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Qi. Describe the two companies that have been researched
KPMG is an international company dealing with accounting services and even indulging in professional services. It is established in the year 1987 and has been servicing as an accounting firm for the past 32 years. KPMG International Cooperative is a company established by the founders William Barclay Peat and James Marwick. Its main headquarters is in Zug, Switzerland, Netherlands. KPMG has Bill Thomas as its operating chairman and the organisation work professional rendering services to customers in the fields of Actuarial, Assurance, Financial , legal and Tax advice and even have consulting services (Assets.kpmg, 2019). It has an annual revenue collection of US$28.96 billion recorded last year and has more than 207,050 employees operating in all the departments of their company worldwide.
Deloitte is another leading company which operates internationally in accounting fields, and is been considered one of leading accounting firms along with KPMG International Co-Operative. Deloitte is also known as one of the "Big Four "organisation in servicing internationally in financial and having collected good revenues under the guidance of professionals. It has been established in the year 1845, and have been operating for more than 174 years mainly head-quarter in London, England, United Kingdom (Deloitte United States. (2019). ).
David Cruickshank being the operating manager, bringing the organisation US$43.2 billion in the year 2016, the company has more than 286,000 employees dealing in the fields of auditing, taxation policies, consulting as dealing with organisational risk and financial stature. It is known as the 4TH largest private oriented company situated in the United Kingdom.
The maintenance of CR activities is necessary to cut-down the financi8al risks and social criticise, involving the CSR activities helps in getting the preferences of the customers and get relevant revenue for their success in the international market. The company KPMG have faced issues regarding human rights and making linking to carbon targets. Issue of CSR Reports have been a mandatory issue by the G250 by the year 2016 to 2017. Human rights, controlling carbon emissions and subsiding risk due to climatic changes are issues which the company has been facing while making their CR reports and many companies are considered to be less careful about this according to the report of UN Guiding Principles bon Business & Human Rights. The similar issues have been faced by Deloitte but as they have operating for more than a decade in United Kingdom they have taken specific measures to reduce this risk.
Qii. What differences are evident between the two companies in terms of range of social, Environmental and economic issues dealt with in their reports and depth of coverage on specific issues?
There are many issues that are faced by both of the companies which surrounds their operating field in accounting businesses. There is range of issues which the companies have to deal with like financial stature, environmental and economic issues to sustain in the competitive market.
In the year 2015, the United Nations have inculcated 17 set of Sustainable Development Goals, which can address problems related to social and economic development issues(wbcsd.org,2019). The key SDG's that every company must follow are given below:
- Less Poverty
- Decreased hunger
- Good health and standard living
- Raised educational standards
- Equality in Gender
- Clean water and maintenance of hygiene
- Clean energy
- Effective work environment to induce economic growth
- High maintenance of industry growth and infrastructure
- Reduction in inequality, racism
- Cities involving sustainable activities
- Responsible expenditure
- Action taken to reduce climatic changes, activities in reduction of pollution
- Taking care of life below water
- Taking care of animals and minor species
- Maintenance of peace, justice and integration in workplace and home
- Indulging in partnership for maintaining this goals
KPMG has faced issues regarding the liabilities holding capitals, environmental hazards which have increased fuel prices and increased costs of landfills (KPMG, 2019). The company has to look after the high profile food safety to engage in "non-financial" sustainability factors. Influencing the deeper insight into handling the supply and value chain will help in handling the failures of maintaining sustainability factors.
Investors generally see through the maintenance of the environmental factors while operations were it helps in risk management and help in getting stronger financial benefits in the market. KPMG must look for responsible investments to cut short their risks related to sustainability, this can be possible by responsible investment and cutting down irrational transactions. As an accounting firm the handling of taxes and expenditures can be only be solved by the help iof responsible investment and stopping irrelevant transactions. The recent sustainability problems the company have faced are as follows:
- They have been offered a $90 million project where they will require $70 million energy; they can save by offering the client a solution without using their capital which can reduce their cost.
- Due to the imposition of European food processing facility, they have to upgrade their capital investment; therefore cutting down their transactional costs can helps them get better sustainability.
In case of Deloitte, even though Governments were becoming incapable in handling the large scale problems in financial and taxation departments related to the private companies. Deloitte has solved the issues with innovative ideas, and have adapted strategy collective action initiatives which will be both benefitting in maintaining social background as well earned profits (Www2.deloitte.com, 2019).). As these companies consulting people regarding finance and taxation policies maintaining the social stature will help them gain the preferences of the customers as well as gain sustainability.
Advantages and disadvantages of Social Report of the companies
Advantages of reporting helps in the following ways:
- It helps the company in analysing the risks and future shortcomings, by eradicating they gain grab new opportunities
- It helps in making a difference in financial and non financial performances
- It creates the possible ways for building up new strategies and policies
Disadvantages of reporting
- Sometimes it fails to give clear view of the strategies that must be implemented to eradicate the future shortcomings of the company
- It fails to provide sustainability options quite sometimes
Qiii. Discuss which of the sustainable Development Goals you believe are most relevant to these companies, these industries and the countries in which they operate. Discuss the extent to which these SDGs were addressed, explicitly or implicitly, in the CSR/Sustainability reports of your companies.
Deloitte have formed partnership with Aspen network of Development Entrepreneurs which helps organisations to surge entrepreneurial motivation among the higher authorities to gain success in the competitive market, even after operating for 174 years, they have faced issued regarding finance, maintenance of social and strategic choices to gain more profit. ANDE members provide support regarding finance, education, enforces economical growth and helps the companies get benefitted by environmental and social factors.
Impact on Deloitte
The ANDE along with the Deloitte monitor helped in gaining competitive advantage, eradicated shortcomings and handle various challenges. They took a three strategic choice paths, and along with ANDE they started a five year strategy, which will help influence employability and helping small business in 150 countries dealing with accounts taxes to helps them grow and contribute to the worked with growth and sustainability. Therefore, according to the CSR Report of Deloitte, the IMPACT day organised by the company portrayed that the company has helped many companies in handling challenging situation in operating in the market making a big change in the socio economic sphere.
In case of the CSR Report of KPMG, there has been inclusion of new Diversity communities, which have employees who are 48.5% of women; they have indulged in training women employees which have reflected their initiative to encourage female empowerment contributing to social cause. They have invested 23.6 million in training and development so that they can involve in understanding of social causes. In case of environmental measures KPMG have contributed in making Carbon Emission neutral and reduced energy consumption by 12%, reduction in GHG by 22% ( Vartiak, 2016.).
Qiv. Based on your analyses of your company's sustainability/CSR reporting, identify in which Sustainability Phase's (Dunphy, Griffiths & Benn) each of your companies sit. Explain your reasons for these assessments.
There are mainly three phases of sustainability, they are as follows:
Sustainability 1.0: Eco-efficiencies and Risk Reduction
In this phase the company identifies the effects the operational activities have on the company and its employees. The effectiveness in achieving cost effectiveness. In this case both the companies have maintained their successful operations and their operations have rendered them high revenues and position in the market as the top accounting firms. KPMG earns US423 million revenues at the end of the year 2016-17, whereas Deloitte earns near about $50 million in the end of the year 2017. Both the companies have successfully reduced waste with new improvements in technological implementations. They have made clear practices in eradicating threats reacted to sustainability like threat related to chemicals, employee's disputes and training and financial breakdown due to social impacts (Stace, 2017).
Sustainability 2.0: Competitive advantage- in this phase the company must make their strategy so well to make their organisation integrated. The phase recommends in usage of suitable responses to increase performance and make new products and services to cater to the demands of the customers. In the stage two there is a requirement of a sustainability plan and comparing performance metrics to the previous years to make relevant measures for social, economic issues. Deloitte have successfully made five year strategy with partnership with ADNE, whereas KPMG is still struggling to make proper strategic alignment to their company operations for maintaining sustainability. Though they have included women employees and have indulged in women employment as a way of inducing social changes in their company and making a make as a sustainable company. Nevertheless, both the companies issues their CSR report annually where they portray their changes sand their reduction energy and waste management for better operation of their company keeping in mind the environment, social and economical aspect.
Sustainability 3.0: Reinvention and Regeneration- The inclusion of business model, involvement in social, environmental and economic constraints. The reinvention phase of a company includes the identification of local and global causes which both the company as international companies of accounting base have made a relevant place. After Deloitte, KPMG is considered to be the trustworthy company related to consultation about finance taxation, auditing etc. Deloitte has made considerable changes in making a future plan for the better sustainable growth. They have made measures in handling the sustainability problems by making partnerships and reducing waste and controlling transactions and investment related problems.
Qv. Discuss the extent to which the social reports reflect the values of your selected companies.
The social reports of both the company are stated below according to their mission statement, Values and Business Principles. They are given below
Mission statement: the mission of Deloitte is to help their clients and their employees to give good performance in maintaining the demands of the customers. The company's size, strength, resources helps in completing the mission. The beliefs help the company in having long lasting performances and maintaining their company sustainability (Deloitte United States, 2019).
Values: The beliefs among the employees and higher officials are the values of the company.
Business Principles: the principles are their commitments. They have their shared values, which reflect the ethic, integrity of the company which are non-negotiable.
The company has proved its commitments to communities by operating for more than 2 decades and maintains Principles of Business Conduct and even a Global Code, which helps in developing their standards and helping them work effectively. They have successfully worked in maintaining garage and waste management and creating a social space by making partnership with ADNE.
Mission Statement: its statement is to turn knowledge in information for industries and business oriented bodies to increase their value in clients and helps in increment of capital markets.
- They lead through giving examples
- Integrated working environment
- Respecting colleagues and workers and maintaining harmony
- Commitment to communities
- Acting through integrity
Business Principles: they believe in working in integrity respecting each other and maintaining the Workplace harmony to provide better services to customers and develop overall and individually.
KPMG culture and valued helps the company in gaining more transparent communicative system which have helped them in building trust and increases their diversity. They have high level of professional ethics which helps them in attracting client and increase customer base.
Qvi. Briefly reflect on your group's discussions of these companies. In what ways did the ideas presented by your group confirm your own conclusions or present another perspective to you?
In these report I have explained the background of two accounting firms that are Deloitte and KPMG. Deloitte being one of the companies providing services related to accounting, taxation policies and financial investments and transactions. The company report charts and CSR report has been compared to understand the benefit of the including social causes to their activities so that a good impression is created in the eye of the customers.
I have explained the sustainability phase of both the companies and the position they fit they have acquired Sustainability 3.0 position by their considerable excellent services in accounting, financial background and helping in providing better integration in the company which will eventually help them in sustainable development.
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