Comunidad Sani Isla

In this section key terminology used in this study is defined.

1.7.1 Sustainability

The first definition of sustainability was articulated by the Bruntland Commission who recognised the interdependence of economic, social and environmental factors. The Brundtland Commission defined sustainable development as “development that meets the needs of the present without compromising the ability of future generations to meet their own needs.” This

definition emphasises the notion of ‘needs’, specifically the needs of the poor, and the notion of limited environmental resources. (United Nations 1987 IN Jones 2010:11). According to Williams, Wilmshurst and Clift (2011:177) the Brundtland definition of sustainability is very general and as a result has been criticised for being confusing, vague and incomprehensible. As a result, many more definitions of sustainability have been developed (Williams et al. 2011:177).

The King III Report and Code on Governance in South Africa (King III) definition of sustainability is very closely aligned with the original Brundtland definition, by defining sustainability as “conducting operations in a manner that meets existing needs without compromising the ability of future generations to meet their needs.” The King III definition also acknowledges the impact that a business’ operations have on the social and natural environment in which it operates. In addition to the economic, social and environmental issues, King III considers governance issues which also need to be reported on by entities. (IOD 2009:11). While each definition or term for sustainability has its own individual nuance, there remains a common thread which stems from the original Brundlandt definition of sustainable development which focuses on meeting the needs of the present without compromising the ability of meeting future needs.

1.7.2 Sustainability Disclosures / Reporting

Junior, Best and Cotter (2014:2) refers to sustainability disclosures as a vital tool for business communicating its social and environmental impacts to stakeholders. Others define sustainability disclosures as a mechanism for providing information to external and internal stakeholders on the economic, social and environmental results achieved by an entity (Bowers 2010 IN Leszczynska 2012:911; Habek 2014:1740; Kaur & Lodhia 2014:54). According to the Global Reporting Initiative (GRI) guideline, sustainability reporting is “the practice of measuring, disclosing, and being accountable to internal and external stakeholders for organisational performance towards the goal of sustainable development” (GRI 2011 IN Van der Ploeg & Vanclay 2013:3). A sustainability report is defined by the GRI guideline as “a single, consolidated disclosure that provides a reasonable and balanced presentation of performance over a fixed period.” (GRI 2011 IN Marx & Van Dyk 2011a:42). The GRI (2012:7) has identified that organisational reporting has an impact on organisational behaviour.

sustainability reporting, the report explicitly labelled as a ‘sustainability report’, and sustainability disclosures which are included in any annual published report (refer to Table 1.1 for the definition of annual published report).

1.7.3 Other Key Concepts Defined

The following table defines other concepts which are important for this study. Table 1.1: Summary of key concepts of importance to this study

CONCEPT DEFINED

DEFINITION FOR PURPOSES OF

THIS STUDY SOURCES

1 Annual published report

The annual published report has been used as a generic term in this study and is considered to be the primary report used by the reporting entity to account for its holistic performance for the reporting period.

The term ‘annual published report’ is used when referring to the reports analysed in this study, and includes reports labelled as annual reports or integrated reports.

Where reference is made to an annual report or integrated report specifically, this is because the actual report was labelled as such.

No reference

2 Content categories The term content category has been adapted from the GRI G4 guideline but does not include the content categories specifically set out in the GRI guideline. The content categories included in this study have been adapted from the GRI G4 guideline, the integrated reporting framework, the JSE SRI and King III. The content categories in this study include: Strategic focus and future orientation, stakeholder engagement, board practices, composition and remuneration, economic disclosures, social disclosures, environmental disclosures, and disclosures included in the performance report.

CONCEPT DEFINED

DEFINITION FOR PURPOSES OF

THIS STUDY SOURCES

3 Content indicators A distinction needs to be made between the content categories and content indicators. The content indicators are the various constituents of the economic, social and environmental content

categories, and are scored independently using the coding frame in Annexure D.

No reference 4 Corporate responsibility/ socially responsible behaviour/ sustainable behaviour

Operating/behaving in a manner which considers not only the economic impact of such behaviour, but also the impact on society and on the environment, with more focus on the long-term

consequences on current actions. These three concepts may be used interchangeably.

Williams et al. (2011:176, 177); Farneti and Guthrie (2009:90)

5 Entity An entity is any natural or juristic person recognised by law. For the purpose of this study, an entity would mean a juristic person, and would mostly relate to a public entity which refers to an entity established for political purposes and which is accountable to parliament or provincial legislature as indicated below. If reference is made to a private entity, this will be explicitly stated.

Companies Act No. 71 of 2008 section 1; GRI Sector Supplement (2005:7) PFMA 1999 section 1 6 Financial year/ reporting period

A financial year would ordinarily be considered to be a 12-month period.

Companies Act No. 71 of 2008 section 27

7 Materiality Materiality, in the context of both financial and non-financial reporting, considers the importance of matters reported on. The importance of these matters is decided on based on the ability of such matters to impact the decisions of users of such reports.

CONCEPT DEFINED

DEFINITION FOR PURPOSES OF

THIS STUDY SOURCES

8 Public entity A public entity is an entity which is established for political purposes, with the primary function of providing goods or services to society, and whose

operations are fully or substantially funded either from a National (or Provincial) Revenue Fund, or through taxes or levies. Public entities are accountable to parliament or

accountable to a provincial legislature. Public entities are those entities that are incorporated in terms of the Companies Act and listed in Schedules 2 and 3 of the PFMA, or are owned by

municipalities. For purposes of this study, the focus will be on those entities listed on Schedules 2 and 3 of the PFMA.

Companies Act No. 71 of 2008 section 1; GRI Sector Supplement (2005:7) PFMA 1999 section 1

9 Private entity Private entities are entities established with the objective of a profit-motive.

GRI (2005:7) 10 Quality (of

disclosures)

The concept of quality in this study has been evaluated in terms of adherence of sustainability disclosures to the quality principles as well as the nature and extent of disclosures in the content categories. Refer also to the definitions of quality principles and content categories.

No reference

11 Quality principles The term quality principle has been adapted from the GRI G4 guideline but does not include the quality principles specifically set out in the GRI guideline. The quality principles included in this study have been adapted from the GRI G4 guideline, the integrated reporting framework, the JSE SRI and King III. The quality principles in this study include: Balance, comparability and consistency, timeliness, reliability, accuracy and completeness, and clarity, materiality and conciseness.

CONCEPT DEFINED

DEFINITION FOR PURPOSES OF

THIS STUDY SOURCES

12 Shareholder/ investor

The holder of any shares issued by an entity, and who, as a result of this holding is included in the certificated or uncertificated securities register.

Companies Act No. 71 of 2008 section 1.

13 Stakeholder All parties which are significantly impacted by or have the ability to significantly influence the ability of the entity in meeting its objectives.

Stakeholders have also been defined as ‘the licensors of the business of the company’ because it is the stakeholder who provides any business with its ‘license to operate’.

Examples of stakeholders are employees, suppliers, customers, regulators and vulnerable groups within the local community.

Kaur and Lodhia (2014:57); Marx and

Mohammadali-Haji (2014:234);

Marx and Van Dyk (2011a:42);

Marx and Van Dyk (2011b:106); GRI (2011:10) G3.1

The key concepts defined in Section 1.7 will be used throughout the study.