The “sustainability train” has left the station and is headed towards a destination where responsibility is essential. The time has come for organizations of all types to get on board! The train is moving at high rates of speed, but it will not reach the final destination until, organizations have found a way to align social, environmental and economic activities with an effective means for communicating results.
Sustainability Frameworks
Sustainability scorecards and other indices are constantly being created, but it is hard for many industry professionals to effectively utilize these tools for accurately measuring progress. There may even be other factors that are absent from these sustainability charts which are of specific priority to an organization. So where do we start? Which set of guidelines do we follow? How do we begin to identify the low-hanging fruit, so as to begin reporting on what actions may already be in place and which aspects should receive the greatest attention?
There are a few groups dedicated to developing these standards. For instance, the Global Reporting Initiative (GRI), out of the Netherlands has become the most referred to in terms of sustainability reporting. Industry giants across the globe, like Disney, Qualcomm, and Hewlett-Packard have turned to GRI’s G3 Framework for a practical guideline that successfully organizes sustainability reporting. GRI has extensive resources available to large corporations and organizations of all sizes.
The value of communicating a comprehensive set of activities other than the traditional sense of financial reporting has become so important that countries, like Denmark, have recently passed a law requiring all companies to report based on the GRI framework. Sweden has similarly established new rules requiring all state-owned companies to use the framework.
Even though some can already be considered distinguished reporters since they are well into the third or fourth cycles, questions continue to arise as to how to appropriately interpret the framework and its supplements, how to cater to stakeholders or even what the value of sustainability reporting is.
In an effort to clarify boundless questions, GRI has established arrangements with entities, around the world to offer certified sustainability reporting courses, such as ISOS Group in the United States. Trainers not only build awareness of reporting challenges and benefits, but also instruct groups on the value of the materiality principle, the UN Global Compact and stakeholder engagement which is necessary for prioritizing issues and structuring report content.
The New Wave of Sustainability Applications
The value of reporting can be identified through a new wave of sustainability applications referred to as “Environmental and Sustainability Management Accounting (EMA).” To be more specific EMA is the identification, collection, estimation, analysis, internal reporting, use of materials and energy flow information, environmental cost information, and other cost information for both conventional and sustainable decision-making within an organization. With chapters on each continent, the Environmental and Sustainability Management Accounting Network (EMAN) is an international multi-stakeholder network determined to promote EMA tools and promote good entrepreneurial and social responsible practices. EMAN’s members are predominantly made up of environmentally conscious academics and professionals within the accounting and management fields. If they can give us any clue as to the direction in which the industry will go, we can expect a new breed of Accountants are expected to enter the scene. This new cadre of individuals will be trained to conduct true-cost accounting in order to minimize risks and enhance value-added activities that justify sustainability activities implemented by organizations.
In the words of sustainability accounting Guru, Stefan Schaltegger, “accounting is a driver of organizational behavior since it has the tendency to shape social realities, which in turn affects policy.” “Therefore, we need to start accounting for externalities and considering the performance of an organization in relation to its surrounding social and natural environment in order to expand value,” said Schaltegger.
Esteemed professionals around the world agree with Schaltegger’
Sustainable Entrepreneurship in America: Measuring & Reporting its Effects
The wheels have been put in motion and the navigational tools already exist. Organizations now have to decide on whether or not to jump on board before the train heading for the future of business leaves the misinformed behind.
Both Bainbridge and Schaltegger will be speaking in San Diego, California on February 18th and 19th, 2010 at the Environmental Management and Accounting Network (EMAN) Conference for “Sustainable Entrepreneurship in America: Measuring and Reporting its Effects.” As a practical application, ISOS Group will conduct a GRI Certified Sustainability Reporting Course following the conference on February 20th and 21st.
For more information, refer to www.eman-am.net or www.isosgroup.com
