Westpac Sustainability

Question: Discuss about theWestpac Sustainability. Answer: Introduction: Westpac is a large organization and for the large organizations it is important to focus on sustainability based on the internal and external factors. The Westpac sustainability reports from 2001 reflect that the company has been focusing on both internal and external stakeholders. The past sustainability reports shows that Westpac wants to have strong tie-ups with employees, customers and government (Ruggiero, 2012). For profit organizations like Westpac focus on the ultimate goal of profits is must. That is not to say for-profit organizations should ignore external stakeholders that do not have interests benefited by profits. Rather, as is the case with most things in life, a balance must be struck. According to Pedersen (2011), for-profit corporations prioritize stakeholders according to interest and need. By ranking the interests of external stakeholders in relation to higher priority stakeholders, such as stockholders, corporations are better able to balance between external, so cietal obligations and internal demands for increased profit margins (Kappmeier, 2016). By ranking all stakeholders in order of interests and alignment with organizational objectives, for-profit firms engage in true conversation with stakeholders whose views may otherwise be overlooked by the organization (Kappmeier, 2016). The resulting two-way communication may open valuable solutions to organizational problems previously unknown to organizational leadership. Feedback in any relationship is critical to coexistence. The objective of this paper is to discuss the current best practices in the existing way of sustainability reporting of Westpac and analyzes the ways of improvement. Analysis The GRI (Global Reporting Initiative) guidelines mandate companies to define content through the use of materiality, stakeholder inclusiveness, sustainability context, etc. The GRI then distinguishes quality through the reports balance, comparability, accuracy, timeliness, reliability and clarity (Kujala, 2012). The assessment of Westpac on the GRI standards would demonstrate that the company has been doing well to communicate with society and government through its annual reports, sustainability reports and corporate websites. The corporate image of Westpac is good in the Australian market and it has been able to generate trust and respect of consumers. This has been possible with the use of certain best practices in its reporting and corporate governance. One of the best practices that could be observed in the sustainability reporting of Westpac is the involvement of board of directors to define the objectives of sustainability and their involvement to achieve these goals and objectives (Keating, 2008). The board of directors is generally composed of those persons elected by the organizations shareholders. Shareholders wield power based upon their financial holdings and are more bottom-line oriented. Stakeholders possess power through their interest and influence that is held based upon stakeholder salience. Tong Anantharaman (2011) show how "stakeholders can be classified into four groups: definitive, expectant, latent, and non-stakeholders according to the attributes each stakeholder holds at the present time." those that are definitive are the owners and customers who carry a high form of influence. Giving them a place at the table would be impractical, as stakeholder salience tends to vary, however, developing a consistent system of information dissemination and gathering would be beneficial to maintain active stakeholder participation. Another best practice that is reflected in the sustainability reporting of Westpac is stakeholders management. According to Frooman (1999) to be really useful to a firm trying to manage its stakeholders, stakeholder theory must provide an account of how stakeholders try to manage a firm (p. 192). The GRI guidelines suggest that stakeholders involvement should be high to develop a strong platform of sustainability. It can be done only when the stakeholders are provided the freedom and power. It is important that the conflicting needs of stakeholders should be managed in a logical and systematic manner. The first and the most important steps to manage the conflicting needs of stakeholders would be stakeholder assessment. As a part of stakeholders analysis, Westpac should realize the high priority stakeholders. These are the stakeholders that are most important for sustainability practices and corporate governance. The next step would be to analyze the influence of different stakeholders (Boatright, 2006). It is important to mention that it is not easy to analyze the influence of various stakeholders. For Westpac, there are various internal and external stakeholders whose influence would be difficult to assess (Taran Bett, 2015). Once the management has identified the priority and influence of stakeholders, the next step is to conduct the stakeholder mapping (Wheeler Elkington, 2001). The stakeholder mapping would then be mapped with the sustainability objectives. In the dimension of stakeholder management, one of the areas of improvement or one of the recommendations for Westpac is the use of management devices to manage the conflicting needs of stakeholders. Morris (1997) presents stakeholder management devices that seek to manage conflicting needs. Morris (1997, p. 413) states that management devices such as "ethics committees on the board of directors, public affairs offices, written codes of ethics, corporate sponsorship of community functions, and employee newsletters" work to provide a means by which firms can help meet its responsibilities to several stakeholders. Morris (1997) further states that these measures work to enforce management of stakeholder needs in an external focus. While, internal focus must be gauged as well. Such focus is related to three factors, which influence individual behavior in organizations that include expectations, attitudes, and perceptions. In other words, these management devices that are implemented by an organization to manage the conflicting needs of stakeholders must be able to measured somehow internally as well. In conclusion, an organization must have internal and external focus when creating management devices to help control stakeholder needs. Another best practice that Westpac could use is the increased involvement of low-level employees in the organization. It is observed that Westpac uses the top-down approach of strategic management wherein the management and leaders would develop the sustainability goals and would spread the same to mid level management. It is recommended that the low level employees should also be included while developing and implementing any policies around sustainability and corporate reporting. The employees at various levels should be asked about issues and their expectations. Then each party should be asked to come up with an adequate and acceptable solution to the problem, which is presented. As each solution is given, then the options can be discussed and weighed and a decision can be agreed upon or tabled for further discussion depending on the situation. Kappmeier (2016) states that lack of trust is often the problem with intergroup conflict. It would also help the management of Westpac to bridge the gap between stakeholders expectations and management perceptions of stakeholders expectations. The best practice of corporate governance highlights that each stakeholder should be identified and analyzed. This is to assess the potential that exists with the stakeholder to add influence or create further obstacles. A key stakeholder that is highlighted can be very supportive towards developing strategic initiatives. The stakeholder can also bring unity to the proposal that is met with criticism. This is done through the stakeholders power, legitimacy, and urgency that are perceived based upon stakeholder salience. The best practice of corporate governance and reporting also suggests that organizations should also customer involvement. The good thing for Westpac is that it does not exclude customers from its eco system. The organization realizes that customer can give good inputs and this is a reason that the existing customers of the bank are part of the corporate reporting framework of Westpac. Conclusion The above paper discusses the best practices used by Westpac for its sustainability reporting and the areas of improvement. The good thing in the sustainability reporting of Westpac is that the company is considerate about the traditional aspects of sustainability like carbon emission, corporate social responsibility, etc. Westpac also gives due consideration to both internal and external factors. However, there is a scope of increased role of internal stakeholders (employees). The employees, especially the low-level employees, should have more voice in front of the management. It is important the sustainability should not be practiced as a top-down approach in the organization. It is also important that Westpac should consider sustainability as continuous activity. The GRI guidelines also suggest that the focus on corporate governance, reporting framework and sustainability should not be a one-time thing for organizations. In fact, organizations should always explore the use of best practices and industry standards to provide continuous value to all the stakeholders. For Westpac, it is important that the sustainability vision should be communicated to all the stakeholders of the organization. References Boatright, J. R. (2006). What's wrong-and what's right-with stakeholder management. Journal Of Private Enterprise, 21(2), 1-25. Frooman, J. (1999). Stakeholder influence strategies. Academy Of Management Review, 24(2), 191-205. Kappmeier, M. (2016). Trusting the enemyTowards a comprehensive understanding of trust in intergroup conflict. Peace And Conflict: Journal Of Peace Psychology, 22(2), 134-144. doi:10.1037/pac0000159 Keating, B., Quazi, A., Kriz, A. and Coltman, T., 2008. 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