Question

3. Based on your findings, provide two (2) recommendations to the Australian financial reporting regulators about the future of CSR reporting that will guide Australian public entities in the future.

Answer 1

The concept of Corporate Social Responsibility (CSR) is generally understood to mean that corporations have a degree of responsibility not only for the economic consequences of their activities, but also for the social and environmental implications

Human rights are relevant to the economic, social and environmental aspects of corporate activity. For example, labour rights requiring companies to pay fair wages affect the economic aspect. Human rights such as the right to non-discrimination are relevant to the social aspect. And the environmental aspects of corporate activity might affect a range of human rights, such as the right to clean drinking water.

So, while the primary responsibility for the enforcement of international human rights standards lies with national governments, there is a growing acceptance that corporations also have an important role to play.

The only way to survive the next wave of innovation will be to better understand and engage with our natural, social and financial resources

. Work Health & Safety: The Work Health and Safety legislation in each State provides that any person conducting a business owes significant duties to ensure the health and safety of employees and other people who may be put at risk as a consequence of the business activities.
. Fair Work: The Fair Work Act provides that employees are granted a safety net of minimum statutory employment conditions and, for many employees, the right to make a claim for reinstatement or compensation if they are unfairly dismissed from employment (that is, the dismissal was harsh, unjust or unreasonable and involved an employee under the wage threshold). All employees are protected from unlawful termination (that is, a termination for discriminatory reasons).

Over 90% of the world’s largest corporations today report on their sustainability performance using standards developed by GRI, the most widely adopted framework for sustainability reporting. The recent letter to CEOs by Chairman and CEO Larry Fink of BlackRock, the world’s largest investment firm, in which Mr. Fink called on corporate leaders to “make a positive contribution to society,” exemplifies how the corporate responsibility movement has gone mainstream.

A new tools based on big data and machine learning such as the Arabesque S-Ray technology enable a systematic application of ESG information for both investors and corporations. This holds the promise to relocate capital away from less sustainable companies toward more sustainable ones, thus greatly accelerating the transition towards low carbon and cleaner, healthier and socially more inclusive business practices.