Assessing the Role of Accounting in Corporate Sustainability Efforts

This report delves into the crucial role of accountants in promoting corporate sustainability. It examines the growing importance of integrating environmental and social considerations into business practices, driven by investor demand and societal expectations. The report analyzes the impact of integrated reporting on decision-making, risk management, and stakeholder confidence. It also discusses the ethical responsibilities of businesses towards future generations and the need for sustainable resource management. Case studies of companies like Nike and Walmart illustrate the consequences of neglecting sustainability and the benefits of adopting ethical practices. The report emphasizes the significance of corporate governance, ethical standards, and transparency in achieving long-term success and contributing to a sustainable world.

RUNNING HEAD: Accounting
Accounting
Can accountants save the planet?

Can accountants save the planet? 1
Contents
Answer to Questions..............................................................................................................................2
Q. 1....................................................................................................................................................2
Q. 2....................................................................................................................................................2
Q. 3....................................................................................................................................................3
Q. 4....................................................................................................................................................3
Q. 5....................................................................................................................................................4
Q. 6....................................................................................................................................................4
Q. 7....................................................................................................................................................5
Q. 8....................................................................................................................................................5
Q. 9....................................................................................................................................................6
Q. 10..................................................................................................................................................6
References.............................................................................................................................................7

Can accountants save the planet? 2
Answer to Questions
Q. 1
Companies are now more focused on corporate governance and sustainability. The past
experience of Nike and other companies as mentioned in the case study shows that companies
which are not considering the sustainability aspect, failed drastically in financial terms. Now
investors also understood that there is a strong relationship between financial performance
and sustainability performance. Data about sustainability performance are now important
decision criteria of investment decision by investors as these data can speak about future
risks. Investors are making investment decision depending on economic, social and
governance performance of a company. It gives the overall performance of a company. New
generation customers and society is now more concerned about the seriousness about
sustainability aspect of a business; in this way it is very logical that stakeholders are making
good investment decisions while considering sustainability aspect. Consideration of
Sustainability is must for growth and survival of a company (Hafenstein & Bassen, 2016).
Q. 2
In my opinion, we owe moral duty to our future generations to come. With the advent of
sustainability concept, now we are ethically concerned about our responsibilities towards our
future generation. We should use our resources in such a manner that we should develop and
preserve those resources for our future generations. As an individual or as a business
organisation, collectively we should work for sustainable development of resources. We must
focus on optimum use of resources. Business organisation should allow their employees to
voluntary contribute towards society. Also business organisations should contribute towards
the society in which it operates. Business organisations must follow good corporate
governance practices, ethical standards and maintain people account and planet account.
Proper reporting of sustainability regarding business organisation must enabled. It will give a
framework to sustainability measurement for corporates. Survival of an organisation depends
on customer base of that organisation (Ha-Brookshire, 2015). In this manner, it very

Can accountants save the planet? 3
important that we, being individual or part of a big organisation should consider sustainable
development of our resources so that our future generation can use those resource in the same
manner we are using.
Q. 3
Integrated reporting is clear, concise and integrated communication of how all resources are
being used by organisation to create value. According to my view, the desirability of
integrated reporting is a necessary implementation which every company must follow. There
are several good consideration points about it. The Integrated reporting can help business to
take informed decisions as it provides a comprehensive single view and reorienting.
Integrated Reporting provides a comprehensive and holistic thought process to develop
strategies, plans to manage risks and gain stakeholders’ confidence. This reporting is
desirable as it increase the reported data quality. This report enables the better understanding
of board about the organisation and most importantly it focuses on the measurement of long
term success of a business. Experts also advocated the fact that only through integrated
reporting, a business organisation can report on sustainability performance, financial
performance, risk profile and future strategy altogether (Klettner, Clarke & Boersma, 2014).
Q. 4
There is a need of Integrated Reporting and it can benefit business organisation in many
ways. But it is also a considerable point that there are some practical issues and challenges
associated with transition from traditional reporting to integrated reporting. An Integrated
Report should compile the financial and sustainability regarding information in a better
manner, to enable better communication of information. The compiling task must be done by
experts. In many organisation it is done by ateam of accountants who may have access to all
required data and information (Cheng et al., 2014). When the report is not complied well then
it may lose its primary purpose and significance. The credibility of information reported is an
important issue as it needs a balance mix of qualitative and quantitative information and
related assurance. As the report is very data heavy, another issue it about how the report is be
to better designed content wise. The report must provide all forward-looking information,

Can accountants save the planet? 4
sometimes it is experienced that backward information are more importantly reported in
Integrated Reports. Lack of proper planning and coordination mat result poor quality of
Integrated reporting (Cheng et al., 2014).
Q. 5
It is elementary that King’s view about integrated reporting is partially correct. The evolution
is there and it is along with evolution of better sustainability reporting and better corporate
governance. But research shown that this argument is not the only factor influencing this.
There are many other factors. Companies are moving toward integrated reporting where there
is larger societal and environmental impact is created by their organisation. Better corporate
governance is reported through sustainability reporting and many a time it is conflicting as it
influenced by political pressure social pressure. It has been found through various research
and country specific approach that sometimes sustainability performance and corporate
governance performance reporting is increased but ground level respective performance was
not up to the mark (Peters & Romi, 2014).
Q. 6
Integrated Reporting is concerned with organisation’s communication about how its strategy,
performance, corporate governance and risk aspect going to create value in short, medium
and long-term context for itself and society at large. Through integrated reporting, business
organisation comprehensively report and communicates about its performance with respect to
sustainable approach; it is about integration of purpose, value and strategy of organisation to
better perform today and tomorrow. This report provides a clear view about an organisation is
utilising its resources in a sustainable manner with long term vision. It enables board member
and executives to a point of thought leadership where they can analyse and strategize their
organisation’s future with respect to creating sustainable world at large (Frias‐Aceituno,
Rodríguez‐Ariza & Garcia‐Sánchez, 2014).

Can accountants save the planet? 5
Q. 7
Regarding the mentioned issue of BP, being market leader and earned respected position in
sustainability aspect provides companies a better image of corporate citizen. The BP incident
shows that sustainability is a forward-looking approach, it interprets that companies which
are good performer of sustainability in past, must be doing the same in present and future to
contribute in sustainable manner. Sustainability development is a continuous process, it is not
a backward looking but it is always forward-looking aspect. Through Integrated reporting BP
must provide its justification and make a clear stand about the whole incident, it will show a
better delivery of corporate responsibility towards sustainable development (Holden,
Linnerud & Banister, 2017). As shareholders are now more concerned about the facts of
sustainability performance, so in this aspect BP must reconsider this incident and show some
corporate philanthropy and improve its sustainable performance information.
Q. 8
Nike is global leader in its industry, has faced the heat of not accompanying proper
sustainable practices. It results decreasing revenue and diminishing corporate image. But it
has taken many corrective steps to improve both. Nike has increased the minimum age of
workers in its factories to 16 years. They promised and practised the same; when any child
labour found in factories below 16 years they are eliminated from work and given stipend for
school education and guaranteed with job at legal working age. Nike has provided training
and organised different workshops for their factory employees to educate them about Nike
Code of Conduct. It has implemented factory audits and made those report public through
their corporate social responsibility reporting. They also published complete list of factories
which are in contract. Nike has set up compensation fund for their employees and employee
welfare became their focal point and the same has been reported and made publicly available.
In this manner Nike was able reclaim its good corporate citizen image through considering
betterment of its resources (labour, factories) and reporting about them (Kaplan & Montiel,
2016).

Can accountants save the planet? 6
Q. 9
From 2006 incident, Walmart learned that ethical and social responsibility aspect must be
considered into business strategy. Investors are concerned with financial performance, but it
is not the only parameter on which of which they invest in some business. In this case
Norwegian government pension fund was not impressed with Walmart’s strategy with
regards to its employees and environmental aspect. This incident forced Walmart to
reconsider its ethical standards regarding sourcing of products in an ethical and socially
responsible way. Consumers are now more concerned about ethical standards when they are
making a purchase decision. It guides Walmart to reconsider its choice of suppliers and they
moved to suppliers who are socially responsible and aligned with their ethical standard
program. Social responsibility is not an aspect which is just concerned about its own business
operation but it is also concerned about how a business is dealing with related business
partners who are also socially responsible (Spicer & Hyatt, 2017).
Q. 10
Future generation will be more connected and responsible towards their society and
environment. They will be the generation where concept of sustainability will become the
performance parameter of any business organisation. Business organisation must make
strategies which are more socially viable, environmentally goodand focused towards
sustainable development. Every Business organisation should under that they are serving a
consumer base which more pro-active, more connected and more responsible towards
sustainable world. It indicates that in future, only those organisations will be successful
which are more concerned about their sustainable performance in actual and trying to become
an ethical corporate social citizen (Holden, Linnerud & Banister, 2017).

Can accountants save the planet? 7
References
Cheng, M., Green, W., Conradie, P., Konishi, N., &Romi, A. (2014). The international
integrated reporting framework: key issues and future research opportunities. Journal
of International Financial Management & Accounting, 25(1), 90-119.
Frias‐Aceituno, J. V., Rodríguez‐Ariza, L., & Garcia‐Sánchez, I. M. (2014). Explanatory
factors of integrated sustainability and financial reporting. Business strategy and the
environment, 23(1), 56-72.
Ha-Brookshire, J. (2015). Toward moral responsibility theories of corporate sustainability
and sustainable supply chain. Journal of Business Ethics, 1-11.
Hafenstein, A., &Bassen, A. (2016). Influences for using sustainability information in the
investment decision-making of non-professional investors. Journal of Sustainable
Finance & Investment, 6(3), 186-210.
Holden, E., Linnerud, K., & Banister, D. (2017). The imperatives of sustainable
development. Sustainable Development, 25(3), 213-226.
Kaplan, J., & Montiel, I. (2016). East vs. West Approaches to Reporting Corporate
Sustainability Strategies to the World: Corporate Sustainability. Comparative
Perspectives on Global Corporate Social Responsibility, 49.
Klettner, A., Clarke, T., &Boersma, M. (2014). The governance of corporate sustainability:
Empirical insights into the development, leadership and implementation of
responsible business strategy. Journal of Business Ethics, 122(1), 145-165.
Peters, G. F., & Romi, A. M. (2014). The association between sustainability governance
characteristics and the assurance of corporate sustainability reports. Auditing: A
Journal of Practice & Theory, 34(1), 163-198.
Spicer, A., & Hyatt, D. (2017). Walmart’s Emergent Low-Cost Sustainable Product
Strategy. California Management Review, 59(2), 116-141.