Accounting Theory and Accountability

Running head: ACCOUNTING THEORY AND ACCOUNTABILITY
Accounting Theory and Accountability
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1ACCOUNTING THEORY AND ACCOUNTABILITY
Executive Summary
The report intends to analyse as well as evaluate certain crucial environmental and social
performance measures for the companies with the aim to tie them with the bonus or incentive
structure of the boards or senior managements of the companies. The report shows four
performance measure of the Board in environmental issues; they are Emission of Greenhouse
Gas, Waste Reduction, Usage of Energy and Savings and Development of Product through
Minimizing Environmental Impact. The report also discusses about five performance
measure related to social issues regarding employees and customers; they are Employee
Injury Rate, Employee Engagement, Strategic Community Investments, Stakeholder
Management Indicators and Consumer Complaints. The outcome of this report indicates
towards the importance towards the sustainability reporting and triple bottom line reporting.
The findings of the report states that the sustainability reporting or triple bottom line
reporting provides the companies with the opportunity to effectively communicate their
strategies and progress towards the major environmental and social issues with their key
stakeholders. The outcome of this report shows that the environmental sustainability and
social issues related performance measures should be connected with the incentives of the
Board in the presence of the aspect that this inclusion will create an obligation on the Boards
of the companies to mandatory consider these social, environmental and sustainability related
issues through providing information on these aspects so that the key stakeholders can know
about these. This provides advantage to the companies and society because of the fact that
these performance measures would lead to generate shared-value for both the parties

2ACCOUNTING THEORY AND ACCOUNTABILITY
Table of Contents
Introduction................................................................................................................................3
Sustainability Reporting, TBL and Global Reporting Initiatives...............................................3
Performance Indicators to Tie Executive Bonuses to Environmental Performance..................4
Performance Measures Relating to Social Issues.......................................................................7
Conclusion..................................................................................................................................9
References................................................................................................................................11

3ACCOUNTING THEORY AND ACCOUNTABILITY
Introduction
Sustainable business has become a major trend in the businesses all over the world
due to the increased attention of the stakeholders regarding various environmental and social
issues. Sustainable business is considered as a business that has minimum negative effects of
their business operations on the local or global environment and the community (Rankin et
al., 2018). This puts the obligation on the companies to take into account different
environmental sustainability related issues through providing major importance to them.
There are certain companies all over the world those have been successful in bonding the
bonuses of the senior management with the company’s performance in the areas of
environmental, sustainability and social performance. There are two parts of the report. The
objective of the first part of the report is to discuss about certain performance indicators that
can be tied with the executive bonuses related to environmental performance. The objective
of the second part of the reports is to discuss about certain performance measures related to
the social issues such as customer and employee relation and others.
Sustainability Reporting, TBL and Global Reporting Initiatives
In this context, it needs to be mentioned that Sustainability Reporting has major
relevance with this particular case due to the presence of increased significance of
sustainability development to businesses. Sustainability reporting can be considered as a form
of corporate social responsibility reporting for disclosing the information on the company’s
strategies to address the material sustainability issues (Magee et al., 2013). In this context,
another major relevant aspect is the Triple Bottom Line (TBL) reporting which takes into
consideration three main areas of sustainability reporting that are economic, environmental
and social development. More specifically, TBL or sustainability report is considered as a
report that not only disclose the economic information of a firm, but provides such