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Engineering Question
< Student’s ID>
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Q1: Examples of internal and external projects for an organization
An organization may undertake internal projects to bolster its strengths and efficiency. These
programs, which are typically internal to the business, are designed to improve internal
protocols. For example, developing a training program to help employees grow their skills or
implementing a new ERP system to enhance corporate procedures could be examples of internal
projects.
On the other hand, external projects are carried out for stakeholders or clients outside the
company. Delivering products or services to outside customers is the focus of these projects.
Examples include creating a residential complex for a real estate developer or creating
specialized software to meet the demands of a client’s operations (Kanwal et al., 2022).
PPM can be used for projects that are internal or external. For internal projects, PPM assists with
resource requirements assessment, effective resource allocation across projects, and prioritizing
initiatives based on alignment with organizational goals. PPM helps with the selection of
external projects that fit the organization’s strategic goals, assessment of their viability and
possible influence on the portfolio as a whole, and management of project delivery risks.
Question 2 : A project charter
According to Espach and Bekker (2023), the project charter is a fundamental document that
officially validates the project’s existence and gives the project manager the power to allocate
organizational resources to project-related tasks. It describes the goals, parameters, participants,
restrictions, and success standards of the project.
The PPM framework for managing project portfolios depends on project charters because they
set quantifiable success criteria, clarify the objectives and scope of individual projects, identify
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key stakeholders and their roles, and define project boundaries and constraints. PPM experts can
make sure that efforts are in line with company objectives, resources are allocated effectively,
and project outcomes are successfully tracked and reviewed by creating detailed project charters
for each endeavor in the portfolio.
Question 3 : Focus of “Project Management (PM)” vs. “PPM” over the PPM lifecycle
The primary objective of project management, or PM, is the successful completion of individual
projects within the constraints of schedule, money, scope, and quality. To achieve project
deadlines and budgetary restrictions, project management (PM) include daily supervision of
project operations, resources, and stakeholders. Performance metrics used in PM include quality
indicators, cost performance, schedule adherence, and stakeholder satisfaction (Barbosa and
Carvalho, 2023).
PPM on the other hand is concentrated on managing a portfolio of projects strategically. This
optimizes organizational value and accomplishes strategic goals. Project portfolio management
(PPM) includes managing risks at the portfolio level, allocating resources optimally throughout
the portfolio. It also involves choosing projects based on how well they correspond with
organizational goals, and guaranteeing that project investments yield returns.
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References:
Trzeciak, M., Kopec, T. P., & Kwilinski, A. (2022). Constructs of project programme
management supporting open innovation at the strategic level of the organisation. Journal
of Open Innovation: Technology, Market, and Complexity, 8(1), 58.
Kanwal, F., Tang, C., Ur Rehman, A., Kanwal, T., & Fawad Sharif, S. M. (2022). Knowledge
absorptive capacity and project innovativeness: the moderating role of internal and
external social capital. Knowledge Management Research & Practice, 20(5), 686-703.
Espach, J., & Bekker, M. C. (2023). Defining the Relational Charter for Commercial Project
Contracts. Procedia Computer Science, 219, 2051-2057.
Barbosa, M. T., & Carvalho, M. M. (2023). Toward a Multilevel Framework of Dynamic
Capabilities Through the Lens of Project Management, Project Portfolio Management,
and Project-Based Organizations. Project Management Journal, 87569728231207028.
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Purpose of the Report
The purpose of this report is to assess whether ARAMCO, a leading global energy
company, is following the International Financial Reporting Standards (IFRS) in its
sustainability reporting practices. The report aims to analyze ARAMCO’s adherence to IFRS
standards and evaluate the transparency, accuracy, and comprehensiveness of its sustainability
disclosures. By conducting this analysis, stakeholders, including investors, regulators, and the
general public, can gain insights into ARAMCO’s commitment to transparency and
sustainability.
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Summary of ARAMCO and IFRS Standards
IFRS S1 Summary
IFRS S1 establishes guidelines for entities to disclose sustainability-related financial
information. The standard applies to all entities required to prepare general-purpose financial
reports and aims to provide relevant and faithfully represented information about sustainabilityrelated risks and opportunities. It emphasizes the importance of comparative information,
requiring entities to disclose comparative data for all amounts reported in the current period,
enhancing transparency, and allowing users to assess changes over time accurately.
Additionally, the standard addresses metrics, errors, sources of guidance, and qualitative
characteristics, ensuring that sustainability-related financial information meets the needs of
users and enhances decision-making. IFRS S1 is effective for annual reporting periods
beginning on or after January 1, 2024, with earlier application permitted (IFRS S1, 2023, p.44).
Overall, the standard seeks to improve the quality and reliability of sustainability-related
financial disclosures, promoting transparency and accountability.
IFRS S2 Summary
IFRS S2 focuses specifically on disclosing information related to climate-related risks
and opportunities. It complements IFRS S1 by guiding and disclosing climate-related financial
information, considering the increasing importance of climate-related issues in decisionmaking. The standard applies to entities required to prepare general-purpose financial reports
and aims to enhance transparency and comparability regarding climate-related matters. IFRS
S2 requires entities to disclose information on climate-related risks, such as physical, transition,
and other climate-related risks, along with opportunities associated with climate change (IFRS
S2, 2023, p.5). It emphasizes the importance of providing timely, accurate, and understandable
disclosures to enable users to assess an entity’s exposure to climate-related risks and
3
opportunities effectively. IFRS S2 is effective concurrently with IFRS S1, and entities may
apply it earlier. By providing clear guidelines for disclosing climate-related information, the
standard contributes to better-informed decision-making and promotes sustainability.
The ARAMCO Company Sustainability Report Summary
The ARAMCO Company Sustainability Annual Report 2022 provides an overview of
ARAMCO’s sustainability-related initiatives, performance, and disclosures for the fiscal year
2022. The report aligns with the requirements of IFRS S1 and possibly IFRS S2, presenting
comprehensive information about ARAMCO’s sustainability practices and their financial
implications. It includes detailed disclosures on sustainability metrics, such as environmental
performance, social impact, and governance practices, in line with the qualitative
characteristics outlined in IFRS S1. Additionally, the report may highlight ARAMCO’s efforts
to address climate-related risks and opportunities, as required by IFRS S2, if applicable. By
providing transparent and reliable information about its sustainability practices, ARAMCO
aims to enhance stakeholder trust, promote accountability, and support informed decisionmaking. The report reflects ARAMCO’s commitment to sustainability and its efforts to
integrate environmental, social, and governance considerations into its business operations
(Aramco Sustainability Report, 2022, p.1). Overall, the ARAMCO Company Sustainability
Annual Report 2022 serves as a valuable tool for stakeholders to assess ARAMCO’s
sustainability performance and contributions to sustainable development.
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ARAMCO’s Compliance with IFRS Standard
Introduction
ARAMCO, formerly known as Saudi Arabian Oil Company, stands as one of the
globe’s foremost integrated energy and chemicals enterprises, spanning operations across tens
of nations. Given its expansive reach, ARAMCO’s sustainability reporting holds pivotal
importance in elucidating stakeholders on its environmental, social, and governance (ESG)
endeavors (Aramco Sustainability Report, 2022, p.8). The objectives of this report are twofold:
first, to meticulously assess ARAMCO’s alignment with International Financial Reporting
Standards (IFRS) in its sustainability disclosures, ensuring adherence to global reporting
norms; and second, to propose actionable recommendations aimed at bolstering transparency
and accountability within ARAMCO’s sustainability reporting framework. By examining the
extent to which ARAMCO’s disclosures align with IFRS standards, this report seeks to provide
valuable insights into the company’s commitment to sustainable practices and its efforts to
communicate them effectively to stakeholders.
Background
ARAMCO boasts a rich heritage of prioritizing sustainability, weaving environmental,
social, and governance (ESG) considerations intricately into its overarching business strategy.
The company’s steadfast commitment to sustainability encompasses a broad spectrum of
endeavors, ranging from combating climate change to fostering environmental stewardship and
social responsibility and upholding robust corporate governance practices (Aramco
Sustainability Report, 2022, p.96). Through its multifaceted sustainability initiatives,
ARAMCO endeavors to mitigate environmental footprints, foster social development, and
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steadfastly adhere to the principles of long-term value creation for its diverse array of
stakeholders. This background underscores ARAMCO’s profound dedication to sustainability.
It serves as the bedrock upon which its sustainability reporting practices are built, reflecting
the company’s unwavering commitment to transparency, accountability, and sustainable
development.
Data Findings and Analysis
ARAMCO’s sustainability reports stand out for their comprehensive disclosure of
environmental, social, and governance (ESG) factors, aligning closely with the standards set
forth by the International Financial Reporting Standards (IFRS). For instance, key metrics such
as carbon emissions, water usage, and community investments are transparently reported,
underscoring the company’s dedication to sustainability (Aramco Sustainability Report, 2022,
p.5). By providing such detailed information, ARAMCO ensures that stakeholders have a clear
understanding of its ESG performance and the impact of its operations on various aspects of
sustainability. Moreover, the reports demonstrate a remarkable level of clarity and accuracy in
presenting sustainability data, making it readily accessible to stakeholders. ARAMCO offers
detailed explanations of its ESG initiatives, facilitating comprehension of the company’s
sustainability efforts among stakeholders. This clarity not only enhances transparency but also
fosters trust and credibility in ARAMCO’s sustainability reporting practices.
In addition to clarity, ARAMCO’s sustainability disclosures enable comparability over
time and with industry peers. The company adheres to consistent reporting methodologies,
allowing stakeholders to assess its ESG performance effectively against historical data and
industry benchmarks. This comparability enhances stakeholders’ ability to evaluate
ARAMCO’s progress in meeting sustainability goals and industry standards. Furthermore, the
involvement of independent auditors in verifying sustainability data enhances the verifiability
6
of ARAMCO’s disclosures (Aramco Sustainability Report, 2022, p.23). Third-party assurance
of the company’s sustainability reports increases stakeholders’ confidence in the reliability and
accuracy of the information provided. By subjecting its sustainability disclosures to external
verification, ARAMCO demonstrates a commitment to transparency and accountability in
reporting its ESG performance.
ARAMCO also excels in publishing its sustainability reports in a timely manner,
aligning with the deadlines prescribed by IFRS standards. This ensures that stakeholders have
access to up-to-date information on the company’s ESG performance, allowing them to make
informed decisions. Additionally, ARAMCO conducts rigorous materiality assessments to
identify and prioritize significant sustainability risks and opportunities (Aramco Sustainability
Report, 2022, p.13). By focusing its disclosures on issues that are most relevant to stakeholders,
ARAMCO enhances the usefulness and relevance of the information provided in its
sustainability reports.
Outline
IFRS S1, also known as the “General Requirements for Disclosure of Sustainabilityrelated Financial Information,” establishes guidelines for entities to disclose sustainabilityrelated financial information. The standard applies to all entities required to prepare generalpurpose financial reports and aims to provide relevant and faithfully represented information
about sustainability-related risks and opportunities. It emphasizes the importance of
comparative information, requiring entities to disclose comparative data for all amounts
reported in the current period, enhancing transparency and allowing users to assess changes
over time accurately. Additionally, the standard addresses metrics, errors, sources of guidance,
and qualitative characteristics, ensuring that sustainability-related financial information meets
the needs of users and enhances decision-making. IFRS S1 is effective for annual reporting
7
periods beginning on or after January 1, 2024, with earlier application permitted (IFRS S1,
2023, p.44).
Overall, the standard seeks to improve the quality and reliability of sustainabilityrelated financial disclosures, promoting transparency and accountability. IFRS S2, titled
“Climate-related Disclosures,” focuses specifically on disclosing information related to
climate-related risks and opportunities. It complements IFRS S1 by providing guidance on
disclosing climate-related financial information, considering the increasing importance of
climate-related issues in decision-making. The standard applies to entities required to prepare
general-purpose financial reports and aims to enhance transparency and comparability
regarding climate-related matters. IFRS S2 requires entities to disclose information on climaterelated risks, such as physical, transition, and other climate-related risks, along with
opportunities associated with climate change (IFRS S2, 2023, p.5). It emphasizes the
importance of providing timely, accurate, and understandable disclosures to enable users to
assess an entity’s exposure to climate-related risks and opportunities effectively. IFRS S2 is
effective concurrently with IFRS S1, and entities may apply it earlier. By providing clear
guidelines for disclosing climate-related information, the standard contributes to betterinformed decision-making and promotes sustainability. The ARAMCO Company
Sustainability Annual Report 2022 provides an overview of ARAMCO’s sustainability-related
initiatives, performance, and disclosures for the fiscal year 2022. The report aligns with the
requirements of IFRS S1 and possibly IFRS S2, presenting comprehensive information about
ARAMCO’s sustainability practices and their financial implications. It includes detailed
disclosures on sustainability metrics, such as environmental performance, social impact, and
governance practices, in line with the qualitative characteristics outlined in IFRS S1.
Additionally, the report may highlight ARAMCO’s efforts to address climate-related risks and
8
opportunities, as required by IFRS S2, if applicable. By providing transparent and reliable
information about its sustainability practices, ARAMCO aims to enhance stakeholder trust,
promote accountability, and support informed decision-making. The report reflects
ARAMCO’s commitment to sustainability and its efforts to integrate environmental, social,
and governance considerations into its business operations (Aramco Sustainability Report,
2022, p.1). Overall, the ARAMCO Company Sustainability Annual Report 2022 serves as a
valuable tool for stakeholders to assess ARAMCO’s sustainability performance and
contributions to sustainable development. The purpose of this report is to assess whether
ARAMCO, a leading global energy company, is following the International Financial
Reporting Standards (IFRS) in its sustainability reporting practices. The report aims to analyze
ARAMCO’s adherence to IFRS standards and evaluate the transparency, accuracy, and
comprehensiveness of its sustainability disclosures. By conducting this analysis, stakeholders,
including investors, regulators, and the general public, can gain insights into ARAMCO’s
commitment to transparency and sustainability. ARAMCO, formerly known as Saudi Arabian
Oil Company, stands as one of the globe’s foremost integrated energy and chemicals
enterprises, spanning operations across tens of nations. Given its expansive reach, ARAMCO’s
sustainability reporting holds pivotal importance in elucidating stakeholders on its
environmental, social, and governance (ESG) endeavors (Aramco Sustainability Report, 2022,
p.8). The objectives of this report are twofold: first, to meticulously assess ARAMCO’s
alignment with International Financial Reporting Standards (IFRS) in its sustainability
disclosures, ensuring adherence to global reporting norms; and second, to propose actionable
recommendations aimed at bolstering transparency and accountability within ARAMCO’s
sustainability reporting framework. By examining the extent to which ARAMCO’s disclosures
align with IFRS standards, this report seeks to provide valuable insights into the company’s
commitment to sustainable practices and its efforts to communicate them effectively to
9
stakeholders. ARAMCO, boasts a rich heritage of prioritizing sustainability, weaving
environmental, social, and governance (ESG) considerations intricately into its overarching
business strategy. The company’s steadfast commitment to sustainability encompasses a broad
spectrum of endeavors, ranging from combating climate change to fostering environmental
stewardship, social responsibility, and upholding robust corporate governance practices
(Aramco Sustainability Report, 2022, p.96). Through its multifaceted sustainability initiatives,
ARAMCO endeavors to mitigate environmental footprints, foster social development, and
steadfastly adhere to the principles of long-term value creation for its diverse array of
stakeholders. This background underscores ARAMCO’s profound dedication to sustainability
and serves as the bedrock upon which its sustainability reporting practices are built, reflecting
the company’s unwavering commitment to transparency, accountability, and sustainable
development. ARAMCO’s sustainability reports stand out for their comprehensive disclosure
of environmental, social, and governance (ESG) factors, aligning closely with the standards set
forth by the International Financial Reporting Standards (IFRS). For instance, key metrics such
as carbon emissions, water usage, and community investments are transparently reported,
underscoring the company’s dedication to sustainability (Aramco Sustainability Report, 2022,
p.5). By providing such detailed information, ARAMCO ensures that stakeholders have a clear
understanding of its ESG performance and the impact of its operations on various aspects of
sustainability. Moreover, the reports demonstrate a remarkable level of clarity and accuracy in
presenting sustainability data, making it readily accessible to stakeholders. ARAMCO offers
detailed explanations of its ESG initiatives, facilitating comprehension of the company’s
sustainability efforts among stakeholders. This clarity not only enhances transparency but also
fosters trust and credibility in ARAMCO’s sustainability reporting practices. In addition to
clarity, ARAMCO’s sustainability disclosures enable comparability over time and with
industry peers. The company adheres to consistent reporting methodologies, allowing
10
stakeholders to assess its ESG performance effectively against historical data and industry
benchmarks. This comparability enhances stakeholders’ ability to evaluate ARAMCO’s
progress in meeting sustainability goals and industry standards. Furthermore, the involvement
of independent auditors in verifying sustainability data enhances the verifiability of
ARAMCO’s disclosures (Aramco Sustainability Report, 2022, p.23). Third-party assurance of
the company’s sustainability reports increases stakeholders’ confidence in the reliability and
accuracy of the information provided. By subjecting its sustainability disclosures to external
verification, ARAMCO demonstrates a commitment to transparency and accountability in
reporting its ESG performance. ARAMCO also excels in publishing its sustainability reports
in a timely manner, aligning with the deadlines prescribed by IFRS standards. This ensures that
stakeholders have access to up-to-date information on the company’s ESG performance,
allowing them to make informed decisions. Additionally, ARAMCO conducts rigorous
materiality assessments to identify and prioritize significant sustainability risks and
opportunities (Aramco Sustainability Report, 2022, p.13). By focusing its disclosures on issues
that are most relevant to stakeholders, ARAMCO enhances the usefulness and relevance of the
information provided in its sustainability reports. ARAMCO’s sustainability reporting
practices exhibit a strong alignment with the principles delineated in the International Financial
Reporting Standards (IFRS), underscoring the company’s dedication to transparency and
accountability in divulging Environmental, Social, and Governance (ESG) related information.
The comprehensive nature of ARAMCO’s disclosures, covering a wide array of sustainability
metrics such as carbon emissions, water usage, and community investments, mirrors its
commitment to adhering to IFRS standards(Aramco Sustainability Report, 2022, p.23). While
ARAMCO demonstrates commendable strengths in various aspects of sustainability reporting,
there exist potential areas for improvement. For instance, enhancing the granularity of
disclosures and providing additional context around performance targets could augment the
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comprehensiveness and usefulness of the information provided. By providing stakeholders
with more detailed insights into its sustainability initiatives and outlining clear performance
objectives, ARAMCO can further strengthen its reporting framework. The engagement of
independent auditors to verify sustainability data serves as a testament to ARAMCO’s
commitment to ensuring the accuracy and reliability of its disclosures (Aramco Sustainability
Report, 2022, p.32). By subjecting its sustainability reports to third-party verification,
ARAMCO enhances the credibility of its disclosures, instilling greater confidence among
stakeholders regarding the integrity of the reported information. This proactive approach to
verification underscores ARAMCO’s dedication to upholding the highest standards of
transparency and accountability in its sustainability reporting practices. In conclusion, the
analysis of ARAMCO’s sustainability reporting practices indicates a strong alignment with the
International Financial Reporting Standards (IFRS) standards, demonstrating the company’s
commitment to transparency and accountability in disclosing Environmental, Social, and
Governance (ESG) related information. ARAMCO’s comprehensive disclosures, including
key metrics and third-party verification, enhance the reliability and credibility of the reported
information, thereby fostering trust among stakeholders. While ARAMCO’s sustainability
reporting is commendable, there are opportunities for improvement to further enhance
stakeholders’ understanding of the company’s ESG performance. By addressing these areas for
enhancement, such as providing clearer articulation of performance targets and enhancing the
granularity of disclosures, ARAMCO can reinforce its leadership position in sustainability
reporting within the energy sector.
Conclusion
In conclusion, the analysis of ARAMCO’s sustainability reporting practices indicates a
strong alignment with the International Financial Reporting Standards (IFRS) standards,
demonstrating the company’s commitment to transparency and accountability in disclosing
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Environmental,
Social,
and
Governance
(ESG)
related
information.
ARAMCO’s
comprehensive disclosures, including key metrics and third-party verification, enhance the
reliability and credibility of the reported information, thereby fostering trust among
stakeholders. While ARAMCO’s sustainability reporting is commendable, there are
opportunities for improvement to further enhance stakeholders’ understanding of the company’s
ESG performance. By addressing these areas for enhancement, such as providing clearer
articulation of performance targets and enhancing the granularity of disclosures, ARAMCO
can reinforce its leadership position in sustainability reporting within the energy sector.
References
Aramco Sustainability Report. (2022). Investing in growth Innovating for sustainability.
https://www.aramco.com/en/sustainability/sustainability-report
IFRS S1. (2023). General Requirements for Disclosure of Sustainability-related Financial
https://www.ifrs.org/content/dam/ifrs/publications/pdf-standardsissb/english/2023/issued/part-a/issb-2023-a-ifrs-s1-general-requirements-fordisclosure-of-sustainability-related-financial-information.pdf?bypass=on
IFRS S2. (2023). Sustainability Disclosure Standard.
https://www.ifrs.org/content/dam/ifrs/publications/pdf-standardsissb/english/2023/issued/part-a/issb-2023-a-ifrs-s2-climate-relateddisclosures.pdf?bypass=on
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