Topic 9
Sustainable business
(Introduction to Sustainability Reporting)
Key questions
• What is corporate social responsibility (CSR)?
• What are the components of the triple bottom line?
• What is sustainability reporting and why is it
important?
• What is the Global Reporting Initiative (GRI)?
• What is integrated reporting?
• What is life cycle analysis?
• What is intergenerational equity?
Corporate social responsibility
• Corporate social responsibility
(CSR) – an organisation’s
commitment to act in an ethical way
to contribute positively to society
and the environment.
• CSR incorporates the public interest
into business planning and decision
making.
The triple bottom line
ECONOMIC SOCIAL ENVIRONMENTAL
• cash flow statement • human resource management and • the amount of energy consumed
work health and safety
• type of energy consumed
• income statement • ratio of wages to cost-of-living
expenses • raw material usage
• balance sheet. • non-discrimination and Aboriginal
and Torres Strait Islander rights • greenhouse gas emissions
• community involvement initiatives • effluent and waste
• customer and stakeholder • land use and management of
satisfaction. ecosystems.
Sustainable development goals
United Nations – 17 SDGs
Sustainability reporting guidelines
• Sustainability reporting is reporting on
economic, environmental and social impacts.
• Sustainability reporting is largely voluntary,
but may be more credible if a business choses
to follow reporting guidelines or standards.
The Global Reporting Initiative (GRI)
• GRI is an independent
international organisation
developing voluntary
sustainability reporting
standards in consultation with
industry and other
stakeholders.
• The standards are modular
and designed to incorporate
all material TBL and CSR
principles into an
organisation’s reporting.
The Global Reporting Initiative
• The GRI framework is continually being updated.
• GRI works with a global multi-stakeholder network from over 60 countries.
• Stakeholders include business, society, academia, labour and other
professional institutions.
‘Sustainability reporting with the GRI Standards’ intro:
https://www.youtube.com/watch?v=6LkrhalWIMc&t=34s
Integrated reporting
• Integrated reporting is more
than combining a business’s
annual report and financial
statements with its
sustainability report.
• It takes an integrated
approach to managing ‘six
capitals’: financial,
manufactured, human,
intellectual, natural and
social).
Life cycle analysis
• Life cycle analysis assesses the potential and There are at least five stages in a product’s life
real environmental impacts during all stages cycle:
of a product’s life.
1.raw material extraction and processing
• Often referred to as ‘cradle to grave’, ‘womb 2.product design and manufacturing
to tomb’ or ‘cradle to cradle’ (to include
recycling or upcycling). 3.packaging and distribution
4.product use Closing
• The goal of life cycle analysis is to facilitate 5.end of product’s life.
the loop
the design of products and services to
minimise their environmental impacts.
Life cycle analysis
Life cycle analysis involves three stages:
1. An inventory of possible materials
and energy required for a product.
2. An assessment of potential and
actual environmental impacts.
3. A review of the product, to assess
and/or improve its sustainability
(these reviews are continuous to
ensure improvements).
Intergenerational equity
• It is the idea that development to meet
the needs of the present should not
compromise the ability of future
generations to meet their needs.
• A sustainable business is one that
ensures that all processes, products
and activities maintain a profit while
addressing current environmental
concerns.
• Equity between current and future
generations.
Sustainability as a business strategy
Sustainability strategy Characteristics of a sustainable business
a well-written business plan against which performance is monitored regularly
• Any sustainability strategy should be
strongly aligned to the business plan
and requires proactive business
management and a strategic a clear understanding of the key drivers of business operations or activities and
approach. monitoring them regularly (including risk management and contingency plans)
strong corporate governance and an ethical framework for setting standards around
the conduct of business activities
• Must be integrated into all
operations of business - from policy
and management through to on- a long-term investment in human capital and knowledge, including people, know-
ground activities such as how and the need for succession planning
purchasing, production and
distribution. an understanding that clients’ and customers’ requirements are the main drivers of
the business.
• Emphasis on efficiency, innovation established partnerships and networks for expansion, innovation and improvement
and waste reduction.
Role of Accountant
• Reporting – application of standards (proper disclosure).
• Accounting Information System design – incorporating social &
environmental information.
• Audit and Assurance on the reports issued.
• Cost Analysis – on projects involving environmental and social
aspects.
