Sustainability and Modern Businesses

Sustainability is a major challenge in the modern day business. In order to ensure the long term growth of the company, it is essential that sustainability strategies are introduced by the firm in their functioning (Rowe, et. al. 2014). There are several types of stakeholders involved in any process for sustainability. Wesfarmers is one of the biggest Conglomerates in Australia and it is in the business of several types of products. In terms of revenue, it is the biggest firm having large numbers of stakeholders attached with it. In order to maintain its growth and sustainability in the market, it is essential that company focuses on its sustainability strategies. This report analyses the sustainability of Wesfarmers by analysing the sustainability strategy of the firm. It also explains the key stakeholder the Wesfarmers engages with as well as it describes the sustainability performance of the cited firm.

In Wesfarmers sustainability has been the major concern for very longer period of time. Each of their business strategy has a strong influence of sustainability. In their growth strategy which is the major part of their business strategies they have taken care of the sustainability. This can be confirmed from the fact that Wesfarmers wants to create diverse and inclusive employee strength. This will provide them with an opportunity to drive strong and sustainable returns (Qian, Kaur and Schaltegger, 2018). They are promoting environment that retains, attracts, promotes talents having huge amount of experience and strength. Since they are focusing on innovation and creativity hence promotes diversity in their different teams. Apart from this in order to ensure long term growth they have paid their suppliers with $46.4 billion.

In terms of their product differentiation strategy, they have also taken care of sustainability. For example they have concentrated on innovation as they understand the value of innovation and creativity in the sustainability of the company. Wesfarmers believes in investing in innovations that provides long term benefit to the broader community (Sullivan and Gouldson, 2017). They have given grants up to $20000 to help on-farm innovations and improvements. These innovations have helped the in bringing diversified range of products. The research has been promoted to highest of levels within the organisation.

Acquisition which is another crucial business strategy used by Wesfarmers in various parts of the world has also been done checking the risks that are present in the business environment. In 2017, there are no major acquisitions done by Wesfarmers. They have been doing acquisition of new technologies (Hunt and Eburn, 2018). For example they have acquired new energy-using equipment. It will be using expected energy costs of expected market prices plus a charge linked carbon dioxide that would be released when there would be combustion of fuels. Along with this, they have been using due diligence procedures for disinvestments and acquisition.

Wesfarmers and Sustainability Strategies

Being such a large firm, they have large numbers of stakeholders. In the sustainability process, Wesfarmers are engaged with many types of stakeholders. They have involving all their stakeholders in their decision making. Some of the major stakeholders that firm engage with are:

• Government: In their sustainability, government is playing a very important role. All the policies that are made by different governments in different parts of the world have been taken care of. They have also adopted United Kingdom’s modern slavery Act 2015.
• Retailers: Huge numbers of retailers are associated with the company. They have been investing in the sourcing of forest products.  The initiatives taken by the Wesfarmers have allowed the retailers to come with them and hence promote better environmental conditions for labours in the global home development supply chain (Moody, 2017).  They have made a collaborative framework that aims to make the business process easier and hence delivery of products to the customers can be done easily.
• Non-government: Since there is peer pressure from the non-governmental organisation to follow the environmental norms hence it is crucial that company manage the sustainability in a better manner. They have involved these non-government institutions in the decision making.
• Industry associations: There are many partners of the Wesfarmers and hence in order to ensure their long term sustainability they have good relations with these associations (Sustainability Report, 2017). In availing new resources and capabilities these types of associations are very much helpful.
• Farmers: They have a strong association with the farmers hence they their profits in mind. It will also help the firm in reducing the overall cost of the operations. This is also essential for looking at the environmental factors that are present in the world.
• Customers: The innovative projects that they have undertaken have concentrated on customers. They are doing heavy research so as to understand the demands of the consumers and hence fulfilling it.

The sustainability report of the Wesfarmers suggests that there are many areas where the sustainability performance of the firm is better. Their sustainability report suggests that company has performed well in terms of the diversity management. Since the company operates in many parts of the world hence they need to ensure that they have a high standard diversity management plan.  For example their 4321 employees are from the indigenous community. This has increased from the last year. In terms of gender balance they have around 54% employees as women and 46% as men. 47% of the women have salaried role while the other 56% are working on award or enterprise bargaining agreement roles (Colla, 2017). They believe in creativity hence they have focused towards diversity. They foster inclusive culture to nurture the individual’s skills. They have worked well on talent management, enhancing recruitment practices and ensuring pay equity. This is reason why they have been successful in reducing the employee turnover.

Apart from this they have also improved their performance in terms of the ethical sourcing and human rights. They have improved the transparency of their supply chain with around 5,455 factories. They have audited all these factories on the basis of ethical standards. In terms of sourcing also they have performed well especially in terms of selling fresh food items. They have provided many kinds of funds for their farmers specially the once that are linked with diary industry. They have also invested towards the sustainable farming of Cocoa (Lydon, 2017). This will help the company in ensuring the sustainability of the company in terms of availability of fresh raw materials. Coles have partnered with leading environmental consultancy to carry on with Australia’s first on-farm carbon foot printing assessment of producers of beef utilising the methodology that is approved by carbon trust. They have increased the supply chain transparency.  They have invested a lot in community development programs especially the contribution to education and community has been huge. They have also worked well on reducing the use of water in their business process i.e. by around 16,000 mega litres (About Wesfarmers, 2018). In recycling of waste also they have performed well.

Wesfarmers Stakeholders

Analysis the annual report on sustainability of the Wesfarmers, it was found that there were certain areas where the company has not performed well. The report shows that in spite of company huge efforts towards building safe workplace, it lagged in terms of employee safety as. They have reduced the number of recordable injuries but still the numbers are too large. They have also not performed so well on addressing the environmental concerns. In terms of climate change resilience, they have failed largely. They have reduced the greenhouse emission from their operations by 16% over the last five years but the condition is still critical. There is slow cost reduction in the low carbon technologies (Campbell, 2017).

Along with this they need to invest a lot on the supply chain management so as to ensure that there is least wastage of the resources. Their product safety initiatives have also performed poor till now and hence had effect on sustainability performance of Wesfarmers. In terms of resource planning also they have not performed so well. They need to focus more on the farmer’s development program especially the farmers that are related to fresh fruits and Vegetables market. This is because their competitors such as Woolworths have invested heavily in terms of farmer’s development so that they can ensure long term relationship with their primary suppliers (Kilroy and Schneider, 2017). Apart from this company has also performed badly in terms of risk management strategies for future. They have not mentioned any long terms plan for the growth of the company in the new markets as well as about the new product development or innovation projects.

The quality of the sustainability report of the Wesfarmers can be evaluated based on different aspects and frameworks. It has become essential for the organisation to understand the laggings in the sustainability report.

Readability

The readability of the report is good and aims to target all the section of the business process. There are different types of data presented in an appropriate manner. The report is highly specific and touches the good areas of performance of the company but it lagged to showcase the areas of performance were the company has lacked. The readability can also be said to be excellent in terms of the logical structuring as it can be seen that a summary type performance is given in the start of the report but at the same time it also addresses each of these criteria in a detailed manner. There is also graphical representation of data as well as there are charts and figures so as to give the exact details about various things. There is slightly lesser use of drawings to show the idea about the things that is being discussed. Explanations about the various features of sustainability have been provided appropriately (Phillipov, 2017). On the other hand there is less use of tools that can help to navigate easily. It also lags in terms of presenting people’s reviews and feedbacks.

Sustainability Performance of Wesfarmers

Adoption of GRI framework

GRI standards have been followed effectively so as to make the sustainability report as per the industry standards. They have adopted each and every index of the GRI framework in their sustainability report. This can also be understood by the fact that all the standards that is mentioned in the GRI framework has been clearly adopted. For example the data about information on employees and workers, supply chain. In terms of precautionary principles or approach they do not clearly states anything but they have well established risk management approach stated in the report. While addressing external initiatives they have followed UN global compact and UN guiding principles on Business and Human Right Framework. In membership of associations they have many non-governmental organisations as partner (Wesfarmers, 2018). They have provided MD’s welcome statement. For identifying the major risks and opportunities, the report provides ethical sourcing and human rights. In terms of values, standards, principles and norms of behaviour, they have ethical sourcing and human rights as well as governance. Executive-level responsibility for economic, environmental and social topics has been addressed through the help of stakeholder’s engagement program. They have also elaborated each and every aspect of the governance. Apart from this they have reported everything about the practices in the workplace. They have also given independent assurance statement.

Conclusion

From the above based report, it can be concluded that sustainability is a major issue for the Wesfarmers. They have adopted sustainability for each of the strategies they have made for themselves in their growth. Each level of the growth strategy includes the aspects related to the sustainability. Apart from this, Government, Retailers, Non-government, Industry associations, Farmers and Customers are some of the major stakeholders with whom Wesfarmers is engaged with in addressing the sustainability. Diversity, ethical sourcing and human rights are some of the areas on which company has performed well while the company has not performed well in safety of employees. The readability of the report is good and at the same time the report has adopted GRI framework in the report hence everyone can easily understand the report. Hence the quality of the report is good.

References

About Wesfarmers,(2018) Wesfarmers. Online. Available at: https://sustainability.wesfarmers.com.au/our-report/about-wesfarmers/. [Accessed on 13^th October 2018]

Campbell, J., 2017. Insights from the company monitor: Wesfarmers. Equity, 31(8), p.16.

Colla, A., 2017. Corporate governance in 2017: Failures and wins. Governance Directions, 69(4), p.217.

Hunt, S. and Eburn, M., 2018. How Can Business Share Responsibility for Disaster Resilience?. Australian Journal of Public Administration, 77(3), pp.482-491.

Kilroy, D. and Schneider, M., 2017. Valuing the Current Strategy. In Customer Value, Shareholder Wealth, Community Wellbeing (pp. 109-141). Palgrave Macmillan, Cham.

Lydon, J., 2017. Anti?slavery in Australia: Picturing the 1838 Myall Creek Massacre. History Compass, 15(5), p.e12330.

Moody, W., 2017. Overview of Western Australia’s coal industry. Energy News, 35(1), p.14.

Phillipov, M., 2017. Media, Supermarkets and the Strategic Manufacture of Consumer Trust. In Media and Food Industries(pp. 155-192). Palgrave Macmillan, Cham.

Qian, W., Kaur, A. and Schaltegger, S., 2018. Managing Eco-efficiency Development for Sustainability: An Investigation of Top Carbon Polluters in Australia. In Accounting for Sustainability: Asia Pacific Perspectives (pp. 103-124). Springer, Cham.

Rowe, A.L., Nowak, M., Quaddus, M. and Naude, M., 2014. Stakeholder engagement and sustainable corporate community investment. Business Strategy and the Environment, 23(7), pp.461-474.

Sullivan, R. and Gouldson, A., 2017. The governance of corporate responses to climate change: An international comparison. Business Strategy and the Environment, 26(4), pp.413-425.

Sustainability Report, (2017) Wesfarmers. Online. Available at: https://sustainability.wesfarmers.com.au/media/2464/2017-wesfarmers-sustainability-full-report.pdf. [Accessed on 13^th October 2018]

Wesfarmers, (2018) GRI content Index. Online. Available at: https://sustainability.wesfarmers.com.au/our-data/gri-content-index/. [Accessed on 13^th October 2018]