for measuring and monitoring the sustainability of business at regular intervals for the purpose of bringing effectiveness in the business operations. Proper monitoring system assists in effectively reducing the risks associated with business as it facilitates decision making at the correct timing. A good monitoring system also fosters the growth of an organization and provides a number of measures for reducing the losses incurred. The monitoring systems require to be updated from time to time for providing the foundation of future performance targets. The monitoring system is maintained by the high level managers in the workplace who are supposed to possess special skills for its maintenance. The different aspects of the monitoring system represents various dimensions of an organization namely- socio- cultural, economic and environmental dimension. Such dimensions can be measured with the help of effective indicators. In other words, Business is also responsible towards the people, economic activities and environment (Rahdari & Rostamy, 2015).
The sustainability indicators assist in the creation of understanding towards the current path adopted by business, current position, and difference between current and target position (Mascarenhas, Nunes & Ramos, 2015). The indicator also performs the function of providing alerts to the business before worst circumstances are created by any problem along with recognizing measures for fixing the problem. Sustainability indicators also assist in pointing out the weak points between economy, society and environment. Indicators are of two types i.e. traditional indicators and modern indicators. Asthma rates, water quality and shareholder profits are the traditional indicators that are utilized for the quantification of variations in the parts of the community supposing that such parts are not reliant on other parts (McIntosh, 2017). On the other hand, modern indicators of sustainability represents that the segments i.e. social, economic and environment are interconnected.
Sustainability Dimensions of Bank Australia
Figure 1 Economy, Society and Environment: A Nested Relationship
(Source: Environmental Protection Agency, 2017)
The figure depicts that there is a nested relationship between society, economy and environment. The environment provides the raw material to the businesses which in turn provides employment opportunities to a number of individuals and becomes a source of profit for the stakeholders. Moreover, the productivity of the employees is affected due to health problems, air quality and toxic materials in the environment which increases their health insurance costs. Therefore, links among the economy, society and environment are presented by the multidimensional indicators in the form of integrated view of the world (Abdul-Ali, Davis, Twomey, & Knowles, 2017).
These indicators are important because it helps in easily resolving the issues being faced. It also assists the business in gaining knowledge about the system efficiency and provides guidance for overcoming the present problems. It also allows an organization to constantly focus on the key issues and hinders from deviating from its path. Effective indicators perform the function of providing knowledge about the system and have different features from other indicators. The information provided by effective indicators is reliable and can even be easily understood by a person who is not expert in the field (Chofreh, Goni & Klemes, 2018).
The focus of this report is on the three important dimensions of a sustainable enterprise ‘Bank Australia’ namely socio- cultural, economic and environmental along with the brief overview of the enterprise, sustainability indicators applicable to the enterprise and the list of indicators which can help to monitor environmental dimension.
Bank Australia is an Australian financial co- operative based in Kew, Victoria. Earlier, Bank Australia was known as Members and Education Credit Union (mecu) and later as bankmecu. Bank Australia has gained reputation for being a customer owned responsible bank which operates for the creation of mutual prosperity for their customers, planet and within the community in which they perform their day to day operations. The bank has an outstanding history of 60 years as it is the most preferred bank for the customers since 1957.
Bank Australia provides a number of facilities to its customers in the form of online and phone banking. Various branches and more than 3,000 ATMs of Bank Australia are situated in different parts of Australia. More than 1,24,000 customers along with a number of community sector organizations prefer to conduct their banking activities with Bank Australia (Bank Australia, 2018).
Bank Australia’s Initiatives towards People, Planet, and Prosperity
For the purpose of positioning itself as the bank for the future, bankmecu changed its name to Bank Australia on September 1, 2011. It was due to the reason that the name bankmecu was quite confusing and did not appeal to people. Therefore, the name was changed in order to attract the younger generation in assisting their customer owned bank. Bank Australia offers their services to a number of community groups, NGOs and charitable funds. The bank is also involved in making contribution towards people, planet and prosperity by way of investing 4% of its after tax profits into Bank Australia Impact Fund. Such fund provides the requisite funding for the projects that have a quantifiable impact on those three dimensions. Customers are taken into consideration for the purpose of identifying the areas where priority funding is required. This is done for ensuring that profits are invested in the areas that are linked with the values and concerns of the customers. The existing priority areas of the customers of Bank Australia include environmental sustainability, gender equality, disability, social enterprise, educational disadvantage and reconciliation (Agol, Latawiec & Strassburg, 2014).
Bank Australia engages in a number of social activities. It has entered into partnership with CSIRO such that the indigenous students can have access to scientific education. It also provides scientific calculators to the students who cannot afford it on their own with the help of State Schools Relief funding. It also invests in partnerships for supporting the projects that are targeted towards educational disadvantage and the development of educational professionals. The Impact Fund of Bank Australia also supports the community projects that are run by their customers. Recently, Bank Australia has funded nearly 13 different projects, out of which three mainly focused on the education sector. The basic aim of Bank Australia behind funding these projects was to offer varying opportunities to the school student which may range from gaining of work experience to expansion of knowledge in different subjects.
The three key areas of the triple bottom line (people, planet and profit) are captured by the sustainability dimensions namely socio- cultural, economic and environmental dimensions (Fink & Andriate, 2017). The sustainability dimensions depict the importance of sustainability by defining how the activities of a business impact the entire world.
The definition of the socio- cultural dimension of sustainability provides that it is the ability of an organization to assure welfare of the society in terms of education, security and health by way of distributing it equally among gender and social classes. The social dimension of sustainability includes factors such as safety, satisfaction and health of employees, impact on local community and the customers (Larner, Cheverst, MacDonald, Hoile & Soutar, 2017). Therefore, it can be concluded that an organization’s social impact can be easily measured as compared to the measurement of environmental and economic impacts.
The range of social dimension applicable to Bank Australia includes the creation of positive social outcomes for the community, staff and customers. For this purpose, Bank Australia undertakes a number of initiatives. It offers employment opportunities to regional communities by committing that the jobs will not be offshored. It also aims to fulfill its obligations by ensuring that safe, sure and affordable housing its offered to people by making investments in community housing (Hak, Janouskova & Moldan, 2016). Social issues having importance for the customers are also addressed by Bank Australia by undertaking wide range of initiatives through the Bank Australia Impact Fund. It has also signed a Reconciliation Action Plan for the purpose contributing towards minimizing the gaps between Australians and First Peoples.
The economic dimension of sustainability takes into consideration the impact of the organization on the stakeholder’s economic circumstances. This dimension, therefore, focuses on improving the economic status of the stakeholders rather than concentrating on the company’s economic status (Edgeman, Neely & Eskildsen, 2016). The major stakeholder of Bank Australia is its customers since it is a customer owned bank. Its main purpose is to create prosperity for their customers. It invests money in a responsible manner for creating mutual prosperity.
The range of economic dimension of sustainability applicable to Bank Australia includes assisting people in achieving their financial goals by way of incorporating programs linked with financing and lending. It aims to promote financial inclusion of people who are not capable of gaining access to mainstream banking activities (Morse, McNamara & Okwoli, 2017). Bank Australia considers its customers as the owners of the bank and therefore returns profits to them in the form of better rates and fair fees. It has created a customer owned model which is based on the benefits of its customers with respect to banking services that they conduct with the bank. The bank makes every possible effort for complying with the model. It invests the customer’s money responsibly for the purposes that are considered to be ethical, responsible and beneficial for the community or the environment. It is done according to Responsible Lending and Investment Policy.
The environmental dimension of sustainability considers the aim of fulfilling the requirements of present generations in a manner such that the needs of future generations are not compromised. This dimension focuses on the impact of organizational activities on the environment (Marans, 2015). The range of environmental dimension of sustainability applicable to Bank Australia include the protection of environment and creation of a heathier planet through the use of a progressive approach that builds a strong, fair nation and a healthy planet. (Selomane, Reyers, Biggs, Tallis & Polasky, 2015)
For achieving this, Bank Australia invested in the first environmental project of the world which was named Bank Australia Conservation Reserve. Such reserve is mutually owned by the customers of the bank. It also promises that it will not grant any loan to the fossil fuel industry along with projects that are linked with coal seam gas (Huang, 2018). It also offsets the environmental impacts caused by the home constructions that are financed by them through the use of Conservation Reserve. It has become the first bank of the world that has signed seven climate commitments under We Mean Business which is a climate leadership platform. From the year 2011, it has decided to stay carbon neutral and ensures that the building of their banks and the activities of their staff does not negatively impact the environment. An environmental policy guides the bank in this work.
A value based system forms the basis of the business activities of Bank Australia. Such system fixes its prime focus on the economic, social and environmental responsibility. Moreover, Bank Australia undertakes a number of initiatives for the purpose of facilitating building capacity within the community through social programs. Programs like Community Investment Program aims at providing the positive impact of the business to the community. This is done by way of prioritizing the areas which are concerned with the business of the company, workforces, products and services and members.
Furthermore, it has become a signatory to United Nations Environmental Programme through which it has committed for the positive interaction between economic and social development and environmental protection by way of evolving a sustainability strategy. Such sustainability strategy takes the form of a Sustainability Covenant which emphasizes on key areas namely social impact, ethics and governance, leaderships and partnerships, employees and environmental impact (Ghinea, Campean & Gavrilescu, 2017).
The specific sustainability dimension selected for Bank Australia is the socio- cultural dimension. This dimension is selected because Bank Australia considers itself as a customer owned bank. It works for their customers by taking full responsibility of the activities undertaken by them. Moreover, they care for their customers, provide them outstanding services and competitive prices and ultimately create mutual prosperity (Banos-Gonzalez, Martinez-Fernandez & Esteve-Selma, 2015).
The main purpose behind the working of Bank Australia is for creating positive social outcomes for individuals which includes the community, customers and the staff which play an important role in their business operations. This dimension can be easily monitored by a list of indicators (Lipsky, Friend, Abdul-Ali & Russell, 2017)). Therefore, some indicators have been developed which can help Bank Australia in monitoring the socio- cultural dimension of sustainability.
The indicators include human rights, employment, education and health and safety.
Human Rights- Human rights can be defined as the rights which are equally available to all human beings regardless of their national origin, color, socioeconomic stratum, sexual orientation, language, etc. Bank Australia can measure equality of human rights by ensuring diversity in the workplace. It should monitor that marriage equality is also supported in the organization by way of supporting equal opportunities and rights for all the people.
The challenges in this indicator include encounter with waging humiliation battles from individuals of the community and from other employees in the bank. Employees and customer belonging to different sexual orientation sometimes hesitate in coming forwards which may create difficulty in ensuring equality in human rights. This in turn creates complexes in measuring the improvement.
Employment- The term employment can be defined as the contract that take place between two parties which results in creating a relationship between them. Such relationship requires payment to be made by the organization for the work done by employee (Keynes, 2016). Migration of people is considered to be the central problem in Australia. People migrate from other countries in order to get a favorable job. This indicator can be effectively measured by Bank Australia by considering the unemployment and existing job structures.
Some steps are currently being taken by Bank Australia for monitoring this indicator. The Bank has been committed to be an inclusive employer so that employment can be kept in Australia. It periodically measures the unemployment rates and keeps into view the job structure of the region.
The challenges in the measurement of this dimension include high degree of migration in Australia. Also, there are a number of social problems which negatively impact the future growth opportunities for the workers (Strezov, Evans & Evans, 2017).
Education- The term education can be defined as the process with the help of which general knowledge is acquired by an individual along with developing the powers that support reasoning and judgement (Ary, Jacobs, Irvine & Walker, 2018). Such powers and knowledge prepares the individual for leading a mature life. Bank Australia can effectively measure this indicator by monitoring the education levels and research and development within the region. It also takes into account some programs for the educational development of indigenous people. The challenges in the measurement of this indicator include registration of students but taking classes. Students show lack of interest and resistance in learning science.
Health and Safety- The term health and safety can be defined as the well- being of an individual in terms of physical, social and mental aspects (Walker, 2015). It also includes safety of an individual from risk, dangers and injuries. This indicator can be effectively measured by way of monitoring the premature deaths and life expectancy rates. Bank Australia is undertaking certain activities for measuring this indicator. It has developed a Reconciliation Action Plan for the purpose of outlining the actions for reducing the gaps in the life expectancies of First Peoples of Australia and other Australians.
The challenges faced in the monitoring of this indicator include the inequalities in access to the important health care services to Torres Strait Islanders and Aboriginal people. Slow progress rates of life expectancies also make it difficult to meet the target of effective measurement.
|
Indicator name |
Definition |
Measurement |
Challenge |
|
Human Rights |
Human rights can be defined as the rights which are equally available to all human beings regardless of their national origin, colour, socioeconomic stratum, etc. |
By ensuring diversity in workplace. |
Encounter with waging humiliation battles from individuals of the community and from other employees in the bank |
|
Employment |
Employment can be defined as the contract that take place between two parties which results in creating a relationship between them |
By considering the unemployment and existing job structures. |
High degree of migration and social problems in Australia |
|
Education |
Education can be defined as the process with the help of which general knowledge is acquired by an individual along with developing the powers that support reasoning and judgement. |
By monitoring the education levels and research and development within the region |
Students show lack of interest and resistance in learning science. |
|
Health and Safety |
Health and safety can be defined as the well- being of an individual in terms of physical, social and mental aspects |
By monitoring the premature deaths and life expectancy rates. |
Inequalities in access to the important health care services to Torres Strait Islanders and Aboriginal people |
Conclusion
Therefore, it can be concluded that sustainability plays an important role in the operations of an enterprise. This reports focuses on the three dimensions o sustainability namely socio- cultural, economic and environmental dimension in the context of Bank Australia. Moreover, this report discusses socio- cultural dimension as the specific sustainability area and developed a list of indicators for the monitoring of this dimension. The indicators include human rights, employment, education and health and safety. However, some challenges are faced in the monitoring of these indicators.
References
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