Stakeholders’ Interest In Financial Information And Environmental Disaster: Answers To Questions

Stakeholders’ Interest in the Western Bulldogs Football Club Financial Information

From the point of view of a football club, stakeholder can be defined as an individual or organization whose activities and approaches deeply influences the realization of the team, participants or an entire club as a whole (Bebbington et al. 2014).

The stakeholders and their respective interests of Western Bulldogs are discussed here.

Banks expects that clubs will take loans from them and they also pay off their loans on time. The main interest of the bank is that they encourages players to open accounts with them which in turns increase their publicity and indirectly their business.

Government expects football clubs to get involved in charitable programs and also works to improve the image of football because at international level, these clubs represents the Nation.

Shareholders expects to get a reasonable return of their investments and opportunities to access games.

Sponsors tags their names with the football clubs to get benefit from their success and popularity. As the football team gets recognition the popularity and goodwill of the sponsors also increases.

The expectation of media is to make important audience from which they can make financial profit. If the club can arrange for games which are competitive and pleasant to watch then more audience will be attracted and hence the profit will be increased.

Global Reporting Initiative or GRI founded in Boston in 1997 is a US based non-profit organisation. GRI is an internationally renowned independent organisation whose objective is to help the governments, businesses and other organisations to understand and communicate the impact of business on issues based on critical sustainability which includes human rights, change of climate, issues relating to corruption and many others (Sands and Lee 2015).

The vision of GRI is to create such a future where sustainability will be vital and primary condition in the decision making process of every organisation.

The mission or objective of GRI is to empower all the decision makers from all over the world through the sustainability standard set by GRI and through the multi-stakeholder network of GRI in order to take action towards an economy or world which will be more sustainable.

• In the power of a multi-stakeholder network and process.
• For a change, transparency is a catalyst or compound.
• That the standard set by them empower informed decision making.
• In order to change the world, a global perspective is always needed.
• Every decision that an organisation makes must be driven by public interest.

In the report which is published by a company or an organisation about the environmental, economic and social impacts which are caused due to its day-to-day activities is known as Sustainability Report. It also represents the values of the organisation and governance model and establishes the link between its strategy and commitments in order to achieve a sustainable global economy. Sustainability reporting also allows an organisation to understand measure, interconnect their environmental, social, economic and governance model, and set goal accordingly so that it can manage change more efficiently and effectively. Sustainability reporting can also be termed as similar to other forms of non-financial reporting such as triple bottom line reporting, Corporate Social Responsibility Reporting, etc.. In order to communicate sustainability performances and its impact, whether it is negative or positive, sustainability report is its best platform or stage (Ball 2014).

• The sustainability report must include Transparency
• The report should be Authentic
• The report must include Stakeholders engagement
• The sustainability report must also be meaningful.

The chosen Sustainability Report is the Sustainability Report of the Coca Cola Company for the year 2015-2016. There are several reasons for which I have chosen this company but the major reason are:

• Women Empowerment
• Water Stewardship
• Well-Being
• Sustainable Packaging
• Climate Protection
• Rights To Human And Workplace

GRI’s Sustainability and Reporting Measures

There is a uniqueness in the application of sustainability to their business by the Coca Cola Company. Amongst them some important measures towards sustainability are mentioned below.

The company has achieved a milestone in the year 2015 by enabling an overall economic empowerment of women from all around the world. At the end of the year 2015 the 5by20TM initiative has empowered more than 1.2 million women across the globe to become entrepreneurs. Not only this, over 372,000 women participated in the initiative and the number of participants are increasing by 43% each year.

In order to reduce the climate impact, the Coca Cola Company is continuously making several changes in their operations. This is evident from the fact that decision of the company was taken to bring several sustainability initiatives under one goal so that it is possible to reduce the carbon footprints in the drinks that we consume by 25% by the year 2020. Several other measures are also been taken so that the Greenhouse gas emission from all the manufacturing units can be reduced to a considerable amount (Wood et al. 2014).

Packaging is an important component towards the safety and protection of the products. Coca Cola is focused on sustainable packaging through several efforts and also by evaluation opportunities so that the waste and emission profile can be reduced.

Through the Coca-Cola foundation and company’s decision, one percent of the company’s annual operating income is invested back into the community for their development. From the time of its commencement, the company has invested more than $830 million in grant to support sustainable community initiative across the globe.

Volkswagen AG which is internationally known as Volkswagen Group is a German based multinational automotive company, having its headquarters at Wolfsburg, Lower Saxony in Germany has been held responsible by the US Environment Protection Agency for 70% of the diesel based car in US had been cheated on emission test by installing some devices on their vehicles in September 2015.

The core business of Volkswagen is that it mainly manufactures, designs and distributes commercial and passenger vehicles, motorcycles, engines, turbo machinery and also offers services that includes financing, leasing, fleet management, etc..

After the company has been forced to admitted that there were some software and devices installed in their vehicles in order to cheat emission, German car maker Volkswagen is now experiencing thorough scrutiny of everything (Deegan 2014).

The key facts of this case that one must know are discussed below.

How did the cars cheat the tests –

A software named as “defect device” would switch the engine to a cleaner mode as the vehicle undergone emission test. Thus, the emission test always showed positive results even if there was any fault in the engine. The sophisticated software used by the US Environmental Protection Agency detected this.

As per the records of Volkswagen, they admitted that there are 11-million diesel vehicles worldwide basis that were fitted with this software. However, the company was not able to comment on the fact that how many of them are on UK roads.

Sustainability Initiatives of Coca-Cola

According to the findings of the US agency, Volkswagen’s Jetta, Beetle, Golf and Passat were affected. Amongst them the Golf model was 4^th biggest selling car in UK, which was 45,597 (approx.). They also stated that the issue is related to all vehicles having EA 189 Engines installed.

The company had to recall millions of vehicles and also had to bear a heavy penalty of $18 Million (US Dollar). Further shares in the company was down by 19% and later a further by 18%.

The reference to the diesel scandal admitted by the biggest carmaker company in Europe. Volkswagen had to pay a heavy fine of 18.4 million US Dollar. Not only this, the company has also stated in its annual report that it may need to sell its assets in order to cover its legal costs. However, the company has also stated that it had already provisioned for its diesel emission scandal (Thomson 2015). The company cannot figure out the ultimate cost of legal risks and proceedings related to administration and as a result further financial liabilities could arise in the due course of time. This means that there would be decrease in the Assets of the company and on the other hand an increase in the liabilities in the same time.

According to the investigation of the US Environmental Protection Agencies, it was found that the Volkswagen deliberately installed software in their diesel vehicles in order to cheat emission test. By September 2015, more than 11 million of those vehicles were already on road worldwide. As a result of this, the emission of Nitrate Oxide have increased 10 to 40 time than that of allowable level. It was estimated that with more than 480,000 cars that were effected, 10,000 to 40,000 tons of extra Nox was released in the US. A penalty of $18.4 million was imposed on the company and in order to meet the amount the company was forced to sell some of its assets. According to some reports, it was also found that injection of such high levels of Nox could also cause premature death (Cullingford and Blewitt 2013).

The Sustainability reporting is a report of an organization about its impact on environment, economic and social conditions due to daily activities of the organization. But it will be beneficial for the company if the sustainability report is converted into accounting terms. In the year 2011, Puma published its Environmental Profit and Loss account or Statement of profit and loss for the year 2010 which helped the company to identify and manage risk along with sharpening its focus to chase viable business opportunities.

The leger is the complete record of the financial transaction of the company. The accounting information that are necessary for preparing the financial statement are included in the ledger. The general leger incudes assets, liabilities, revenue, expenses and equity (Kamp et al. 2016). The entire process of preparing the financial statement begins with the posting in the general leger. In the beginning, the transactions are initially posted in the general ledger so that the trial balance is generated. Then trial balance are then adjusted to generate the financial system. The main four features of the general ledger are:

• Reflects the effect of general journal record.
• Is useful in generating the financial statement;
• It is useful in detecting errors;
• It is the main component of marinating systematic accounting records;

Reference

Ball, A., Grubnic, S. and Birchall, J., 2014. 11 Sustainability accounting and accountability in the public sector. Sustainability accounting and accountability, p.176.

Bebbington, J., Unerman, J. and O’Dwyer, B. eds., 2014. Sustainability accounting and accountability. Routledge.

Cullingford, C. and Blewitt, J., 2013. The sustainability curriculum: The challenge for higher education. Routledge.

Deegan, C., 2014. An overview of legitimacy theory as applied within the social and environmental accounting literature. Sustainability accounting and accountability, pp.248-272.

Kamp, A., Morandi, F. and Østergård, H., 2016. Development of concepts for human labour accounting in emergy assessment and other environmental sustainability assessment methods. Ecological Indicators, 60, pp.884-892.

Sands, J. and Lee, K.H., 2015. Environmental and sustainability management accounting (EMA) for the development of sustainability management and accountability [Guest editorial]. Issues in Social and Environmental Accounting, 9(1), pp.1-4.

Thomson, I., 2015. ‘But does sustainability need capitalism or an integrated report’a commentary on ‘The International Integrated Reporting Council: A story of failure’by Flower, J. Critical Perspectives on Accounting, 27, pp.18-22.

Wood, R., Stadler, K., Bulavskaya, T., Lutter, S., Giljum, S., de Koning, A., Kuenen, J., Schütz, H., Acosta-Fernández, J., Usubiaga, A. and Simas, M., 2014. Global sustainability accounting—developing EXIOBASE for multi-regional footprint analysis. Sustainability, 7(1), pp.138-163.

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