BAC204: Holmesglen's Sustainability Reporting in Management Accounting

This report provides a comprehensive overview of sustainability reporting within the context of advanced management accounting. It explores the importance and role of sustainability reporting, emphasizing its impact on economic, environmental, and social aspects of a company's operatio...Read More

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ADVANCED
MANAGEMENT
ACCOUNTING

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Contents
Importance and role of SUSTAINABILITY REPORTING:.....................................................3
Key performance indicators for sustainability reporting:..........................................................4
Alternative performance measures:............................................................................................5
Steps to encourage the staff:......................................................................................................6
References..................................................................................................................................8

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Importance and role of SUSTAINABILITY REPORTING:
The concept of sustainability reporting is about the economic, environmental and the social
impacts that the company has on the day to day activities of the company. It is the one that
represents in the values of the organisation and the model of governance and also indicates in
the link that exists between the strategy and the commitment to the sustainable global
economy.
It helps the organization in organizing, measuring, and understanding and the communicating
of the economic, environmental, social and the governance performance. This helps in the
setting up of the goals and also in the management of the changes more effectively and
efficiently. This report serves as the main platform for the communication of the
sustainability and its performance and its impacts, these could be either positive or be
negative.
The main role of the sustainability reporting is in the building up and in the maintaining of
the trust in the various different businesses and in the governments which is fundamental to
the achievement of the sustainable economy and also to the world. Each and every day, they
make decisions that have a direct bearing on the various stakeholders involved. These
stakeholders include the financial institutions, the labour organisations etc. the decisions
taken in by the management are the ones that are based upon the assessment of the risk and
the opportunities that are used by using in the information of the immediate and the future
issues.
The core issue in the process of reporting is the fact that it makes sure that all of these
companies’ considers in the impacts on the issues of sustainability. This further helps them in
being transparent all about the risks that are involved and the opportunities that they face.

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There are some non-financial factors as well. There is an increased transparency by the way
of using in this concept and this helps in better decision making.
Any public company must publish their sustainability reports so show in that they are
cautious about their stakes and their responsibilities towards the people and the society. These
are the reports that are released in by the companies and by all of the organisations lf all
types, sizes etc.
There have been thousands of companies that have published in their reports with reference
to the GRI’s sustainability reporting guidelines. There are many public authorities and the
non-profit companies that are also big reporters (Global Reporting, 2018).
The companies that have established sustainability reports are more likely to get investment
in them as when compared with the other public companies (Stubbs, 2013).
Key performance indicators for sustainability reporting:
The key performance indicators and the targets helps in the tracking in of the economic,
social and the ecological performance of the company. These are used for the purposes of
measuring the progress and also for the identification of the scope of improvement for these
companies. There are many of the recognised standards that are considered for the purposes
of selecting and publishing the non-financial data.
For any company, there are many of the decisions that are driven in by their ability to create
in value for the company. The incorporation of the data into these decision provides to be of
value to the company and also provide in the information for the purposes of benchmarking
for the purposes of maintaining in the competitive advantage. By the way of tracking the

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sustainability key performance indicators, the company would be able to see the efforts in
numbers. The following are few of the key performance indicators for sustainability:
1. Utility Consumption: the main inputs into the buildings comprise of electricity,
water and gas. The people would want to know the exact number of units of each
scarce resource that the company is using.
2. Waste: this is more like output. This is where one goes that could change in the green
ness of the building. After the company has successfully calculated the waste it has
bene generating, it can easily calculate in the efforts that are required to address in
these issues.
3. Flow: knowing the inputs and the outputs for the company and of the company is of
an utmost importance. This helps in achieving in the ability to see where the energy,
water and the gas consumption flows in and then one would be able to develop in the
targeted efforts and also track in the progress of the company internally.
4. Sources: the concept of renewable energy has been there for a long period. Each
company has to opt for these sources so that something is left in for the future
generations. There are many places like California that have successfully invested in
the energy initiatives in both the commercial as well as in the residential buildings
that goes on to include in the utility sources.
5. Efficiency: this means the tracking in of the equipment’s through the process of
monitoring in the consumption and the comparing in the same with the other
technologies that are available (The linde group, 2018).
Alternative performance measures:

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The measures of the performance could be grouped into two parts, the first being the ones
that relates in with the results which includes the outputs such as the competitiveness or the
financial performance and the second is the one that focuses on the determinants of the
results which includes in the inputs such as the quality, flexibility, utilisation of the resources
and innovation. This suggests in the measurement of the performance that could be built in in
and around the concepts of results and the things that determines them (CIMA global, 2018).
The following are the measures of performance:
 Money which is usually measured as profit
 Output and the input relationships or the productivity
 The emphasis of the customers on the quality of the products
 Innovation and adaptation to change
 Human resources (Repsol, 2018).
Inside the area of operations and the standard of the individual performances, quality
measures, etc could be used for the purposes of measurement of the performance system.
There are some of the specific measures that could include in the following:
 The cost of the quality which is measured as the budgeted verses the actual
 Variances which are measured as the standard costs verses the actual costs that have
been incurred
 Period expenses which are measured as the budgeted versus the actual amounts of the
expenses.
 Safety which is measured in on some common scale. The number of hours in order to
illustrate.
 The contribution of profit which is measured in dollars on some common scale

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 The inventory turnover which is measured again as the actual versus the budgeted
turnover (EY, 2018).
Wisner and Fawcett provides in a 9 step process for the purposes of developing the system of
performance measurement:
1. Defining in the mission statement of the company
2. Identification of the strategic objectives of the company which uses in the mission
statement
3. Development of the understanding of each one of the functional role when it comes to
achieving in the various strategic objectives.
4. Development of the performance measures for each one of the functional area which
would help in the measurement of the overall competitive position of the firm to the
top most management.
5. Communication of the objectives which are to be achieved to the lower level of the
management. Establishment of the specific set of performances at each level.
6. Assurance of the compatibility of the different measures of the performance which is
used in majority of the functional areas.
7. The use of the system of the performance measurement for the purposes of identifying
in the competition, locate the issue and the problem and assist the company in the
updating of the various objectives pertaining to the strategies and also undertake the
tactical decisions for the purposes of achieving in the objectives and also supply in the
relevant feedback after all of the decisions have been implemented.
8. Re-evaluation of the appropriateness of the various performance measurement system
in the view of the current competitive environment.

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It is of an utmost importance that the company under review assesses the systems for the
purposes of measuring in the performance which is used by the managers and the system is
regularly reviewed and revised as per the changing environment and the economy (Reference
for business, 2018).
Steps to encourage the staff:
The following are the steps that could be undertaken:
 The goals and the values of the employees must be aligned in with that of the
company.
 The long term purpose of the company must be defined in. the employees must be
made to feel in between their work duties and their personal values so that there could
be adherence towards the long term interests of the company.
 The importance of sustainability must be adhered to.
 There must be a creation of the knowledge of knowledge and competence. The term
sustainability cuts across all of the different aspects of the company and this ranges
from the consumption of the energy to procurement. It is very much important for the
company to invest money for the purposes of educating in the employees so that they
know about the sustainability. This helps in the creation of the system and the
processes that makes it very easy for the employees to integrate in the sustainability
into the decisions that are to be made in by the company. There are many ways such
as requiring in some specialised knowledge and expertise that would help the
employees in learning about sustainability.
 Each and every employee must be made a sustainability champion that would flow in
from a strong leadership only (Cultivating capital, 2018).

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 Co-creation of the sustainable practise with the employees. There is an important way
of embedding in the sustainability within the company and this would be done by
engaging in the employees for the co-creation of the sustainable practise. The
employees must act on their initiatives. The executives of the company could start
from making a very clear choice of funding in the projects of sustainability and get
them applied in by the way of development of good ideas.
 A healthy competition must be encouraged as between the employees. This serves as
an effective way for any company to set in new goals and also create in a culture of a
healthy competition amongst the employees. The sense of competition stimulates
creativity and all of the skills helps in the competition. This leads to the employees
pushing in the boundaries.
 There must be a higher purposes of creating in the change of transformation. The
external management serves the main role of transitions the business into a
sustainable business which in turn helps in the building up of the credibility and
legitimacy along with pride and identification amongst the employees (SSIR, 2018).

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References:
Alternative Performance Measures | Repsol. (2018). Retrieved from
https://www.repsol.com/en/shareholders-and-investors/financial-information/alternative-
performance-measures/index.cshtml
Engaging Employees to Create a Sustainable Business (SSIR). (2018). Retrieved from
https://ssir.org/articles/entry/engaging_employees_to_create_a_sustainable_business
Measuring sustainability. (2018). Retrieved from
https://www.the-linde-group.com/en/corporate_responsibility/measuring_sustainability/
index.html
Miranda, C. (2018). 8 Great Ways to Increase Employee Engagement in Sustainability.
Retrieved from https://www.cultivatingcapital.com/ways-increase-employee-
engagement-sustainability/
Performance Measurement - strategy, organization, levels, system, company, business,
competitiveness, system. (2018). Retrieved from
https://www.referenceforbusiness.com/management/Or-Pr/Performance-
Measurement.html
Performance Measurement Topic Gateway Series No. 9. (2018). Retrieved from
http://www.cimaglobal.com/Documents/ImportedDocuments/9_Performance_Measurem
ent.pdf
Reporting on alternative performance measures. (2018). Retrieved from
https://www.ey.com/gl/en/issues/governance-and-reporting/center-for-board-matters/ey-
reporting-on-alternative-performance-measures

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Stubbs, W. (2013).
https://www.researchgate.net/publication/263145763_Why_Do_Companies_Not_Produc
e_Sustainability_Reports. Retrieved from
https://www.researchgate.net/publication/263145763_Why_Do_Companies_Not_Produc
e_Sustainability_Reports
Sustainability Reporting. (2018). Retrieved from
https://www.globalreporting.org/information/sustainability-reporting/Pages/default.aspx