Contemporary issues in sustainability reporting: Universities in Australia
Abstract
This research proposal is prepared to conduct a study highlighting the contemporary issues faced by Australian universities during sustainability reporting. Sustainability reporting among the Australian universities has become a common practice and there is a lot of research conducted on the subject of sustainability reporting and its relevance. The universities are the source of new knowledge and also responsible for the diffusion of this knowledge among the members of the society. They train the future professionals and leaders and therefore, they bear the responsibility of promoting the concept of sustainable development and present disclosures detailing not just their financial performance but also varied information of the value created by them to legitimize their position in the society. These findings will also be important for the universities operating in any other part of the world facing similar challenges. The recommendations presented in the report can provide the universities, the regulators and the stakeholders with measures to contribute towards the improvement of the quality of sustainability reporting and enhance the assurance practices that are currently adopted by them.
Introduction
This research proposal is prepared to conduct a study highlighting the contemporary issues faced by Australian universities during sustainability reporting. There is a growing demand throughout the world by all the significant market segments that are making the organisations responsible for providing information about their sustainability initiatives that is trustworthy. Sustainability reports have become an essential communication channel for the organisations to interact with their internal and external stakeholders and the reporting process for the universities is not just restricted to the presentation of the report of the financial performance. The proposal presents the readers with an overview of the background of the issue and the research gap and motivation behind this study. The problems and objectives of the study are also stated in the proposal along with highlighting the significant contribution that will be made by the findings of this research (ACCA, 2010). The conceptual framework and the hypothesis formulated for the study along with the methodology followed for carrying out the research also forms a part of the proposal and it ends with presenting the limitations of this research.
Research background
Universities are the organisations that are responsible for providing higher education and preparing our future leaders. It is expected that these institutions will play an essential role in informing and educating our future leaders about the concept of sustainability. The universities in Australia have already taken up this challenge and have started integrating sustainability in their operations, reporting practices and research avenues. This is done to ensure that the leaders of tomorrow will take actions that enable our society to progress towards sustainable development. Sustainability reporting among the Australian universities has become a common practice and there is a lot of research conducted on the subject of sustainability reporting and its relevance (Melzatia, 2018). Different universities make use of different guidelines for the preparation of their sustainability reports fulfil the social contract that they have with the community and the society in which they operate. Sustainability reporting is important as it provides assurance that the decisions taken by the organisations and their operations are consistent with the norms set out by the society and the expectations of their internal and external stakeholders. The preparation of a sustainability report requires the organisations to disclose the impact that its operations have on the community, the environment and the society at large. This helps in putting them as legitimate and also enables them to achieve a competitive advantage by convincing their present and future investors (Gamage & Sciulli, 2017). The major benefits of sustainability reporting for an organisation include:
Improved business decision making
By identifying the opportunities and threats for the organisation, the decision-makers can better understand and anticipate the internal and external environmental factors of the business and improve their decision-making. Sustainability reporting broadens the outlook the decision-makers of the organisation improving the results of the process followed for considering the options and making the optimum choice.
Enhancing the stakeholder trust in the company
Quality sustainability reporting is detailed and provides an overview of all the initiatives that the organisation has undertaken throughout the year. This increases transparency and helps in building more trust for all the internal and external stakeholders of the company (Karis & Pöysti, 2013).
An effective tool for risk management for the organisations
Sustainability and risk management for the organisation goal hand in hand as the process of obtaining sustainability is about getting a better understanding of the resilience of the company and entering better partnerships that help in shaping and improving the future operating environment of the business. Sustainability reporting enhances the possibility of identification and improved prioritisation of risk enabling the decision-makers to develop mitigation Strategies for the same.
Generating more savings for the business
In order to stay operational, it is important that business organisations generate profits and returns for the stakeholders. The modern business environment is full of uncertainties and sustainability reporting enables the organisation to make better investment decisions that help in long-term capacity building and development of stronger strategies that generate more profits for the business (Palit, 2018).
Show me the common reasons why the organisations practice sustainability reporting include creating a competitive position in the emerging landscape of sustainability reporting for the business, providing the stakeholders with the hollow stick overview of the initiatives carried out by the organisation with regard to the environment, human and social capital and to address the needs and requirements of the internal and external stakeholders of the company beyond the needs fulfilled by the financial and the annual report of the company (IFC, 2017). The preparation and presentation of the sustainability report by the organisation ensure that the members of the organisation and its decision-makers are concerned about the impact that the operations are having on the sustainability issues and also provide them with an opportunity to become more transparent and talk about the opportunities and risks associated with their operations. The sustainability reports also allowed the organisations to present the stakeholders with a more credible and tangible demonstration of the measures taken by them towards sustainability positioning themselves as a responsible organisation. These reports allow the organisations to build more trust among the stakeholders resulting in strengthening the bottom line of the company (EYGM Limited, 2014).
Research gap and motivation
The report of the financial performance of an organisation only presents the stakeholders of the company with a partial view of the overall value created by the organisation. With the increasing concerns associated with pollution, greenhouse gas emission, global warming and climate change, the internal and external stakeholders of the organisations are increasingly emphasising on getting the information associated with the social and environmental performance indicators for the organisations. Traditionally, the universities are considered to be places that help in carrying out intellectual enquiries and that contribute to the advancement in the knowledge acquired by mankind. Therefore, it is expected that as an organisation, the universities should fulfil these Expectations of the internal and external stakeholders by presenting a Holistic view and detailed information about their sustainability performance and impact that their operations have on the environment and the society. This research report is presented to highlight the most significant challenges that are faced by universities in Australia when publishing their sustainability reports. This will be done by analysing the nature of the disclosures made by the universities and the quality of sustainability reporting providing implications for the Universities and their decision-makers to take steps to address these challenges and contribute to the global goal of sustainable development (Azizi, Bien, & Sassen, 2018). There is a lot of research conducted to present the variables that impact the disclosure practices in terms of sustainability reporting for the organisations but the research associated with the sustainability reporting practices of the Australian universities is mostly limited to analysing the areas covered in the reports. This research aims to fill the gap in the academic literature by highlighting the contemporary issues faced by the universities when preparing their sustainability reports and deciding the disclosure practices (Jorge, Andrades, & Jesus, 2018).
The current practices and approach of the society towards embracing sustainability can be influence and shaped by the universities as they play an essential role in the overall development of the society. Sustainability reporting serves as a voluntary tool that enables the organisations to disclose all the efforts made by them to ensure that their actions contribute towards sustainable development. The stakeholders of the organisations throughout the world are scrutinizing the activities and the business decision making and are also demanding them to share the information about their contribution towards the creation of a society that a sustainable (Ceulemans, Lozano, & Alonso-Almeida, 2015). The growth in awareness about sustainable development and its significance has contributed to various empirical studies examining the quality and the extent of sustainability reporting. The stakeholders are also demanding greater commitment by the organisations by presenting the information about the environmental and social actions taken by them associated with sustainable development (Heilmayr, 2006). The universities are the source of new knowledge and also responsible for the diffusion of this knowledge among the members of the society. They train the future professionals and leaders and therefore, they bear the responsibility of promoting the concept of sustainable development and present disclosures detailing not just their financial performance but also varied information of the value created by them to legitimize their position in the society (Lozano, Llobet, & Tideswell, 2013).
Research problem and objectives
The purpose of this study is to analyse the current conceptual framework adopted for practising sustainability reporting by the organisations operating in Australia and to analyse the various challenges faced by them during this process. This research also plans to identify the contemporary issues arising in the sustainability reporting practices by carrying out extensive literature review and analysis of the sustainability reports published by the universities in Australia. The specific issues identified for the sustainability reporting by the universities in Australia and the research questions developed on the basis of it are:
RQ1: What is the impact of inconsistent measurements and disclosures in sustainability reporting for Australian universities?
RQ2: What is the impact, if any, the motivation and desire for compliance with sustainability reporting practices by the Australian universities?
RQ3: What is the impact of making sustainability reporting practices being voluntary for Australian universities?
RQ4: What is the impact of the lack of comparability in sustainability reports prepared by Australian universities?
RQ5: What is the impact of the lack of reliability in sustainability reports prepared by Australian universities?
Significance of the study
Increased accountability and transparency are the two forces that are driving the business landscape throughout the world. Better corporate reporting of the sustainability initiatives of the business helps in providing the investors, customers and other stakeholders of the organisations with useful information to support the decision-making process adopted by them. Quality sustainability reporting by the universities can enable all the stakeholders of the universities to get trustworthy information on how they are willing to fulfil their corporate social responsibility and make efforts for better social, environmental and governance performance. The sustainability report presented by the universities can be used as the basis for the development of future policies and also provide the business leaders and the decision-makers of the organisations with the practices that have been successful in the past and that have presented them with positive results (Schoormann & Behrens, 2017). The universities in Australia can analyse the historical progress made by them with the help of the previous sustainability reports and quality reports produced by them can also empower them to develop better corporate strategies and reinforce the existing ones resulting in organisational empowerment.
The sustainability reporting practices in the higher education sector in Australia is still in its nascent stage. There are significant differences that can be highlighted in the sustainability report presented and shared by various universities. The entire world is working towards improving the quality and coverage of the content that is presented in the form of sustainability report and there is an even greater focus on the reporting practices of the universities due to the responsibility of preparing our future leaders. The findings of the study are relevant for the Australian universities and other organisations operating in the academic domain. These findings will also be important for the universities operating in any other part of the world facing similar challenges (An, Davey, & Harun, 2017). The recommendations presented in the report can provide the universities, the regulators and the stakeholders with measures to contribute towards the improvement of the quality of sustainability reporting and enhance the assurance practices that are currently adopted by them. It is important that the universities start considering the practical steps that can be taken for improving the relevance and the quality of sustainability reporting. For this, they need to present more information associated with the environmental and societal impact. The approach followed for conducting this research can also be used to carry out similar research in any other location and geographical area all for the organisations operating in any other sector. The practice of sustainable development can be better incorporated by the universities in Australia and worldwide by making use of the findings and the recommendations included in the research institutionalizing sustainability as a concept.
Conceptual framework
There are several issues that impact the accounting and sustainability reporting practices of the Australian universities in practice. Although the organisations operating in Australia have a concept of sustainability that is mutually agreed upon by then, the life of concrete guidelines and reporting framework makes it very difficult to analyse the legitimacy and authenticity of the reports prepared and shared by the universities in Australia. On the basis of the literature review, the most significant challenges and contemporary issues associated with sustainability reporting by the Australian universities include the inconsistency in the measurement and disclosure, the inherent desire and motivation of the organisation, the voluntary nature of disclosures associated with sustainability performance, the lack of compatibility and reliability in the reports prepared by the universities in Australia. The hypothesis for the research is formulated on the basis of contemporary issues identified after conducting the literature review.
Not every organisation is inherently driven and motivated to analyse and report sustainability performance. The lack of inherent motivation of the decision-makers of the organisations is a deciding factor and a contemporary issue that is being faced by the universities in their sustainability reporting endeavour. The hypothesis prepared for testing the impact of this challenge is:
H1: There is a significant positive relationship between the motivation for compliance with sustainability reporting practices and sustainability reporting by the Australian universities.
The standards and frameworks set out for sustainability reporting contribute towards deciding the quality and the usefulness of the reports prepared by the organisations. There are multiple reporting frameworks and all the frameworks have their own rationale, purpose and objective. The proliferation of multiple reporting Frameworks for sustainability reporting has resulted in making this process complicated for the organisations and impacts the process of preparation and sharing of the report. The hypothesis formed for analysing this impact is:
H2: The multiple reporting frameworks have a significant positive impact on sustainability reporting by the Australian universities.
Do universities in Australia currently preparing and sharing the reports disclosing that sustainability performance because of the pressure from the stakeholder groups. However, this process is voluntary and it is not yet mandatory for the organisations to disclose the details of the impact that their operations have on the environment and the society. The voluntary nature of sustainability reporting is a challenge and is influencing the overall quality of the sustainability report prepared by the organisations. The hypothesis formed for testing the impact of voluntary sustainability reporting on the universities of Australia is:
H3: Making sustainability reporting practice voluntary for Australian universities has a significant positive impact on sustainability reporting.
The lack of uniformity in the controls, systems and processes developed for sustainability reporting by the Australian universities contributes to a reduction in the reliability and comparability of the reports prepared by them. The organisations are unable to make decisions associated with the financial and nonfinancial information that should be considered material by their stakeholders and that needs to be included in the report. This is another significant challenge that needs to be addressed in this ever-evolving sustainability reporting scenario. The hypothesis developed for testing the challenge posed by this contemporary issue is:
H4: The reliability and compatibility in the measurement approaches for sustainability reporting has a significant positive impact on the sustainability reporting practices Australian universities.
Research methodology
The research methodology that will be followed for conducting the study presents the various tools and techniques that will be used for deciding the sample for data collection, gathering the information, analysing it and presenting the conclusions on the basis of it. The detailed research methodology including the research design, techniques for data collection and sampling and ethics declaration for the study is included in this section.
Research Design
This is a quantitative research that will provide a detailed understanding of the sustainability reporting practices of the Australian universities on the basis of a small but focused sample. A quantitative research design is objective and presents numeric answers to the questions that cannot be descriptively represented. Based on the perspective of social constructivism, this grounded theory study will begin with understanding the current sustainability reporting practices of the Australian universities and formulating specific questions that define the contemporary challenges faced by the universities in this process. The quantitative research design will then follow the process of development of themes and patterns that will be further analysed to address the impact that each of these contemporary challenges has on the reporting process. The data for the research will be collected from secondary sources that includes the internal reports of the sustainability performance of the Edith Cowan University as well as from the external sources which include the sustainability reports of other Australian universities and previous academic research conducted on this subject by other researchers (Azizi, Bien, & Sassen, 2018).
Population and sampling
The population for this study are all the universities operating in Australia and the sampling process followed choosing the units and cases for the research is the self-selection non-probability. This simple random technique of non-probability sampling is based on the judgement of the researcher. This sampling technique was selected to ensure that the organisations with the latest sustainability reports word selected to get a better insight into the phenomena of sustainability reporting and only choose the organisations that meet selection criteria required for the research.
Data analysis
Quantitative data analysis provides a defined value of information in the form of statistics and numbers. This research makes use of quantitative data analysis to provide evidence and to test the hypothesis so that they can be rejected or selected on the basis of the results obtained from the analysis. The quantitative data analysis technique is adopted as it is found to be more systematic and it helps in transforming the gathered information into numeric data providing specific and empirical answers to the questions. Quantitative data analysis also enables the communication of numerical results to the stakeholders that are considered to be more accurate. The quantitative interpretation of data for this research will be based on categorising the data on the basis of the sub-themes identified in the sustainability reporting practices of the organisations during the process of hypothesis formulation (Jorge, Andrades, & Jesus, 2018). These sub-themes include the motivation and the desire for compliance for the organisations, the voluntary or involuntary nature of sustainability reporting in the region and the level of compatibility and reliability in the approach adopted by the organisations for sustainability reporting. The final result will be represented by making use of the quantitative data analysis tools and preparing the charts and graphs on the basis of it.
Ethics declaration
All the guidelines presented in the 2018 Australian Code for the Responsible Conduct are followed for conducting this study. Information presented in the research report is truthfully and accurately presented and the research methodology, approach and findings of the study are shared with complete accuracy and responsibility. All the people involved in the research process were treated fairly and the original contributors of information and data included in the research have been duly credited by appropriate referencing and citation of the work. The research is also prepared according to the Research Data Management Policy of the Edith Cowan University it has been ensured that all the principles and responsibilities presented by these codes and policies are met when conducting this study.
Research limitations
This research is limited in its scope because the study is only concentrated on the analysis of the sustainability reporting practices of the Australian universities. This study only highlights the problems and challenges related to the information presented by the universities on their sustainability performance and does not present the solutions for the same. The findings of the study cannot be generalized for any organisation other than the ones selected as the sample population or any other Australian or international industry. Since the report makes use of secondary data, the reliability and validity of the information presented as a part of the study is also dependent on the reliability and validity of the source of information from which the data was gathered. The sample size and the sampling process of the research also put some limitations (Melzatia, 2018). Due to the limited availability of resources and time for conducting this academic research, the study only makes use of the annual report and the sustainability reports presented by a few universities in Australia. This research would have been more exhaustive with the probability sampling approach to reduce the bias and increase the generalizability of the results. The probability sampling techniques ensure that the sample selected for the study is representative of the general population but since this research is only focused on identifying the contemporary issues and is carried out for academic purpose; non-probability sampling technique was chosen to make the process less time and resource consuming.