Sustainability and Management Accounting



Sustainability and Management Accounting

Introduction

During recent times many large organizations are paying attention to the crucial issues of changing affects of climate, environment, sustainability, cleanliness, and going green. A lot of organizations are actually taking steps in this regard in form of several large scale initiatives or programs, which are aimed at improvisation of business growth, management of cost, correspondence with stakeholders and preparation with respect to fulfilment of regulatory requirements. It is ideal to create a integration between the strategies of sustainability and operations. Therefore, in order to execute such a strategy it becomes essential to ensure the reliability and effectiveness of internal processes and controls to make highly effective decisions and preparing means of sustainability reporting that addresses company's aims, plans, and past records and tasks pertaining to the stated agenda.

It is highly recommended and demanded by stakeholders like investors, creditors, suppliers, employees, customers and community members that non financial information pertaining to company's activities related to sustainability should also be shared and communicated. These reports are also known as corporate social responsibility, environmental social governance, and triple bottom line. These reports include organization's efforts and its operations' affect with respect to economical, societal, and environmental aspects. This information is utilized by stakeholders to estimate the reliability and long-term growth of a company. As per records, 3800 organizations in 2009 that published these kinds of reports and around 4000 companies in 2010 (kpmg.com, 2011).

Case Study No. 17.46: Sustainability Reporting

The sustainability report of a company is one that provides information regarding financial, atmosphere, societal, and ascendency status of the company (www.globalreporting.org, n.d.). It has existed for a longer period of time with respect to environment related issues in corporate world. It was firstly published in 1980s by several organizations operating in chemical industry and was coping from issues of bad name in this industry. It is similar to reporting of corporate social responsibility.

The majority of companies in corporate world prepare sustainability reports on annual basis in order to make its operations more transparent and consider itself as liable and accountable for its activities to the community and environment, and inform investors and business world regarding its various approach and operations in this regard. Many corporations also prepare these reports for the purpose of improvisation of internal procedures, engaging stakeholders and persuading existing and future investors.

All the companies are liable for improvisation of their sustainability functioning via these reports with a aim to measure, monitor, and report associated events. All of these activities would result in positive consequences that would significantly affect community, economy as a whole, and a viable future. The public listed companies are more interested in these days about operations of a company that are aimed at conducting business related activities in a way that is environment friendly and produce general positive results on society over all. Such arrangements would also result in positive growth of the organization as well. The benefits of sustainability reporting to an organization include enhancement of a ...