4.1. Accounting for Sustainability Flashcards
Sustainable development…
Development that meets the needs of the present without compromising the ability of future generation to meet their own needs.
Balance between needs.
Brundtland Report provided this definition in 1997 and set the agenda for sustainable development (Agenda 21).
Economic sustainability…
Aims to preserve the economic wellbeing of future generations.
Promotes technological and organisational developments.
Focuses on the production of resources to meet the needs of future generations.
Environmental sustainability…
Eco-efficiency.
Promotes efficient use of resources to preserve them for future generations.
Encourages biodiversity.
Social sustainability…
Eco-justice.
Promotes the fair distribution of the benefits from development to different societies and communities.
Considers intragenerational and intergenerational equity.
Sustainable development goals…
17 goals that guide individuals and businesses into becoming more sustainable.
169 targets include a variety of objectives, such as ‘no poverty’, ‘climate action’ and ‘affordable and clean energy’.
Businesses and sustainable development…
Private sector accounts for the majority of jobs, capital flow and 60% of GDP.
It is essential the private sector responds and engages with the sustainable development goals, developing business-led solutions and enhancing corporate sustainability.
Accountancy and sustainable development…
Accountants will becoming increasingly in higher demand with sustainable development.
Governance, risk management and control, business analysis and decision support will be in higher demand to go ‘green’.
Corporate sustainability…
Embed and recognise sustainability as an objective in the decisions companies make:
- New products that are developed should be more sustainable and more efficient.
- Raw material acquisition should be sustainable.
- Capital that is invested should be invested into companies with positive environmental ratings.
Produce a sustainability report:
- Moving beyond conventional accounting as this does not consider sustainability.
Capitalism and sustainability…
Since the Industrial Revolution, the focus has been on profit-maximisation and cost-minimisation.
Is there a limit to how far businesses should take profit maximisation?
ESG…
A set of standards measuring a corporation’s impact on society, the environment and about being more transparent and accountable.
Environmental, social and governance factors.
Sustainable accounting…
Considers environmental and social efforts.
Considers that organisations are accountable for their stakeholders, which includes the environment.
Also a legitimising act, as companies can prove they are acting responsibly.
Liberal economic democracy…
Believes individuals are free and choose how to act.
Freedom is exercised through elections.
Global Reporting Initiative 1997…
A multi-stakeholder organisation with members from both the business and public sector.
A set of standards for sustainability reporting.
Funded by the Coalition for Environmentally Responsible Economies and United Nations Environmental Programmes.
International integrated reporting council…
Focuses on the production of a report containing information about how an organisation’s strategy, governance, performance and prospects lead to value over the short, medium or long term.
Silent and shadowing accounting…
Silent: analysis of the organisational report.
Shadow: analysis of external sources. This contrasts with organisational reports.
