Question

In: Accounting

The CEO of BEEKAY Company, a listed mining company, is in discussing with the Chairman whether...


The CEO of BEEKAY Company, a listed mining company, is in discussing with the Chairman whether or not the company should adopt a triple bottom line (TBL) reporting system in order to demonstrateBEEKAY Company's level of sustainable development.BEEKAY Company's competitors are increasinglyadopting TBL reporting and the Chairman feels that it would be beneficial to follow suit. The CEO, on the other hand, feels that pursuing TBL reporting would be expensive and is not necessary.

Required

(a) Explain what TBL reporting involves and how it would help demonstrate BEEKAY Company’s sustainable development. Support your explanation by including examples of proxies that can be used to indicate the impact of the factors that would be included in a TBL report.

(b) Discuss how producing a TBL report may helpBEEKAY Company's management focus on improving the financial position of the company. Illustrate the discussion with examples where appropriate.

(c) DANDEE is a large region with a rugged, beautiful coastline where rare birds have recently settled on undisturbed cliffs. However, today, many communities in DANDEE suffer high unemployment. Government initiatives for regeneration through tourism have met with little success as the area has poor road networks, unsightly derelict buildings and dirty beaches and has discovered substantial tin reserves in DANDEE. With new technology, mining could be profitable, provide jobs and boost the economy. A number of interest and pressure groups have, however, been vocal in opposing the scheme including wildlife protection representatives, villagers worried about the potential increase in traffic congestion and noise, environmentalists, and anti-capitalism groups.

Required

Explain the conflicts between the main stakeholder groups in this scenario and discuss how the conflicts could be resolved.

Solutions

Expert Solution

Ans 1. TBL stands for Triple Bottom Line which represents a framework or a theory which suggests companies to focus on social and environmental concerns same as they do for profits. In simpler words we can say that on the bottom line three key elements are focussed i.e Profit, People and the planet.

In order to be a sustainable business, one shouldn't just take care of the profits but also social, financial and environmental concerns should be addressed and taken care of.

In the case of Beekay company, the following parameters can be considered in the TBL reporting

1. Tax revenues from mining and employment.

2. A measure of employment created in mining and in auxilliary/ service industry.

3. Sustainable mining practices like, increase in property values as a result of land reclamation

4. Company can reduce the cost of foreign exports by buying material from India itself.

By following these reporting there would be cost saving plus a healthy working environment would be built for the workers as somehow their wages can also be increase.

Ans 2. The usage of the TBL reporting, would eventually benefit the company as :

a. Attracting more employment as in a healthy working environment more people like to work.

b. TBL reporting if done properly, would create a good will among other competitors and a brand image in the market.

c. It would indirectly can attract various investors which in turn would make the company grow worldwide. .

Hence, TBL reporting in a company directly and indirectly benefits the organisation not only in terms of revenue and profits but also in terms of goodwill and branding.

Please give me a Thumbs up ?.Thanks!!


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