Running head: ANNUAL REPORT ANALYSIS AND INTERPRETATION 1

1) Identify and explain the following aspects of the company’s social and

environmental performance:

To be highly committed to its corporate social responsibilities is one of the core

values of CSL. This is the reason that it has adopted a systematic approach to

recognize and handle any environmental impacts of its operations. The system

constitutes of cooperation with state regulatory authorities, following local industrial

standards and international benchmarks and rules in this regard (CSL, 2008. p. 5).

CSL and Global Climate Change

CSL has introduced environmental protection programs at all of its production

locations for optimum utilization of resources and to minimize the emission of

greenhouse gases and liquid and solid waste (CSL, 2008. p. 5). In addition to this,

CSL has established innovative capital works and restructures the already existing

infrastructure to safeguard and further improve the environmental conditions. CSL is

a part of pharmaceutical industry and thus its energy usage and greenhouse gas

emission is at moderate level (CSL, 2008. p. 5). But still it is committed to the

sustainable development that could be achieved through minimizing the causes of

global warming and by maximizing the efficiency of water and energy utilization.

Greenhouse Gas Emissions

From the year 2004 to 2005, there was a 5% increase in the total CSL’s gas

emission of greenhouse in absolute terms to a total amount of 148,489 tonnes of CO2

in the year 2007 to 2008 (CSL, 2008. p. 6). One crucial contributory factor at the

Parkville facility was a high level of electricity consumption where the influenza

vaccine production was increased to fulfill the global demand.

Most of the greenhouse gas emissions are offset by CSL via exporting

excessive processed heat to be used by the organizations nearby. This is explained in

ANNUAL REPORT ANALYSIS: CSL 2

the bern section of the research report. In various distinct scopes, the gas emission of

the greenhouse is being categorized (CSL, 2008. p. 6). For scope 1 of CSL, there is

fossil fuel direct combustion on-site at almost 5 manufacturing facilities. While the

emission at scope 2 is due to the off-site steam and electricity production that is then

imported into the facilities of CSL (CSL, 2008. p. 6).

Improvements in the efficient energy utilization could be seen through the fact

that the magnitude of greenhouse gas production has been decreased. During the last

four years, CSL became successful in decreasing the magnitude of greenhouse gas

emission by 32% and 56% in the production of per unit of plasma and vaccine

respectively (CSL, 2008. p. 6).

Water Conservation

At the Australian operations of CSL, the conservation of water is of vital

importance where the history’s worst droughts were experienced continuously by

Victoria. Both of the Australian facilities possess plans for Water Management that

comprise measures for water conservation (CSL, 2008. p. 7). Due to these, at the

Broadmeadows site, there was noticed a notably right amount of decrease in the

consumption of water. Here at Broadmeadows site, the efficiency measures and reuse

of process water resulted in saving 27 ML water annually (CSL, 2008. p. 7).

Waste Water Emission

A significant amount of fresh water captured by and supplied to CSL’s

facilities is relatively discharged to the sewers from there it is them utilized for

domestic purposes or in some manufacturing processes (CSL, 2008. p. 8). There are

some possible contaminants in the wastewater, like biological wastes and cleaning

agents that may be either sent to the water treatment facilities of a municipal

department or directly treated on site.

ANNUAL REPORT ANALYSIS: CSL 3

Few agreements were done with the local water management authorities

related to the issue of managing the wastewater quality and volumes. The aim of CSL

facilities is to collaboratively work with other water management authorities to search

for the latest methods to manage resources of water (CSL, 2008. p. 8).

Waste Management

In Europe, the operations of CSL dispose of all of their wastes by incineration

or recycling. CSL in Australia is a signatory to the authoritative National Packaging

Covenant, and a number of reuse and recycling programs are implemented by them

for the waste management (CSL, 2008. p. 8). At the Kankakee facility, there is also a

huge range of water recycling programs that are regulated by the team of waste

management.

Measurable indicators

CSL will achieve continuous improvement through setting measurable health,

safety and environmental targets and objectives. The set targets will be reviewed

annually to evaluate the performance of the company through generally accepted

framework (CSL, 2017, p. 42). The professional metrics and goals developed as part

of the corporate responsibility will be reported transparently. The company will

ensure its commitment to the continuous improvement of its EHS2 standards,

performance and culture (CSL, 2017, p. 42).

Reasons for Adopting Environmental and Social Strategy

Their Environment Strategy is making it possible for them to reduce their

impact on the community and environment, influence their suppliers to control their

impacts, and also deliver services and products that aid their customers to minimize

their personal environmental footprints (CSL, 2017, p. 42). For environmental

management, an integrated strategy across their business will make it possible for
ANNUAL REPORT ANALYSIS: CSL 4

them to fulfill the expectations of customers, differentiate their offerings, accept the

opportunities, and reduce business risks connected with the issues related to the

environment (CSL, 2017, p. 42). The company aims to:

 Reduce their environmental impacts

 Strengthen the value proposition of their environmental customer

 Enhanced the productivity by reducing the operating costs

2) Identify if your allocated company subscribes to the Global Reporting

Initiative (GRI)? If so, explain if the company report on the sustainability

reporting measures that are consistent with the company’s strategic direction?

The latest CSR report published by CSL was based on the standards of Global

Reporting Initiative’s (GRI) G4 Sustainability Reporting Guide (CSL, 2017. P. 14)

Following the standards of GRI, CSL has developed a framework of environment,

sustainability, health and safety. The Strategic Plan on CSL is based on environment,

health, sustainability, and safety (EHS2) that guarantees that its facilities are working

as per regulatory and industry standards. This particular strategy comprises of the

compliance with commitments and regulations of government to improve the safety

and health of the workforce continuously along with reducing the effect of the

operations on surrounding environment (CSL, 2017, p. 14). In order to operate this

specific strategy an international standard of CSL EHS2 Management System is in the

process of development having regard to the global standards, draft ISO 45001

Occupational Health and Safety Management systems, and ISO 14001 Environmental

Management Systems (Group, 2018).

The Global Total Recordable Incident Rate continuously show that there is an

enhanced trend in the recordable illness and injury performance. Their operations in

Australia have been categorized as n Established Licensee with reference to the self-
ANNUAL REPORT ANALYSIS: CSL 5

insurance license of CSL under the rehabilitation, safety, and revised regulatory

model of Compensation Commission that was effective from 1st July 2016. As per

the previous model, a 3 Tier status was maintained formerly by CSL (CSL, 2017, p.

58). 3 Tier status refers to the indicator in which no international standards and

methodology is developed yet but is going through the process of developing and

testing the standards or methodology (United Nations, 2018).

None of the environmental violations have been observed by Environment

Protection Authority in Australia, Victoria or any similar agency of foreign

government or Australian interstate relative to the CSL’s European, Asia Pacific,

Australian, or North American operations at end of 30th June 2017. Waste-water

requirements were observed as non-compliance from the Parkville to the sewer

system were identified during the same year was resolved subsequently to satisfaction

level of the concerned water authority (CSL, 2017, p. 58). This non-compliance of the

wastewater end as limiting the sampling problem at the USA, Holly Springs site, and

was being rectified with the relevant authority.

Waste discharge and environmental obligations quotas are maintained as per

applicable foreign and Australian laws. The monitoring of environmental

performance is being subjected timely to site inspections and audits of the

government agency. The operations of EHS2 continues to purify processes,

standards, & systems of collecting data to guarantees that they are fully ready for the

latest regulatory requirements (CSL, 2017, 58).

Being the component of continuous compliance & improvement in the

voluntary and regulatory environment related performance, there is constant reporting

by CSL on the major issues related to the environment including management of

waste, energy consumption, water use, and emissions as component of annual

ANNUAL REPORT ANALYSIS: CSL 6

Corporate Responsibility Report of CSL and submission to Carbon Disclosure

Projects, CDP. The reporting obligations are met by CSL under the Victorian

Government’s Industrial Waste Management Policy and the Australian Government’s

National Greenhouse and Energy Reporting Act (2007) (CSL, 2017, p. 58).

3) Identify if your company complies with a corporate governance framework?

If so, whether the framework is compulsory or voluntary. Explain the

framework, in particular reporting and disclosure requirement.

The board, as well as management of CSL, strives to maintain corporate governance

at a very high standard and they are very committed to doing so. The management

and the board together work to maximize the wealth of their shareholders for which

the devise strategic plans. They actively work on risk management. They work to

bring transparency and answerability in the workforce through active management.

They also pay their fair share for the corporate social responsibility. The management

of CSL strives to make their company the best one by devising their strategies and

practices according to demand of the market, however, keeping in mind the ASX

corporate governance principles and recommendations and guidelines of Corporate

Act 2001. CSL is carrying out reporting and disclosure practices under the

Corporations Act and ASX Listing (CSL, 2017, p. 46). They work to bring about all

the changes in their work practices as being brought in the ASX Corporate

Governance Principles. ASX also have a number of listing rules, which are followed

strictly by CSL as they are listed on ASX, and is one of the leading pharmaceutical

companies.

The core principle of CSL’s values and corporate philosophy is sustainability.

This is also a pledge to their employees, customers, and communities in which they

are operating, conducting their business in an ethical, safe and environmentally

ANNUAL REPORT ANALYSIS: CSL 7

friendly manner. The primary key is transparency for the company’s sustainability

approach, and for this, the Global Reporting Initiative gives them better knowledge of

their impacts and what is required for them to mitigate it. Starting with the

Sustainability Report of the company for the year 2016, they are now highlighting

those fields in which they are aligning with the United Nations Sustainable

Development Goals (SDGS) (CSL, 2017, p. 40) These internationally prevalent

targets and goals give a broader context to calculate the sustainability performance of

CSL and contribution toward the universal Sustainable Development Agenda of the

U.N

4) Identify and explain the following aspects of the company’s corporate

governance

Market Disclosure Policy

Disclosures (External and Communications)

There is a market policy for disclosure of sustainable practices within CSL for

external and communications. This policy allows the people to have the facilitation

with meeting the compliances of CSL. The rules have to be followed with listing rules

of ASX and Corporation Act accordingly as given below (CSL, 2017, P. 50):

● Briefing and guiding through the information which may need a disclosure.

The application of the rules is required practically.

● Deal with the market and then analyze through practical guidance

● Look into the right channels to proceed with the confidential information of

the company

● Have direct contact with the senior executives of the company like directors

to Communicate and then provide a prompt response for the information

required according to the disclosure.

ANNUAL REPORT ANALYSIS: CSL 8

Measurement indicators

Along with their formal disclosure obligation as per the Corporations Act and

Listing Rules of ASX, a variety of further communication means are used by the

Board in order to communicate directly with the investors and shareholders

worldwide (CSL, 2017, p. 39). These mostly include (CSL, 2017, p. 39)

● The annual and half-year shareholder review and report.

● The public announcements, posting media releases, notices of voting results

and general meetings, and various other information which are related to

investors on the website of CSL;

● General annual meetings, consisting of the webcasting that allows

shareholders worldwide to view the operating of CSL.

Reasons For Adopting Corporate Governance

Corporate governance of CSL comprises of a clear-cut framework for

accountability and decision-making across their business and gives guidance on the

behavior standards that we expect from each other. The governance framework is

developed to serve the following purposes:

 Timely, clear, and open communication with their shareholders

 Clear accountability, decision-making, and delegation framework.

 Robust risk assurance and management systems.

 CSL values, policy framework, and Code of Conduct that explains the

behavior standards they expect from each other as they deliver according to

their purpose and obtain goals (CSL, 2017, p. 28).

ANNUAL REPORT ANALYSIS: CSL 9

5) Identify connections between the company’s social, environmental and

corporate governance practices, and its strategy as discussed in Report 1

Industry and Strategy Analysis. That is, does the company’s social,

environmental and corporate governance practices support its strategy in any

way?

It aimed by CSL to get sustainable methods of operations that integrates well

in the environment with keeping in mind economic and social concerns. The company

is dedicated to set an example before the industry regarding the safety of the

environment and as well as pursuing such practices which will boost their financial

and nonfinancial performance (CSL, 2017, P. 39). The company is responsive as well

as open to the concerns of government, community, employees, and shareholders. On

environmental progress, the company has been regularly audited, monitored and

reported publicly. The company has been working on introducing more use of

technology so that the environment can be saved from different harmful outcomes

(CSL, 2017, P. 39).

One of the primary pillar of organization’s overall business and production

related environmental strategy is to work consistently to make its environmental

performance much better. When it comes to the environmental management, the

organization is exposed to multiple issue. To deal with all those issues, CSL has

established a cohesive Health, Safety and Environment Management (HSEM) system

to be able to attain its objectives in terms of environmental protection. All the CSL’s

activities regarding environmental protection are supervised by an all-inclusive

framework which consists of state and national level environmental rules and laws.

CSL regularly submit its reports to various government bodies about its performance

on environmental matters.
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In light of the strategic direction of the company, it’s social, environmental

and corporate practices serve the strategic direction. Through these practices, CSL is

able to become the leading company in Australia and serving the purposes in the best

interest of its stakeholders. The company is able to satisfy the needs of the

stakeholders through best possible ways. The policies are aligned in a way to facilitate

its employees and customers and deliver high quality services by adopting

environment friendly practices.

References

CSL, 2015. CSL CEO Says Corporate Responsibility And Sustainability Are All About

Continuous Improvement. [Online]

ANNUAL REPORT ANALYSIS: CSL 11

Available at: https://www.prnewswire.com/news-releases/csl-ceo-says-corporate-

responsibility-and-sustainability-are-all-about-continuous-improvement-

300195098.html

[Accessed 4 August 2018].

CSL, 2017. Annual Report. CSL Limited, pp. 42-44.

CSL, 2017. Annual Report - Corporate Governance. CSL, p. 39.

CSL, 2017. Annual Report - Director's Report. CSL, p. 58.

CSL, 2017. Annual Report - GRI. CSL, p. 14.

CSL, 2017. Annual Report - Market Disclosures. CSL, p. 50.

CSL, 2017. Annual Report - Role of the Board. CSL, p. 39.

CSL, 2018. Governance. [Online]

Available at: http://corporateresponsibility.csl.com.au/

https://www.cslships.com/sites/default/files/csl_environmental_policy_en_0.pdf

[Accessed 4 August 2018].

Group, C., 2018. CSL Environmental Policy. CSL Environmental Policy, p. 2.

United Nations., 2018. IAEG-SDGs: Tier Classification for Global SDG Indicators.

Available at https://unstats.un.org/sdgs/iaeg-sdgs/tier-classification/

CSL., 2008. CSL Limited: Global Environment Report 2008. Available at

https://www.seqirus-us.com/docs/154/323/CSL_ER_2008_i_final.pdf