Sustainability Accounting: Importance, Strategy, And Implementation Essay.

The Importance of Sustainability Accounting in Business Operations

 There are five cases which our tutor gave us for reading, they all have successfully implemented sustainability accounting.

Every company now concern about their sustainability in the market. For sustainable business outcome companies should implement better techniques into their business operations so that the business can be run steadily and can keep a sustain development. For successful running of a company, the company should look at their financial aspects as well as the nonfinancial aspects (Ashby, 2009). The sustainability account consists of the non-financial aspects of the company such as the environmental, social and the corporate governance issues. The core reason for deploying sustainability accounting department in a firm is to evaluate the social, environmental, aspects of the company as well as control the activities of the company by an account, which consist of several non-financial assets liked with sustainability such as human, social and environmental. The sustainability account should consist of the business governance concern, which the company depend on for their long duration sustainability, and building values. The company should run with sustainable business practice. The company must set up a framework all around the sustainability strategy initiated by the company. There should be able management stuff, which can generate sustainability reports time to time. The report must contain the overall performance aligned to the sustainability target beside this the changes of the rules and regulation, changes of the company’s policies, which enhanced the risk as well as provides better opportunities (Beer, Au & Hall, n.d.). There must be constant reports on performances, which are aligned to the primary sustainability strategy, up-and-coming issues those are connected with the reputation of the company and subsequent impact on the brand of the company. For running a sustainable organization, first of all the peoples around as well as the society must sustain and for sustaining a sound society the nature must sustain. So therefore, the company must ensure that the natural environment should not be imbalance by the operations of the company. The company must use the natural resources sensitively. There should be waste management so that the company control excessive wastages of resources as well as control on the pollutions occurs during operations of the company (Coleman, 2012). The primary drivers for running the sustainability strategy are the management staff. The able administrative staffs ensure that the sustainability strategy of the company is implementing on the time limit and in a manner, which is cost effective. For this there should a core committee consist of the managers, who are responsible for the approval of the business cases and there must be surveillances on the consecutive developments. The company should ensure that every level of the operations maintains the sustainability strategy so that company must employed able intermediate managers who will be responsible for the sustainability strategy in their respective department. The middle manager will co-ordinate with the worker and the upper level managers. In addition to that, they also ensure that, the logistic operations of the company as well as the retail business of the company proceed in following sustainability strategy so that the company will progress sustainably. They also contribute with the ideas across several departments and ensure smooth progress of the eco ambassador schedule(Gray, n.d.).

Key Strategies for Sustainable Business Practice

The basic purpose of incorporating sustainable account in a business house is to examine the social, environmental and control the activities of a company through the account of the company’s several non- financial assets. The account is linked with the sustainability factors such as human, social, environmental, and corporate control issues on which the company depend for sustaining long duration of period and for creating values. At the end of the discussion, the aim of sustainability accounting is to update progress of an integrated business strategy for company management and measures sustainability threat and opportunities inbuilt to investment judgments (Hitchcock & Willard, 2009). Sustainability accounting is planned to synchronize the financial accounting in a way that financial data and sustainability information could be examined at the same time and so that produce a overall view of the company’s performance and worth creation, for equally financial as well as non-financial and from corner to corner all varieties of capitals. However, financial accounting is mostly related with the financial assets, capital flows, budgeting, scrutinizing and reporting. There are significant relation between the financial accounting and sustainability account, financial accounting deal with some aspects of non-financial as well as sustainability accounting performance. Sustainability accounting is completely dependent on the current financial accounting structure. The main aim and objective of the sustainability accounting and the relevant revelation facilitate to assess and determine the present environmental, social, legal performance of the company (McNall, Hershauer & Basile, 2011). The capitals, which consists of the tangible assets such as financial assets, physical resources or natural resources and some intangible resources like manpower and social capital. And the liabilities of a company consist of financial liability and operational cost that is connected to social or environmental assets. The evaluation of the performance of sustainability account cannot be done properly as there is constraint of techniques by which the assessment can be processed properly. The environmental as well as social assets could be abstractly implicit and accounted meant for the assets and liabilities they could not be adequately or accurately valued (Pachauri, n.d.). Therefore the approach of SASB for sustainability accounting composed of metrics and indicators for equally quantitative as well as qualitative, which articulate a reasonable illustration on the sustainability accounting elements thus guarantee that sensible investor could access to the complete mix of information in their decision building process. The metrics and indicators help to evaluate the assets as well as the liabilities of the sustainability accounting. The core functions of these metrics and indicators are to carry out attention of the management about the critical capitals, susceptibility to reduction or misuse of these assets. Situational planning concerning alternative assets, threat associated with unprofessional conduct of assured social or environmental issues and prospects connected with the industrial or global sustainability challenges. Over the period SASB consider that accounting designed for sustainability performance will provide the sensible investor superior access to the overall mix of information whether through permitting markets superior price certain economic factors or consequences of production externalities or through sufficiently taking into consideration other variations of assets l and their effects of economical valuation (Parvin, 2012). The sustainability accounting practice help to enhance communications between the employees, therefore it is cost efficient communication component.

Non-Financial Aspects and Environmental and Social Issues

For sustainability of a company the basic attribute are, commitment for long duration, leadership qualities, monetary as well as time investment, executive business plan, effective team of management and effective team work. There are four pillars for economical sustainability, proper planning of strategy and financial, diversification of income, striking administration along with finance team, own income creation.    

The core elements of the sustainability account are environment, social capital or dependencies, human resources, business models and innovation of new techniques and leadership and their governance (Unerman, Bebbington & O'Dwyer, 2007). The basic elements of sustainability account are tangible assets such as the social status of the company, the reputation of the company, the brand image, customer relation, the customers’ loyalty and the environmental and legal issues related with their business. The success of a company depends a lot, on these basic factors. So there the companies provide huge attention to their sustainability account, several companies employed a distinct division for their sustainability account. The experts and experienced people are recruited for evaluating their sustainability account. The training and development programs are organized for the employees in a constant way so that the employees understand in a better way to nourish these sustainability factors.

This element consist the impact of the company on the environment, either by the utilization of non-renewable natural capitals as the ingredients of the productions such as water, minerals, eco-system and biodiversity or by the environmental externalities or other harmful emission to the environment which leads to air, water, land pollutions by disposal of wastages and green house gas emission (Wang, 2005).

This factor connects the company with the society, the contribution of the company in the society. The company fulfil the needs the people with their basic business principle. The relationship management of the company ensure their goal to attain their visions. This element consist of the other stake holder such the customers, communities, the government the public etc. it consist issues of accessing their products or services, responsible industrial exercise in marketing and managing consumers privacy and affordability of their products and services.

The human capital or resources are one of the core factors of the companies’ sustainability. The employees play a huge role for sustaining the company. An able and responsible employee provides a lot to the company by the services, the employee cater for the company (Parvin, 2012). So therefore, the company must encourage their staffs to provide quality service with the greater value of their job as well as value their personal essentialities. The company should provide better remuneration to their employees compare to their competitors so that the employees inspired to serve better. There should be proper training and development program for the employee, which help the employees to cater better service. Company should acknowledge the health and safety of the employees so that the employees provide their services fearlessly. The company should nourish the talents properly, there should be skill enhance program, the employee should properly educated about company’s visions and missions. The companies should develop the safety as well as security culture and there should be proper training of the safety culture for the employees.

Key Elements for Implementing a Framework for Sustainability Strategy

The business models, which followed by the company has greater significant. The impact of the respective model on the surrounding environment as well as on society matters a lot. The effects of newer inventions on the environment as well as the society are also major factors. It deals with the amalgamation of environment and social factors in the worth creation procedure of the company, including source efficiency and other innovation of the production process as well as product invention and efficiency and responsibility of the design (McNall, Hershauer & Basile, 2011).

The effective leadership quality contributes a lot the company. A company can develop steadily by the able leaders. An able leader can demonstrate the company’s mission and visions perfectly to the employees as well as to the society to the stakeholders of the company such as consumers of the company, the communities who provide lot of impact to the company, and the Government. The leadership qualities of the top management groups of a company has potential liabilities towards the company, the future of the company much depended on the abilities of their leaders. The leaders should adequate knowledge about the business of the company, the good as well as the bad impacts of the company in society, about the strength and limitation of the company. They have to be able motivator so that they can motivate their staffs to deliver their best. The leader should nourish all the human qualities, which help them to work effectively. They should have knowledge of the security and safety needs of the company (Coleman, 2012). They should well aware of the rules and regulations of the company so that they can narrate it properly to the employees, and compel them to obey the rule strictly. They are responsible for the overall performance of the company. They are responsible for developing the company’s policies, the strategies of the company, for implementing newer more effective techniques, so that plays a very significant role in the growth of the company as well as they are responsible decline in the growth of the company.

There should be sufficient learning and training program for the employees so that the employees will get better knowledge of the sustainable factors. Everybody wants to sustain in his or her position as well as wish for betterments. It is applied on normal human beings as well as on the small or big companies. Everybody wants sustainable growth. So therefore, first of all the company should educate their employees. The employees should know the basic rules and regulations of the company. They should aware of the safety and security rules of the company as well as they should know the safety and security functions properly. They must have sufficient knowledge of the resources, their proper use and reduce the wastages (Beer, Au & Hall, n.d.). They must well accomplish with the brand image of the company and must carry out the brand image properly. They should have adequate training of customer management so that they can keep better relation with the valuable customers of the company on behalf of the company.

Waste Management and Logistics Operations for Sustainable Growth

Conclusions and Recommendation:

Sustainability accounting is entirely dependent on the present financial accounting frameworks. The primary aim and objective of the sustainability accounting and their respective disclosure help the user to evaluate and determine the present environmental, legal and social performance of the organization (Coleman, 2012). The purpose of sustainability accounting and disclosure is to determine and evaluate the overall environment, social and political governance performance of the firm with the help of the account of their management of several different forms which consist of the non financial capital related with the sustainability. The aim and goal of the sustainability of the accounting and overall disclosures is to inform the overall development of a key integrated business strategy for company management and thus examine the sustainability issues and risk and the key opportunities which are inherent to the overall decision related to the investment (Ashby, 2009).

Sustainability accounting act as an catalyst which enhance the financial accounting framework of the company for instances financial information and sustainability information which can be analysed and evaluated and thus provide a clear and precise idea about the company performance and value creation both financial and non financial aspects.

The concept of the sustainability is defined as one of the development which helps to fulfil the requirement of the current without hampering the future generation to meet their particular need. The report helps to provide a clear and precise idea about the change in the management which eventually help to determine and identify the different key stages of development with regards to the sustainability accounting activities. The concept of the sustainability accounting is considered to be one of the most innovative approached which help to provide a proper idea on the change in the firm and accounting practise. The research study thus help to provide a clear and precise idea on the overall contributing and overall facilitation of the adoption of the sustainability accounting practise with the help of proper identification which required to pay attention to the key issues and challenges for example involvement of the senior management, communicating the key activities with staff and the employees and overall securing the key resources. The sustainability account is becoming more significant as the traditional financial accounting. Currently the economical evaluation of a company is performed by keeping side by side all the information of financial accounting as well as the information of sustainability account. The aspects of the sustainability account are equally significant as the financial accounting. It contributes a lot to the growth of a company. The company run properly with the help of these aspects of the sustainability account. The environment and social factors are the core factors of financial accounting. The sustainability account includes the non-financial aspects of the company such as the environmental, social and the corporate governance issues. . The sustainability account includes the non-financial aspects of the company such as the environmental, social and the corporate governance issues. The sustainability accounting is necessary be introduced in a business organization, it has greater significance and can play very important role in the growth of accompany. The sustainability account division look after the sustainable practice of the organisations. Several non-financial factors possess vital role in the growth of the company. If the ignore these aspects, company has to face several problem, which could be constraints for the development of the company. By incorporating sustainability, accounting company can avoid such constraints. This accounting method also helps the company to accomplish its financial goal by reducing recurring cost as well as help to increase company’s overall turnover so that company accomplished better profit ratio. The existing accounting procedures of a company also adopt sustainability accounting into their system. Those can be easily linked with their accounting process and provide equal benefits.                                  

References

Ashby, C. (2009). District of Columbia public schools. [Washington, D.C.]: U.S. Govt. Accountability Office.

Beer, M., Au, S., & Hall, J. Vulnerability, uncertainty, and risk.

Coleman, M. (2012). The sustainability generation. New York: SelectBooks, Inc.

Gray, R. Accountability, social responsibility, and sustainability.

Hitchcock, D., & Willard, M. (2009). The business guide to sustainability. London, England: Earthscan.

McNall, S., Hershauer, J., & Basile, G. (2011). The business of sustainability. Santa Barbara, Calif.: Praeger.

Pachauri, A. Multi-stakeholder partnerships under the Rajasthan education initiative.

Parvin, J. (2012). Transformational leaders wanted.

Unerman, J., Bebbington, J., & O'Dwyer, B. (2007). Sustainability accounting and accountability. London: Routledge.

Wang, L. (2005). A methodology of sustainability accountability and management for industrial enterprises.

Wang, L. (2005). A methodology of sustainability accountability and management for industrial enterprises.