hello i need to solve the questions that available in the requirements in the file bellow ,
Fantastic news! We've Found the answer you've been seeking!
Question:
hello i need to solve the questions that available in the requirements in the file bellow , you have to do question number 1 (A and B )
question number 4
question number 6
SABMiller: The Case for Sustainability Reporting 1 SABMiller: The Case for Sustainability Reporting ABSTRACT This case study focuses on the emerging global issue of sustainability and integrated reporting for corporations. With the pressure on the environment from climate change, increasing global population, and depletion of natural resources, accountants are ideally positioned to support their organizations' efforts to adopt sustainable business practices and to measure and report sustainable business activity. The case introduces the students to sustainable business reporting frameworks and provides them the opportunity to analyze SABMiller's sustainability reports. Students learn about sustainability core key performance indicators (KPIs), the importance of cost/benefit analysis in developing sustainable business practices, the role of the professional accountant in sustainability reporting, and the importance of the assurance function to provide third-party reliability for sustainability reports to investors. Keywords: sustainability reporting; integrated reporting; sustainability key performance indicators; SASB; GRI; corporate social responsibility 2 INTRODUCTION Case Overview This case examines sustainability reporting at SABMiller Plc, a multi-national beer and soft drink company. History has shown that corporate reporting and disclosure continually evolve to better meet the information needs of all stakeholders, including investors, creditors, regulators and society. Sustainability reporting is emerging in importance with increasing global concern about adverse effects of environmental changes on society. According to the United Nations (UN), the following factors are jeopardizing global sustainable development: \"global population forecast of almost 10 billion by 2050,\" as seen in Figure1 that will place pressure on natural Figure 1: Projected 2010 - 2050 World Population by Age Range resources, the projected global temperature increase of more than 2 degrees Fahrenheit by 2050 and extreme water shortages. These issues will negatively affect global poverty, economic development, population growth, sustainable development, and resource management (UN, 2015). Accounting for sustainability refers to establishing an organizational strategy that 3 focuses on sustainability strategies and initiatives, goals and performance targets, and performance reporting. The American Institute of Certified Public Accountants (AICPA) recognizes that the accounting function has historically facilitated evaluating risks and opportunities in organizations, operationalizing strategies in terms of financial and nonfinancial targets, and providing reporting feedback. Therefore, because sustainability reporting addresses non-financial performance measurements, accountants play a key role in facilitating the identification, measurement, and reporting of these non-financial performance metrics for their organizations (AICPA.org, 2015). Corporate reporting has moved from financially focused reports to include non-financial disclosures on business sustainability. As shown in Figure 2, the Governance and Accountability Institute (2015) examined the S&P 500 Index, a leading benchmark of stock performance, and found that 75% of the companies (375) prepared sustainability reports in 2014 up significantly from 2011 when 20% (100) companies prepared the reports. Figure 2. Percent of S&P 500 Companies Preparing Sustainability Reports 2011-2014. 4 His Royal Highness Prince Charles of Wales, an early supporter of accounting for sustainability, and founder of AccountingforSustainablity.org issued a call to action for accountants to take a leadership role in sustainability accounting. He said: \"Who better to take the lead and set an example than the Accountancy Profession which is the engine room of the corporate world and government\" (Prince Charles, 2015). SABMiller is a pioneer in developing, measuring, evaluating and reporting on its sustainability initiatives as the company believes that: \"Business can play a leading role in tackling society's future challenges, and therefore we welcome the emphasis being placed on economic growth, trade, investment entrepreneurship and sustainable job creation, as well as social development and environmental stability, as the United Nations seeks new development priorities post2015\" (SABMiller, 2014b, p. 2). Sustainability Accounting Purpose and Leading Frameworks for Reporting According to the Sustainability Accounting Standards Board (SASB), \"The purpose of sustainability accounting is to evaluate the environmental, social and governance performance of companies through an account of their management of various forms of non-financial capital associated with sustainability - environmental, human and social - and corporate governance issues, which they rely upon for sustained, long-term value creation" (SASB Conceptual Framework). Thus, a sustainability report describes a company's performance with respect to key environmental, social, and governance (ESG) topics that are relevant to its stakeholders and its business (SEC, 2016). Publicly traded companies have a legal obligation to present an annual report detailing historical financial position and performance, governance, and regulatory compliance. Many believe that these traditional financial reports, such as the U.S.'s Securities and Exchange Commission (SEC) Forms 10-K and 20-F, do not tell the whole story about the company. Financial statement users increasingly want to understand that a business is not only financially successful in the short-term, but also sustainable over the long-term. Consequently, reporting relevant, reliable non-financial disclosures provide an opportunity for organizations to enhance trust and to create value for shareholders and key stakeholders. 5 Financial statements are prepared following accounting frameworks such as a country's Generally Accepted Accounting Principles (GAAP) or the financial standards prescribed by their jurisdiction such as International Financial Reporting Standards (IFRS). As a result of following similar reporting standards, financial statements can be compared between companies. However, while financial reporting in accordance with prescribed accounting standards (e.g., country GAAP; IFRS) is mandatory, sustainability reporting is voluntary. Thus, although voluntary sustainability reporting has become an increasingly common practice among large corporations, companies have the freedom to choose the information and disclosures that they report to their stakeholders. This flexibility undermines the value of sustainability reports because it is very difficult to evaluate and compare them over time periods and among companies. Voluntary sustainability reporting presents a number of challenges because companies may choose different time periods in which to report, as well as reporting on different indicators in different formats and using different metrics. The question arises as to whether or not such reporting should remain strictly voluntary. Many believe that mandated reporting of key sustainability performance indicators would be crucial for an effective disclosure framework. Jean Rogers, president of the Sustainability Accounting Standards Board (SASB, 2015) says: \"Right now, investors who want to assess corporate performance on environmental, social and governance issues, are navigating with no map or compass.\" However, many sustainability reporting standards have been emerging, driven by the need for better disclosure of non-financial information. This would also lead to comparability in disclosing crucial information and allowing investors and others to make apples-to-apples comparisons. Sustainability reporting frameworks that incorporate key sustainability performance indicators can lead to better performance in those areas which are considered most crucial to investors, other stakeholders, and society. Organizations that set sustainability reporting standards include the Global Reporting Initiative (GRI), the Sustainability Accounting Standards Board (SASB), the International Integrated Reporting Council (IIRC), and the Carbon Disclosure Standards Board (CDSB). The GRI, which was founded in 1997 has made substantial progress in developing a comprehensive set of key sustainability performance indicators relevant to a wide spectrum of stakeholders and applicable to corporations across all sectors. Thousands of organizations in 6 over 90 countries use GRI's Standards for their reporting. Of the world's largest 250 corporation, 93% report on their sustainability performance and 82% of these use GRI's Standards to do so (GRI website, 2016. In response to the need for a common language for sustainability, the SASB was created in 2011. The mission of SASB is to develop and disseminate sustainability accounting standards that help public corporations disclose material, decision-useful information to investors. The SASB issues industry-specific standards for use in disclosing material sustainability information in filings to the SEC. SASB is developing sustainability accounting standards for 79 industries in 11 sectors (SASB, 2016). In 2016, the SASB and Institute of Management Accountants (IMA) announced a new Memorandum of Understanding (MoU) to advance the management and disclosure of nonfinancial information in corporate reports. The SEC requires disclosing in the MD&A material information (i.e., management's view on known trends and uncertainties that are reasonably likely to have a material impact on results of operations and financial condition) to the stakeholders, including investors, in SEC filings such as Form 10-K or 20-F. The number of companies seeking external assurance on their sustainability reports is consistently rising (Doherty, 2015). The International Integrated Reporting Council (IIRC), launched in 2010, is a global coalition of regulators, investors, companies, standard setters, the accounting profession and NGOs. Together, this coalition shares the view that communication about value creation should be the next step in the evolution of corporate reporting. The IIRC's International Framework for creating integrated reports has been developed to meet this need and provide a foundation for the future. An integrated report is a concise communication about how an organization's strategy, governance, performance and prospects, in the context of its external environment, lead to the creation of value over the short, medium and long term. Both financial and sustainability-related performance are addressed in integrated reports. ABOUT SABMILLER SABMiller plc is a multinational company operating in the beer and soft drinks business with operations in in 80 countries across Africa, Asia, Australia, Europe, North America and South America Africa. The company is the world's second-largest brewer and soft drink company 7 measured by revenues after Anheuser-Bush InBev (SABMiller SWOT, 2015). SABMiller beers include those classified by the company as global beer brands, the flagships of SAB Miller, including as seen in Figure 3, Fosters, Grolsch, Miller, Peroni, Nastro Azzurro, and Pilzner Urquell (see Figure 3). The company also owns over 150 market-leading local brands and is one of the world's largest Coca-Cola bottlers and has carbonated soft drinks bottling operations in 14 markets. In 2015, as shown in Figure 4, the company sold around 246 million hl of lager and 70 million hl of soft drinks, a slight increase over 2014 (SABMiller, 2015b). Country Country's Major Beer Brand Yugoslavia Pilsner Urquell Poland Tyskie Italy Peroni Nastro Azzurro United States Miller Genuine Draft Netherlands Grolsch Australia Fosters Figure 3. SABMiller Top Global Beer Brands by Country. Source: SABMiller 2015 Annual Report Figure 4. Lager and Soft Drink Volumes in Millions of Hectoliteres (hl m) Source: SABMiller 2015 Annual Report South African Breweries (SAB) was founded in 1895 in South Africa. For many decades the company's operations were mainly limited to southern Africa, where it had established a dominant position in the market. In 1990 it began investing in Europe. After listing on the London Stock Exchange in 1999 to raise capital for acquisitions, the group purchased the Miller Brewing Company in North America in 2002, and changed its name to SABMiller. Following 8 this, the group's next major acquisition was a major interest in Bavaria S.A., South America's second largest brewer and owner of the Aguila and Club Colombia brands in 2005 (SABMiller, 2015a). In November 2011, SABMiller launched Impala Cervejas in Africa, the first commercially produced cassava beer, although Africans have been making cassava home brews for generations (SABMiller, 2015a). The taste is described as somewhat bitter and tangy, but not sweet. In 2014, SABMiller was among the inaugural winners of the Ubuntu Awards, a new initiative by South Africa's government that celebrates efforts by businesses and individuals to promote the country's national interests and values across the world. SABMiller has a primary listing on the London Stock Exchange, is a FTSE Index100 (Financial Times Stock Exchange) company, and has a secondary listing on the Johannesburg Stock Exchange. Its market capitalization as of October 15, 2015 was approximately 64.668 billion (Bloomberg Business, 2015). In November 2014 it was announced that SABMiller, the Coca-Cola Company and Gutsche Family Investments (majority shareholders in Coca-Cola Sabco) had agreed to combine the bottling operations of their non-alcoholic ready-to-drink beverages businesses in Southern and East Africa. The new bottler, Coca-Cola Beverages Africa, serves 12 high-growth countries accounting for approximately 40 per cent of all Coca-Cola beverage volumes in Africa (SABMiller plc, 2015a). In October 2015, Anheuser-Busch (AB) InBev NV, the world's number one brewing company, completed an agreement to acquire its closest rival, SABMiller, for nearly $106 billion - a 48%premium to the company's closing price (WSJ, October 15, 2016). The deal, reached after months of negotiations, would create a beer industry giant with annual revenue of about $64 billion. It would give AB InBev a substantial operation in Africa, where it has little presence, and where most growth in the beer market is expected, as well as greater dominance in Latin America. It is estimated that a combined AB InBev-SABMiller could account for 29 percent of global beer sales, after selling some assets to win regulatory approval. It would also be more than three times as large in terms of sales as its next closest competitor, the Dutch brewer Heineken. Despite the regulatory hurdles, this transaction was completed in 2016 and SABMiller became a subsidiary of AB InBev (Euromonitor, 2016). SUSTAINABILITY REPORT 9 SABMiller runs a number of sustainable development initiatives across its companies and countries in which it operates. The company is considered a pioneer in the field. An annual Sustainable Development Summary Report reports the prior year's activities and accomplishments and current initiatives. The report is structured using the company's Prosper sustainability objectives and the GRI 4 framework (SABMiller plc, 2015c). The company sets targets aimed at reducing carbon emissions or water usage in its brewing operations. For example, they use new lightweight bottles that use 30% less glass. The lightweight bottles are designed to not only reduce the amount of waste materials but also cut down on energy used in production and distribution reducing the company's carbon emissions. Additional initiatives of SABMiller are shown in Figure 5. Reduction of educe carbon emissions includes phasing out the use of HFC (hydroflurocarbon, a flurocarbon by-product of industrial projection) refrigeration units, and the conversion of brewery production landfill waste to a byproduct with value, such as water recycling (SABMiller plc, 2015c). Between 2008 and 2015, the company reduced its carbon emissions from on-site energy use by 35%. In Africa, SABMiller's beer production focuses on water conservation measures in a region that is plagued by water shortages. In 2015, the company used 3.3 hl of water compared to its target of 3.5 hl of water to produce1 hl of beer (SABMiller plc, 2015c). Another goal is to increase the number of female managers and executives. Instead of using water to sanitize beer cans, ionized air is used (SABMiller, 2011). 10 Figure 5. SABMiller Sustainable Goals 2015 Performance. Sustainability performance results in 2015. Adapted from SABMiller plc sustainable development report 2015. Source: http://www.sabmiller.com/sustainability/reporting/sustainability-report The company focuses on creating value sustainability chains to promote economic and social value that links the company's value chain from raw materials sourcing to the brewing process to the bottling and distribution process. The company works in partnership with its suppliers, distribution channels, and customers as seen in Figure 6. 11 Figure 6. SABMiller's Sustainable Value Chain. Source: SABMiller plc 2015 Annual Report. In the 2015 SABMiller' Sustainable Development report, the company unveiled five shared imperatives, which apply to suppliers, sellers and customers, as well as to SABMiller itself. In this report, the company stated that \"We understand that our profitability depends on healthy communities, growing economies and the responsible use of scarce natural resources. We integrate these issues into our business through our five shared imperatives\" (SABMiller, 2015). Sustainability core key performance indicators (KPIs) are quantifiable and relevant business metrics that are used to track performance. They must be tied to a company's strategy and desired outcomes in order to drive performance. The Sustainability Assessment Matrix reports performance on those KPIs. While KPIs for financial reporting purposes are well established, KPIs for sustainability reporting purposes continue to evolve. Some indicate that SABMiller's efforts are characteristic of a new wave of sustainability plans. These set targets not only for the company, but also for the divisions and people it works with and sells to in order to embed sustainability throughout the company and its external partners. The targets are not only about the environment but society at large (A new green wave, 2014). The company is promising to teach basic business skills to 500,000 small enterprises, mostly shops that sell its beer. It is helping farmers use water more efficiently and is working with wheat farmers who have been depleting their aquifer to reduce water by a quarter, to ensure it still has water to brew beer. It is also sponsoring anti-drunkenness and road-safety campaigns aimed at its own customers. 12 REQUIREMENTS SABMiller's CFO and the Board of Directors Corporate Accountability and Risk Assurance Committee (CARAC) asked you to respond to the following questions. When answering the questions, please use the SABMiller 2015 Annual Report and Sustainable Development Summary Report that are listed in the reference section below. Additionally, you may also cite validated references from the university library or the Internet. Your responses to the questions should address the requirements in detail, providing citations of sources used. 1. a. Access SABMiller's 2015 Sustainable Development Summary Report. List five shared imperatives as well as sustainable development targets for 2020. Explain why these imperatives are 'shared'? Based on your reading of the strategy (see SABMiller's Annual Report, pages 46-51) has SABMiller integrated sustainability initiatives in its business strategy? b. Describe progress to date in achieving the sustainability goals on core key performance indicators (KPIs) as reported in the SABMiller's Sustainability Assessment Matrix reporting tool (www.sabmiller.com/sam). Why is disclosing this information important for SABMiller? What do you think company's motivation is for providing sustainability disclosures? c. Access the 2014 Anheuser-Busch InBev NV Citizenship Report (pp. 8-9, 16, 46).. Compare this report with the SABMiller's 2015 Sustainable Development Summary Report. In your opinion, are these reports comparable? Identify four common industrylevel sustainability disclosure topics and accounting metrics (KPIs) in these reports. 2. What is the Global Reporting Initiative (GRI)? In addition to Prosper targets, SABMiller's 2015 sustainability report also used the GRI 4th generation framework, G4, as a secondary index. Access the G4 Sustainability Reporting Guidelines (available at: https://www.globalreporting.org/resourcelibrary/GRIG4-Part1-Reporting-Principles-andStandard-Disclosures.pdf ). and list GRI principles for defining report content and quality 13 (pp: 16-18). In your opinion, is SABMiller's 2015 Sustainable Development Summary Report prepared in accordance with the GRI principles for defining report content? 3. What is the International Integrated Reporting Council (IIRC) and what is its purpose? Based on your assessment, does SABMiller's integrate sustainability information with financial information? How would you see the link between SABMiller's sustainability reporting and integrated reporting? 4. SABMiller's Board of Directors engaged the Big Four accounting firm PwC to provide limited assurance on SABMiller's 2015 Sustainable Development Summary Report. Review the Independent Limited Assurance Report to the Directors of SABMiller prepared by PwC. What was the scope of the assurance assignment, why was limited assurance provided, and what assurance standards did the auditors follow? 5.a. Discuss cost/benefit considerations in setting and reaching SABMiller's sustainability goals and its impact on the company's profitability and its ability to create value over time. Please explain two cost savings that SABMiller reported in the 2015 sustainability report. 5.b. What concerns might an investor have about sustainability initiatives? Do you think that investors have the right to expect companies to adopt sustainable business practices and issue reports summarizing sustainable business practice performance? Please explain your answer. 6. In light of the 2014 SABMiller's sustainability report, comment how the role of the professional accountant is impacted by the increasing focus on sustainability reporting? REFERENCES 14 A new green wave. Economist [serial online]. August 30, 2014; 412(8902):61. AICPA. (2015). Sustainability accounting. AICPA.org. Retrieved from http://www.aicpa.org/InterestAreas/BusinessIndustryAndGovernment/Resources/Sustain ability/Pages/Sustainability%20Accounting.aspx Bloomberg Business. (15 October, 2015). SABMiller, plc. Retrieved from http://www.bloomberg.com/quote/UKX:IND/members Cohen, K. (2010). Is the world running out of oil? ExxonMobil Perspectives: Exxon Mobil. Retrieved from http://www.exxonmobilperspectives.com/2010/12/03/is-the-worldrunning-out-of-oil-2/BLOG Post Doherty, C. Measuring and reporting non-financial information. EY, AAA conference, January 22, 2015. Eccles, R. G., Ioannou, I., & Serafeim, G. (2014). The Impact of Corporate Sustainability on Organizational Processes and Performance. Management Science, 60(11), 2835-2857. doi:10.1287/mnsc.2014.1984 FTSE100. (2015 July 6). FTSE100 index. Yahoo Finance. Retrieved from https://finance.yahoo.com/q/cp?s=^FTSE&alpha=S Global Reporting Initiative. 2013. The sustainability content of integrated reports - a survey of pioneers. GRI. Retrieved from https://www.globalreporting.org/resourcelibrary/GRIIR.pdf Global Reporting Initiative. 2016. GRI at a glance. Retrieved from https://www.globalreporting.org/informationews-and-press-center/pressresources/Pages/default.aspx Governance and Accountability Institute. (2015). FLASH REPORT Seventy-Five percent (75%) of the S&P 500 Index published corporate sustainability Reports in 2014. Retrieved from http://finance.yahoo.comews/flash-report-seventy-five-percent140000344.html;_ylt=AwrXgSPvKYtVpQIAy3zQtDMD;_ylu=X3oDMTByc3RzMXFjB GNvbG8DZ3ExBHBvcwM0BHZ0aWQDBHNlYwNzcg--IIRC. International Integrated Reporting Council (IIRC). 2013. The International Expert Answer:
Posted Date:
