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Sustainability accounting report
- 1. Presentation on Sustainability Accounting Reporting: An analysis on DSE listed Pharmaceuticals company
- 2. S.H.E Group Members’ List : Name Umma Hania Talimaton Islam Shahina Akter Rian Binte Kamal Sumya Mahmud Tafannoom Chowdhury
- 3. Sustainability: • Sustainability means satisfying the present needs without trading off the capacity of future generation to fulfill their own demand. (United Nations World Commission on Environment and Development, 1987,P.8)
- 5. Sustainability Reporting • The process of Sustainability reporting is to support company in understanding the relation between Sustainability factors, company plans & strategy, objective setting, measurement of performance and managing the variation towards a sustainable international economy which integrate profitability with social responsibility and environmental protection.
- 6. Difference between sustainability and CSR: Elements CSR Sustainability 1. Vision Looks backwards. Looks forward 2. Targets Target opinion formers Targets the whole value chain 3. Business About Compliance About business 4. Management managed by communications teams. Sustainability by operations and marketing. 5. Reward Rewarded by politicians. Rewarded by the City 6. Drive Driven by the need to protect reputations in developed markets. Driven by the need to create opportunities in emerging markets.
- 7. Difference between Financial Reporting & Sustainability Reporting: Elements Financial Reporting Sustainability Reporting Time-scale The reported year Future orientation Focus Issues that organization directly controls Wider sustainability impacts Economic view Material Intangible Data Financial Non-financial Materiality Financial significance Any information that is significant to readers Users Shareholders and investors Stakeholders
- 9. Literature Review • Higher visibility among consumers , greater concern to improve the corporate image through social responsibility information . [Branco and Rodrigues(2006) ] • The most influential variable for explaining firms’ variation in CSR ratings -media exposure, followed by size and industry. .[Reverte.C(2008) ] • The most significant variable that influences the level of CSRdisclosure is government ownership.[Said et all.(2009)]
- 10. • Respondents require disclosure of an overview of environmental risks and impacts, the environmental policy, performance against measurable environmental targets and information on a range of environmental costs. Most shareholders require environmental disclosures to be audited. [ ( Villiers and Staden,2010 ) ] • Environmental disclosure is positively linked to environmen-tal performance. High quality environmental dis- closers display effective corporate governance and would tend to face less difficulties in accessing capital markets.( Iatridis.G,2012)] • Environment, society and economy are not unified entities: rather they are fractured and multi-layered and can be considered at different spatial levels. They are interconnected, with the economy dependent on society and the environment while human existence and society are dependent on, and within the environment. [ Giddings et all.(2001)]
- 11. Shahina Akter
- 12. Buhr (2007) – “ The process begins with employee reporting and then moves on to social reporting, envirnomental reporting and lastly sustainability reporting.” What are the benefits of reporting? For organizations the main benefits are: • identification and management of key risks and opportunities • enhanced reputation among stakeholders • improved brand value • customer attractiveness • competitiveness and market position • employee attraction and retention
- 13. Guidelines in Sustainability Reporting • The Global Reporting Initiative (GRI) • The Sustainability Integrated Guidelines for Management project (SIGMA) • The United Nations Global Compact (UNGC) • The International Standards Organization (ISO) • World Business Council for Sustainable development (WBCSD)
- 14. GRI: - A non- profit organization Mission : to make sustainability reporting standard practice. To enable all companies and organizations to report their economic, environmental, social and governance performance WBCSD : - Providing companies with clarity of principle - Giving companies a practical guidance on sustainability information - Improving the effectiveness of non- financial reporting through reporting matters SIGMA : - Launched in 1999 in UK which compliments the GRI guidelines. - Consists of a set of guiding principles and a management framework. UNGC : A policy platform and practical framework for the companies who are committed to sustainability and responsible business practices. Recently in September 2016, GRI and UNGC are united to achieve SDGs.
- 15. What is Assurance ? Assurance is a third-party review of the reliability of a sustainability or corporate responsibility report. Best practice also includes confirming the report focuses on the right things (material issues). Why to give assurance? - To evaluate the accuracy and relevance of report - To improve stakeholder communication - To strengthen internal reporting and management systems - To increase recognition, trust and credibility - -Reduced risk and increased value
- 16. Who Are Assurance Service Providers ? Accountancy Firms Sustainability Firms Engineering Firms
- 17. International Assurance Standards – ISAE 3000 developed by IAASB in 2005 focusing on procedures for evidence gathering and assurer independence AA1000AS developed by AccountAbility firm in 2003 focusing on whether the sustainability reporting of organization respond to stakeholder concern
- 19. Rian Binte Kamal
- 20. Research Methodology: Our research was done over top 11 leading pharmaceutical companies in Bangladesh. Only two of them namely Square Pharmaceuticals & Beximco Pharma are US FDA approved. Steps: 1. Identified major pharmaceutical company 2. Analyzed annual reports & identified components of sustainability reports 3. Identified whether they follow GRI guideline, if not which guidelines they follow 4. Identified Social, Economic & Environmental elements 5. Summarized all facts
- 21. Why Pharmaceutical industry? . Solving the access puzzle . No research based on solely pharmaceutical industry . Pharmaceutical industry major source of medical innovation. . It is also a heavily regulated industry
- 22. Sample Selection: This research was done over 10 pharmaceutical companies . They are as follows: Name of the company overview Square US FDA certified, Market leader, focus on local areas. UK MHRA approved GlaxoSmithKline Renowned company worldwide, approved by medical association Eskayef Acquired by Transcom in 1990, operated in Dhaka ACI Leading pharmaceutical company RENATA approved by medical association BEXIMCO US FDA approved, focuses on local and international market ACME Part of ACME group General One of the oldest company in Bangladesh Orion New pharmaceutical company , quickly grabbing market share Pharma Aids One of the oldest company Beacon Approved by medical association
- 23. Serial No Company Name Sustainability reporting Reporting Start Date Guidelines/Policy Followed Environmental Disclosure Social Disclosure Economical Disclosure 1 Square YES 2010 1)UN Global Guideline 2) Corporate Governance Guideline 3) WTO regulation YES YES YES 2 GlaxoSmithKline YES 2010 Corporate Governance Guideline First Line Leaders YES YES YES 3 Eskayef YES 2010 Corporate Governance Guideline YES YES YES 4 ACII YES 2010 1)UN Global Guideline 2)Safety, Health and Environment(SHE)Policy 3) Corporate Governance Guideline YES YES YES 5 RENATA YES 2010 Corporate Governance Guideline YES YES YES
- 24. 6 BEXIMCO YES 2010 Corporate Governance Guideline YES YES YES 7 ACME YES 2012 1)WHO Guideline 2) Corporate Governance Guideline YES YES YES 8 General NO(does Not disclose anything about sustainability) N/A N/A N/A N/A N/A 9 Orion YE S ( yes PDF available) Su stainability 2016 GRI (G3) Sustainability Reporting guidelines. yes yes yes 10 Pharma Aids ltd. NO N/A N/A N/A N/A N/A 11 Beacon No N/A N/A N/A N/A N/A
- 26. SUMYA MAHMUD
- 27. Table 2 Company Name Environmental Disclosure Social Disclosure Economic Disclosure ACI YES They disclosed about: 1)Environmental Policy 2)Environmental Management System YES They disclosed about: 1) Corporate social Responsibility YES Under this section they disclosed about: 1) Employees economic benefit RENATA YES They have said few words only that they care about the environment. YES They disclosed about: 1) Corporate social Responsibility YES Under this section they disclosed about: 1)Support to charitable organization BEXIMCO YES They disclosed YES They disclosed Yes Under this section they
- 28. Table 2 (cont.) Company Name Environmental Disclosure Social Disclosure Economic Disclosure Orion Pharma Ltd. YES They disclosed about: 1)Waste Management 2)Air pollution 3)Control YES They disclosed about: 1) Corporate social Responsibility 2) Ethical issues. YES Under this section they disclosed about: 1)Value Added Statement(VAS) 2)Economic Value Added Statement(EVAS) 3)Employees Training General Pharmaceuticals council NO NO NO
- 29. Findings Our findings say that: 1) 3 companies out of these 11 pharmaceutics companies in our sample did not provide sustainability reporting in 2016.This means that 72.72% in our sample companies chose to report their sustainability reporting. 2) 1 out of 11 companies follow GRI standard to prepare their sustainability report. 6 out of 11 companies follow corporate governance guideline in order to prepare their sustainability reporting. We also find out that there are 3 companies who not only follow one guidelines but also follow 3 guidelines at a same time. The guidelines they are follow along with corporate governance guidelines are UN global guidelines, WTO guideline and SHE policy.
- 30. Findings(cont.) 3) Our 3rd finding is about the disclosure of Environmental Social and Economic factors. our findings is very much similar to our first findings .72.72% companies are disclosed about all these factors. which implies that those who report about sustainability they all report about all these factors. But question arise that did all the companies disclosed same quantity and quality of information about these factors. The answer is NO and our rest of the findings is based on it. 4)we find that 45.45% companies disclosed about employee training. which is a factor of Economic Dislosure
- 31. Findings (cont.) 5) 72.72% companies disclosed about CSR which is a factor of social disclosure. 6)4 companies among 11 companies disclosed about disclosed about VAS and EVAS.
- 33. Recommendations: Awareness building initiatives need to be undertaken for various stakeholder communities, both at the firm level as well as sector level. Can follow GRI framework as it is globally acceptable framework Government's initiative through policy initiatives immediately can pave the way for a sustainable society committed to sustainable development. Special training programs can be arranged for the employees to increase the skill and efficiency of accountants on sustainable disclosure The Sustainable Accounting Standard Board (SASB) in Bangladesh can be formed to formulate the sustainable reporting indicators for assuring the representation of all parties’ contribution.
- 34. Conclusion: On the basis of the study we find that almost every pharmaceutical companies are showing environmental, social and economic activities in their annual reports. Maximum company's started this trend after 2009 or 2010. Many of them follow some polices and guidelines but they are not globally accepted guidelines. So we are recommending the pharmaceutical industries to follow GRI guideline as it is a globally accepted guideline again the government should take proper steps for the implementation of this process.
- 35. References C.Yang, Y. G. (2014). Sustainability Accounting Reporting: A survey on 30 US Dow-Jones Companies. International Journal of Accounting and Taxation, 15. al, M. H.-U.-Z. (2010). Corporate Sustainability Reporting of Major Commercial Banks in line with GRI: Bangladeshi Evidence GRIwebsite:https://www.globalreporting.org Sustainability Reporting- External Assurance matter(https://www.globalreporting.org/resourcelibrary/GRI_Trends-in-External-Assurance-of- Sustainability-Reports_July-2014.pdf) “Sustainability reporting under Global Reporting Initiative (GRI)” The Cost and Management , volume-43, Number-5, September-October,2015
- 36. Manuel Castelo Branco, Lúcia Lima Rodrigues, (2006) "Communication of corporate social responsibility by Portuguese banks: A legitimacy theory perspective", Corporate Communications: An International Journal, Vol. 11 Issue: 3, pp.232-248, Carmelo Reverte,(2009)”Determinants of Corporate Social Responsibility Disclosure Ratings by Spanish Listed Firms” Journal of Business Ethics ,Volume 88, Issue 2, pp. 351– 366 Roshima Said, Yuserrie Hj Zainuddin, Hasnah Haron, (2009) "The relationship between corporate social responsibility disclosure and corporate governance characteristics in Malaysian public listed companies", Social Responsibility Journal, Vol. 5 Issue: 2, pp.212- 226, George Emmanuel Iatridis,(2013)”Environmental disclosure quality: Evidence on environmental performance, corporate governance and value relevance”,Emerging_Markets_ReviewVol.14, Issue :1, Pages 55-75 Giddings, Bob, Hopwood, Bill and O'Brien, Geoff (2002) Environment, economy and society : fitting them together into sustainable development. Sustainable Development, 10 (4). pp. 187-196.