Task details: Background WealthWise Insurance has recently set up an internal information system...

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Task details:

Background WealthWise Insurance has recently set up an internal information system to improve social and environmental practices within the company. The company has its head office in Brisbane and offices in all capital cities and every regional city with a population of more than XXXXXXXXXXpeople. One of the underlying principles of the company is to be socially and environmentally responsible. This principle has been in place for many years, dating back to the firm’s founder, Jeannette Dai, who felt that she would like to contribute to society rather than simply maximising profits. The company is a major contributor to charities, particularly those that focus on the homeless and the poor. It actively promotes environmental management in all of the company operations. It sponsors a program that provides scholarships to disadvantaged students to allow them to attend university, and it is proud to offer employment in the company to long-term unemployed and the poor. Each year it publishes a sustainability report that summarises its achievements across each area of performance.

Over time these activities have become a marketing strength of WealthWise. The social and environmental stance taken by the company has attracted many customers to the company. Listed on the Australian Securities Exchange in 2001, the company has also become a preferred investment of ethical and green investment funds. The mission statement of WealthWise states that it will aim to:  support employees in achieving their personal and career goals  act in a socially responsible way when dealing with insurance clients and the general community  promote a better social and physical environment for the world.

However, the current chief executive officer, Sylvia Trott, thinks that the firm has become complacent and is resting on its past achievements. She is concerned that the firm has built up a reputation for good social and environmental practices but is not walking the talk. There is some level of discontent among employees about the way that management treats staff, and this is impacting on employee satisfaction.

There have also been negative reports in the media of its treatment of businesses in Phuket and Langkawi that were damaged in the December 2004 tsunami. The reports claim that the company has tried to minimise the amounts paid to these businesses by strictly applying clauses in the insurance contracts that cover earthquake damage but not flood damage. In 2004, the company’s profit rose by 15 per cent to $173 million, on an asset base of $1 235 million. This is the third consecutive year of increased profits. Earnings per share were 62 cents, and the market value was $5.40 per share. The board is concerned that WealthWise makes a loss on its insurance business, while its investments yield a strong return and are the main reason for the increase in profitability. Its investment portfolio includes shares in BHP Billiton, Qantas, Telstra and James Hardie Industries. The board adopts a sustainability approach to viewing its performance and uses the following key performance indicators to assess company performance:

Financial indicators:  profit  gross insurance premiums  return on investment

Economic indicators:  policy, practices and spending on local suppliers  procedures for hiring local staff  development projects primarily for public benefit

Social indicators:  employee satisfaction ratings  percentage of women in the top three tiers of management  number of indigenous employees  customers’ ethical ranking of sales staff  number of staff hired who were previously unemployed teenagers

Environmental indicators:  tonnes of paper recycled per annum  percentage reduction in electricity usage  litres of fuel per dollar of sales.

Required:

1. Explain what is meant by sustainability reporting and why a publicly listed insurance company like WealthWise may adopt this approach.

2. Consider the list of key performance indicators used by WealthWise. Explain how these measures could be used to help achieve the mission.

3. Suggest alternative performance measures that could be included in the performance measurement system to assist WealthWise to achieve its mission.

4. Write a report to the chief executive officer explaining what steps she can take to encourage staff to behave in a way that supports sustainability. Specifically, explain to her how the performance measurement system could be used in a balanced way to support the achievement of the company’s goals.

Style and Format: o Report should be typed on single sided pages, using Arial 11 font, double line spaced with 2.5 cm margins all around. o Reference and reference list – in text referencing should be in accordance with the Harvard Anglia method. The reference list should be prepared in accordance with the Harvard Anglia method and list only those references cited in the body of the report.

Research requirements: Students need to support their analysis with reference from the text and a minimum of six (6) suitable, reliable, current and academically acceptable sourcesr

Charanjeet · Accepted Answer

Table of Contents
	Serial No.
	Topic
	Page No.
	1.
	Introduction
	1
	2.
	Meaning of Sustainability Reporting
	1
	3.
	Benefits of Sustainability Reporting to Companies
	2
	4.
	Analysis of Performance Indicators of Wealth Wise
	2-3
	5.
	Achievement of Wealth Wise Mission 
	3
	6.
	Alternative Performance Indicators for Performance Measurement System
	4
	7.
	Recommendations for encouraging staff to support sustainability
	4-5
	8.
	Recommendations for Balanced Approach of Performance Measurement System 
	5
	9.
	Conclusion 
	6
	10.
	References
	7
Introduction
The awareness among the investors has put more responsibility on the business houses to bring true, fair and reliable financial reporting and disclosures. The people are now becoming more aware towards environmental, social factors and want to protect their environment. The companies who support protection of environment and indulge in such activities which help in removing or recycling the waste material produced by them become highlighted in the society. This helps them in generation a goodwill and reputation on the market that effect of which can be seen for long term on various stakeholders. The corporate social responsibility, sustainability reporting is the name given to these practices of the companies which help in reporting the effect of the social and environment activities upon the economy or society as a whole. The company who bring positive results in these factors are considered environment friendly. More corporations disclose information about their environmental performance in response to stakeholder demands of environmental responsibility and accountability (Jose, A. and Lee, S.M., 2007). This paper also shows that top fortune companies reporting more on these social and environment factor to make impression on their stakeholders
Meaning of Sustainability Reporting 
The term “sustainability assessment” is used here to cover the manifold activities of monitoring, reporting, and providing an evidence base for policy development in relation to sustainability problems and outcomes (Magee et al, 2013). Thus sustainability reporting takes into account all the activities that usually an organization does for financial reporting. The difference once is between the factors, sustainability reporting gives more emphasis to social and environment factor. First of all organization set up some social and environment targets like providing education to this number of poor children or decrease in use of 10% of energy sources. Then after preparing mission statement and objectives, the next step is to find out the alternatives about performance. Then the best alternatives is chosen and report is prepare to show the difference if there any in the target set for social and environment factor and how much targets are achieved. Then this report is communicated by various sources to the ultimate stakeholders. The sustainability reporting has emerged as a new publicity tool for the various organizations. Government of different nations also emphasis companies to give something in return to the society from where these organizations are taking these resources.  The basic purpose of this kind of reporting is showing the overall effect of organization activities on the economy. Although one company may be performing very well on the ground of economic factors like return on investment, earning per share, net profits etc but its activities may not be good for the society or environment. Like it is not paying sufficient wages to labor as compared to rates prevailing in the society and this cost cutting is reason for its profit. Then its activities are not ethical from societal point of view. 
Benefits of Sustainability Reporting to Companies 
The benefits arise to public companies as a result of adopting sustainability reporting (James, M.L., 2014) can be illustrated as below:
Tangible Benefits
More Capital: The good reputation due to sustainability reporting helps in attracting more investors for the organization and it helps in more capital resources availability to the companies. They need not resort to underwriting service.
Employees Satisfaction: Employee feel motivated if they know that their organization is working for better of the society and it leads to their satisfaction and better work results.
Decrease cost of capital: The companies who enjoy a reputation in the market enjoy availability of loan and funds at low rate of interest. Finance companies even want to lend to such socially ethical companies.
Cost Cutting: The practices like reduction in energy resources usage etc help in getting the cost down also these kind of companies can save on account of law suits due to unethical practices.
Improved internal operations: The motivated employee work well and this help in co operation among various dept and improved internal operations.
More Profits: The reduction in cost and less wastage of resources due to better performance of employees result in more profits to companies and increased share price for investors.
Intangible Benefits
· Sustainability reporting helps in creation of internal goodwill to companies.

Task details: Background WealthWise Insurance has recently set up an internal information system to improve social and environmental practices within the company. The company has its head office in...

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