Australian organisations must adopt sustainability reporting in the 21 Essay

Australian organisations must adopt sustainability reporting in the 21 century - Essay Example However, the companies do not need to follow any standard reporting frameworks. Each industry faces varied external issues which are considered as significant to its operations (Hubbard, 2011). It can be stated that the companies are pressurised to disclose the non-financial information because of several market mechanism. These market drivers are found in numerous ethical, social as well as environmental investment funds that have given rise to sustainability reporting (Vormedal & Ruud, 2009). There are many reasons behind the companies’ disclosing sustainability reporting. They intend to persuade the non-stakeholders regarding the impacts of the performance of the company and strategies applied by it to stimulate the performance. The objective of sustainability reporting is to inform the shareholders regarding the fact that how well the company is handling with non-financial as well as financial risks. It also permits the company to recognize the areas of potential risks and evaluate its performance. Most of the companies prefer mandatory reporting since it sets up methods and structures for comprehending influences and risks which were not stated previously by the other organisations. It also offers institutional investors with the capability to avail the information on non-financial risks which further permits them to have better knowledge regarding the overall firm. Transparency and accountability to the stakeholders is promoted when companies tend to disclose sustainability reporting (Kolk, 2004). According to the views of Kolk, the main reasons behind sustainability reporting are to increase a company’s capability to keep track of the developments against particular targets. It tends to help in the proper implementation of the environmental strategy. It is proper sustainability reporting that creates awareness regarding the environmental issues in the organisation. Most of the companies try to focus more upon the sustainability reporting since it