Ethics, CSR, CSD Flashcards
ethics
inner guiding principles, values and beliefs used to analyse and interpret a situation to decide what is right or wrong
code of ethics
document outlining company’s core mission and values, explaining how an organisation and its employees are expected to conduct themselves and uphold company values
ethical issues
- between business owners and customers such as providing misleading information and invasion of privacy in regards with customers information
- between investors and customers such as investing in high risk ventures and not disclosing the risks involved
- between suppliers and customers such as gift acceptance from suppliers as lubrication practice
- between employees and customers such as pay gap between male and female and foreign employees being treated differently in terms of low wage and poor working conditions
- unsustainable production practice that may pollute the air and unsustainable handling of waste products
corporate social responsibility
responsibility of a business for the impacts of its activities on the environment, consumers, employees and communities
benefits of CSR & CSD to public companies
- attracts quality staff who wants to work with strong CSR and employees who want to do the right thing are happier and have higher morale
- production costs may be reduced due to conscious effort to reduce energy, wastage and consumption
- increase sales as it attracts customers who share the same values as them
- attracts potential investors and shareholders who want to invest in companies who shares the same values as them
CSR costs or challenges
- lack of time
- lack of finance
- lack of knowledge
- difficulty in sourcing environmentally friendly materials
- having to train employees to adopt new ways can be a burden
incentives to adopt CSR & CSD
- being socially responsible attracts good public relations and free publicity
- CSR as a form of self regulation prevents government intervention
- economic aspect such as being seen in good light through CSD brings benefits
- cost of resources will increase if natural resources become increasingly scarce due to poor sustainability practices
corporate social disclosure
reporting of environmental and social elements of company operations to a wider group of stakeholders than those just interested in financial reporting
stakeholders
- potential investors want to invest in companies who share the same values with them and which are ethical
- customers prefer to purchase goods or services from companies or suppliers aligned with their CSD policies or ethical values
- government agencies may use the company’s CSD reports to decide whether to grant licenses, mining rights and exploitation permits
contents of CSR or sustainability reports
- economic component which includes more traditional data
- social component which includes disclosure on social issues
- environment component which includes disclosure on impact of entity’s activities
limitations of CSD
- reports are non comparable between companies as they tend to minimise negative CSD and maximise positive CSD, making it difficult to compare between companies
- lack of expertise, cost and time consumption where accountants are given task to do CSD even though they are not experts in reporting environmental and social information
- difficulty in measurement as many inputs and impacts are not directly measurable and are more descriptive in nature
CSD in Australia and Global Reporting Initiative
- Australian government developed a CSD guide which provides a framework aligned with GRI
- GRI is an organisation based in Netherlands with the objectives of enhancing quality and utility of sustainable reporting
- CSD guide outlines 5 environment management indicators and 11 environment performance indicators
