2400 WORDS. 8 PAGES. DUE TOMORROW
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Note: The Assignment must be submitted online using the Final Assignment Dropbox.
The assignment will be returned to you via this dropbox.
Final Assignment – 25%
Description
You are the sustainability consultant of a firm or organization of your choice. Analyze
their report and compare it with a report of a competitor. Comment on their differences
and provide proposals for further developing your firm’s or organizations sustainability
reporting based on the background and tools that have been discussed in class.
Write a report for both sustainability reports using the following structure:
1. Cover page with name of student and student id, and sources of the reports
including the names of the firms/organizations
2. Connection to general sustainability issues and reporting of impacts for both
reports
3. Description of the accounting methods and tools applied by both reports
4. Assessment of the reliability, validity of the presented data and activities of both
reports
5. Assessment of the materiality of the reported data and activities for both the
company and stakeholders
6. Assessment of the general quality of the two reports
7. Description of the main differences between the two reports
8. Proposals for further improvements for the reporting of ‘your’ firm or organization.
DUE DATE:
April 5, 2022, 11:59 pm.
LENGTH:
8 – 12 pages, double spaced, 12 pt. size, cover page excluded
EXPECTATIONS:
o Meet the stated requirements of the assignment.
o The assignment is well written and well structured.
o The arguments are convincing and supported by reliable references including
those on the readings list.
HOW TO SUBMIT YOUR ASSIGNMENT:
Your assignment must be submitted online to the Final Assignment Dropbox. The
assignment will be returned to you via this dropbox. Dropboxes can be accessed by
clicking Assessments and then Dropbox on the course navigation bar above.
Your assignment must be submitted in one of the following file types:
o Microsoft Word (.doc or .docx)
o Rich Text Format (.rtf)
o Do not submit in pdf format
Please refer to the Submitting to a LEARN Dropbox page for general guidelines and
how to submit to a dropbox.
MARKING RUBRIC:
Excellent Very good Good
Cover page with name of student and student id,
and sources of the reports including the names of
the firms/organizations
1
Connection to general sustainability issues and
reporting of impacts for both reports
3 2 1
Description of the accounting methods and tools
applied by both reports
3 2 1
Assessment of the reliability, validity of the
presented data and activities of both reports
3 2 1
Assessment of the materiality of the reported data
and activities for both the company and
stakeholders
6 3 1
Assessment of the general quality of the two
reports
6 3 1
Description of the main differences between the
two reports
3 2 1
Proposals for further improvements for the
reporting of your firm or organization
3 2 1
Assignment well written and structured 2 1
30 points = 100%
Introduction to Corporate Sustainability
ENBUS 407
January 13th, 2022
What is corporate sustainability?
1
How to read your First CSR Report?
PRESENTATION TITLE
2
Content of the report
1.1 Mentions the SDGs? Only goals or specific targets?
1.2 Frameworks used: CDP, GRI, SASB, mentions their risk scenarios for TCFD
1.3 A greenwashing report or measurable KPIs? For example, we will reduce our CO2 emissions by 10% based on X emissions and the base year is 2018!
1.4 External Sustainability Assurance/Audit provided?
2) Governance
2.1 Who develops the sustainability agenda?
2.2 Can you evaluate the power dynamics between stakeholders? In essence, who has the upper hand (the companys shareholders or balanced with other stakeholders)?
2.3 How many rounds of sustainability? ONE annual meeting or a quarterly review?
3) Sustainability Measures
Economic, Social, and Environmental! Are they integrated?
3
If the report mentions TCFD, then
Global Reporting Standards
PRESENTATION TITLE
PAGE 5
Governance: who manages the sustainability agenda?
Power dynamics between Stakeholders
5
Materiality MAP Nestle
Are we including all stakeholder?
Do they have equal votes?
6
Select a corporate environmental or sustainability report of a firm you choose and present the results of your analyses in a 10 minutes presentation using the following structure
Name, industry and activities of the company
Basic financial data (linked to Sustainability Management)
Name(s), link(s), and format(s) of the report(s) (environmental, sustainability, integrated, pdf, website, etc.)
Content of the report(s)
Strengths and weaknesses of the company with respect to sustainability performance
Strengths and weaknesses of the report(s).
Present arguments
Why are general sustainability indicators useful for measuring corporate sustainability performance?
Why are general sustainability indicators not useful for measuring corporate sustainability performance?
Corporate sustainability reports address general sustainability indicators
Yes
No
Connecting sustainable development problems with firms performances
Firms as supporters or barriers for SD
Inside out relation
No:
Indicators are too general
Macro
Not material
9
What is corporate sustainability?
Check the internet
Business case
Outside-in
Shareholders and stakeholders
Risks and opportunities
Economic, environmental, social
However ..
10
General Sustainability: Consequences for Business
Companies should be aware of a broader set of perspectives about the importance and impact of business in society.
Two main perspectives
Inside-out: Sustainability case of business, addressing major sustainability concerns
Outside-in: Business case of sustainability
What are the two perspectives of sustainable development?
11
The Evolution of Corporate sustainability
Corporate Sustainability
Fuzzy Concept
Buzzword or life-changer?
From Eco-efficiency to Social Enterprise
Who defines the concept?
How can we assess and report corporate sustainability performance?
What is corporate sustainability? This about some keywords.
13
Sustainability can influence the share price
14
VW Emissions Scandal
and long-term
Seven Tips for Businesses to achieve CS
Collaborate with multiple stakeholders
Two heads are better than one (pre-competition)
Business case is not only about money
Quick fixes may impede sustainable solutions
Build unique partnerships
Address the entire product chain
Explore hidden advantages in the supply chain
Bansal, T. (2014, September 9). Seven ways that lead to corporate sustainability, The Globe and Mail.
17
Corporate Sustainability in Practice: Broad Spectrum
CS is fully integrated and embedded in every aspect of the organization, aimed at contributing to the quality and continuation of life of every being and entity, now and in the future. The motivation for CS is that sustainability is the only alternative since all beings and phenomena are mutually interdependent. Each person or organization therefore, has a universal responsibility towards all other beings
(Van Marrewijk, M., & Werre, M. (2003). Multiple Levels of Corporate Sustainability. Journal of Business Ethics, 44(2-3), 107-119. doi: 10.1023/a:1023383229086)
18
Triple-Bottom-Line as a CS model
Corporations should not just focus on the economic value they add, but also on the environmental and social value they add – and destroy.
Measuring and reporting corporate performance against economic, social and environmental parameters.
Capture the whole set of values, issues and processes that companies must address in order to minimize any harm resulting from their activities and to create economic, social and environmental value.
Taking into consideration the needs of all stakeholders
(Elkington, 1987)
Minimize harm, but Who is the best performer?
19
Corporate Sustainability: TBL
social, environmental and economic performance
sustainable development, sustainable environment, sustainable communities
impact on society, the environment, and economic sustainability
economic, environmental and social sustainability
economic prosperity, environmental quality, and social justice
economic growth, ecological balance and social progress
economic growth, social progress and environmental health
economy, environment, equity
profit, people, planet (or planet, people, profit)
landscapes, lifestyles and livelihoods
Vanclay, F. (2004). The Triple Bottom Line and Impact Assessment: How do TBL, EIA, SIA, SEA and EMS relate to each other? Journal of Environmental Assessment Policy & Management, 6(3), 265-288.
What does TBLI mean?
20
but
TBL is meant to be a way of thinking about corporate social responsibility, not a method of accounting.
(Elkington, 1997)
WBCSD* Definition of CS
Incorporating the costs of externalities, starting with carbon, ecosystem services and water
Doubling agricultural output without increasing the amount of land or water used
Halting deforestation and increasing yields from planted forests
Halving carbon emissions worldwide by 2050 through a shift to low-carbon energy systems
Improved demand-side energy efficiency, and providing universal access to low-carbon mobility
(*World Business Council for Sustainable Development)
Focus on sustainability case instead of business case. Change from TBLI
22
23
Corporate Eco-efficiency
doing more with less
term often associated with (World) Business Council for Sustainable Development
win-win
WBCSD founded 1992 at the Rio Summit
23
Eco-Efficiency Definition
Delivering competitively priced goods and services while progressively reducing ecological impacts (WBCSD)
How can ecological efficiency be communicated in a sustainability report?
Ratio of an output divided by an input
How can ecological efficiency be communicated in a sustainability report? Input comparted to output
24
Alternative Concepts of Corporate Sustainability
De-growth
Shared Value
Social entrepreneurship
25
De-Growth
Sustainable Development did not achieve its goals: efficiency is eaten up by growth
Goal: Decrease in material and energy consumption in countries that exceed their allowable ecological footprint
First de-growth and then steady-state economics
Historical background: France 1980s
26
Shared Value
Narrow view of business
Short-term financial performance without focusing on customer needs and ignoring broader influences on success.
Trade-off between economic efficiency and social progress
Creating economic value in a way that also creates value for society by addressing its needs and challenges.
(Porter & Kramer, 2011)
Clooney and Nespresso
27
Shared Value
Societal needs, not just conventional economic needs, define markets
Social harms or weaknesses frequently create internal costs for firms
Addressing societal issues may create innovation
Not a redistribution approach
(Porter & Kramer, 2011)
How to report? Is there still a divide between internal (management) and external (stakeholder) reporting
Change to integrated reporting
28
Accounting for and Reporting Shared Value
Social Return on Investment
Blended Return
Integrated Reporting
29
Example: Nespresso
At Nespresso, Nestlé worked to build clusters, which made its new procurement practices far more effective. It set out to build agricultural, technical, financial, and logistical firms and capabilities in each coffee region, to further support efficiency and high-quality local production.
Nestlé led efforts to increase access to essential agricultural inputs such as plant stock, fertilizers, and irrigation equipment; strengthen regional farmer co-ops by helping them finance shared wet-milling facilities for producing higher-quality beans; and support an extension program to advise all farmers on growing techniques.
It also worked in partnership with the Rainforest Alliance, a leading international NGO, to teach farmers more-sustainable practices that make production volumes more reliable. In the process, Nestlés productivity improved.
http://www.nestle-nespresso.com/ecolaboration/creating-shared-value
30
Strengths and Weaknesses of CSV
Strengths
Connecting business strategy and social goals
Systematizing of some previously underdeveloped, disconnected areas of research and practice
Weaknesses
Unoriginal
Ignores the tensions between economic and social goals
Naïve about business compliance
Based on a shallow conception of the corporations role in society.
Crane, A., Palazzo, G., Spence, L. J., & Matten, D. (2014). Contesting the Value of “Creating Shared Value”. California Management Review, 56(2), 130-153. doi: 10.1525/cmr.2014.56.2.130
Is it always possible to create shared value? Zero-sum games
Business compliance: Business are not even compliant (Sweatshop Bangladesh),
Shallow conception: model still centres on conventional way of corporation
31
Social Entrepreneurship
Social entrepreneurship is the process of pursuing innovative solutions to social problems.
Social entrepreneurs adopt a mission to create and sustain social value.
32
Goals
Entrepreneur
Serve markets that can afford the new product or service and create financial profit.
Social entrepreneur
Aims for value in the form of large-scale, transformational benefit that accrues either to a significant segment of society or to society at large.
33
Examples
Grameen Bank
Social Capital Partners
34
Conclusions
Corporate Sustainability is a very broad term
There are different concepts of corporate sustainability
New developments address de-growth instead of efficiency and focus on financial and social value at the same time
Newer concepts need new types of reporting
35
2005
Base Year
200620072008Goal
(2010)
VOC (lbs/$million sales)710590520540530TRI Releases (lbs/$million
sales) (US only, TRI
Releases based on year reported and sales based on year released)190170160140N/AEnergy (million
BTU/$million sales)
1,3301,1901,1201,0701,065Waste (includes offsite
recycling) (million
lbs/$million sales).031.030.027.025.02483P Projects1262*364 (in 2006
alone)
438 (in 2007
alone)
616 (in 2008
alone)
800**3P Savings$181,900,00
0*
$52,700,000 (in
2006 alone)
$91,400,000 (in
2007 alone)
$91,000,000 (in
2008 alone)
N/A3P Pollution Prevented
(tons)
516,000*35,000 (in 2006
alone)
56,600 (in 2007
alone)
61,000 (in 2008
alone)
N/A
The Emergence of Sustainability Accounting
January 20th, 2022
1
PG. 2
2
PG. 3
Solution
Start Here
Imagine the plot is divided into 4 quadrants and each number has the consecutive number mirrored in the opposite quadrant
For example: start here: 1 , 2, 3, 4
3
Why is Sustainability a Business Issue?
Costs of environmental and social impacts
Waste, climate change, relocation of communities, etc.
Stakeholder Pressure
Opportunities of sustainable development
Renewable energy technology, infrastructure, education, healthcare, new markets
Globalization
Sustainability as a competitive factor
Why has the importance of sustainability accounting in business grown? External pressure, internal pressure
4
Accounting
Accountable: Having the duty to explain how resources have been used
Resources
Financial
Employees
Inputs
.?
5
Accountability
The obligation of an individual or an organization to account for its activities
To accept responsibility for the results and to disclose them in a transparent way.
Includes the responsibility for money and other entrusted resources
Agree on the definition of accountability.
6
Fields of Accounting
Financial Accounting.
Cost Accounting.
Managerial Accounting.
Auditing
PG. 8
Sustainability accounting has a long history in academia and industry practices.
Reporting started in the 1920 mainly through financial reporting to produce the financial statement of corporations such as the balance sheet and profit and loss
8
1920s
1960s
1970s
Financial Reporting
Social reporting
2000s
Environmental Reporting
Integrated Reporting
PG. 9
Social Reporting
Working conditions
Access to health care
Occupational Health and Environmental safety
Social reporting started in the 1960s, namely in France when labour unions started employers to report on the working conditions of employees.
9
1920s
1960s
1970s
Financial Reporting
Social reporting
2000s
Environmental Reporting
Integrated Reporting
PG. 10
Environmental Reporting
Carbon emissions
Pollution and waste
Energy
In the 1970s and 1980, corporations started to report on their environmental performance to gain competitive advantage and also to be good citizens
10
1920s
1960s
1970s
Financial Reporting
Social reporting
2000s
Environmental Reporting
Integrated Reporting
Sustainability Accounting Systems
Transparency about an organizations activities
encouraged by external audits and verification
Stakeholder engagement
Voluntary and mandatory systems
Driven by
Regulators
NGOs
Market mechanisms
Internalization of external costs and benefits
11
Who is accountable?
Entities for which stakeholder interest exist
Traditional stakeholders
Shareholders
Lenders
Investors
Regulators
Financial accounting for a certain type of firms only
12
Who is Accountable and to whom?
Shareholders
Regulators,
Financiers
Society
Intermediaries (rating agencies)
13
Accountable to Stakeholders
Individuals or groups having an interest in a company because they
can affect or
can be affected
by a companys activities
Freeman, R. E. (1984). Strategic Management: A stakeholder approach. Englewood Cliffs, NJ: Prentice-Hall.
Why is the government interested in banks sustainability reporting?
14
Stakeholder theory explains
why organizations have to consider multiple interests to be a good sustainability performer
the need of new forms of stakeholder engagement in order to achieve better sustainability performance and sustainability accountability
the development of sustainability accounting systems
The stakeholder concept is relatively new. Therefore, we need new ways of corporate communication, such as sustainability reporting
15
Types of Stakeholders
External
Shareholders, NGOs, regulators, suppliers, clients, investors,
Internal
Employees, managers,
What does this imply for accounting and reporting?
Conflicts (Agency Dilemma): Many managers will avoid taking any risks!
What are external stakeholders that could be interested in accounting? What are internal stakeholders? Discuss with neighbor.
Response: Different stakeholders have different needs. Reporting and accounting have to address these needs.
Primary and Secondary..
16
Implication: Stakeholder Accounting
Accounting for impacts on stakeholders
Different impacts on different stakeholders
Civil Society members Vs. employees Vs. investors
Less detailed communication
Tension between PR and transparent accounting
17
Example for stakeholder oriented reporting: The Equator Principles for Project Finance
Voluntary code of conduct for project financiers
Social and environmental risk management framework
Conventional view
18
A stakeholder view on project finance
Project financier
Project
Environment
Affected communities
the principles
Review and categorization
Environmental and social assessment
Applicable environmental and social standard.
Environmental and social management system and action plan
Stakeholder engagement
Grievance mechanism
Independent review
Covenants
Independent monitoring
Reporting and transparency
Check the website for EP Reporting
http://www.equator-principles.com
What do they report about?
Does the reporting address stakeholders?
Who are the stakeholders?
Project risks, regions, implementation of principles
21
Sustainability Accounting
Activities, methods and systems
Recording, analysis and reporting
Outside-in relation: Sustainability induced financial impacts
Inside-Out relation: Sustainability impacts of a defined economic system, such as a firm
Schaltegger, S., & Burritt, R. L. (2000). Contemporary environmental accounting: issues, concepts and practice. Sheffield: Greenleaf Publishing.
22
SASB Definition of Sustainability Accounting
to evaluate the environmental, social and governance performance of companies
through an account of their management of various forms of non-financial capital associated with sustainability
environmental, human, social, governance
which they rely upon for sustained, long-term value creation.
Materiality
23
Accounting Systems and Stakeholders
Based on: Schaltegger, S., & Burritt, R. L. (2000). Contemporary environmental accounting: issues, concepts and practice. Sheffield: Greenleaf Publishing, p. 33
Management
Management
accounting
Internal sustainability
accounting
Employees
COMPANY
Financial accounting
Other
accounting systems
External sustainability accounting
Other sustainability accounting
General Public
Media
Creditors
Insurance companies
Suppliers
Shareholders
Tax agency
Communities
NGOs
Regulators
First internal accounting, both management accounting and sustainability accounting
Then external accounting: Financial accounting, other accounting, i.e. governance, material sourcing
Then external sustainability accounting. Other sustainability accounting for regulators.
24
Effects of Sustainability Accounting in Addition to Higher Transparency
Better employee morale, attraction and retention
Improved corporate reputation
Anticipation of future regulations
Anticipation of markets connected with sustainability
Supporting sustainable management practices
25
Different Interests in Accounting
Why are managers interested in sustainability accounting and what are they interested in?
Why are stakeholders interested in sustainability accounting and what are they interested in?
26
Management and Internal Sustainability Accounting
Wider field than Financial accounting
Long-term
Detailed
Facilitates
managerial decision-making
Internal accountability
Basis for external accounting
Why is internal reporting not used for stakeholder communication?
27
Other Drivers for Sustainability Accounting: Costs and Benefits
Until the 1980s environmental and societal impact not a cost or benefit driver
From 1980s: Polluter pays principle
Fines (Exxon, BP)
Higher costs of impacts and lower costs for information systems: marginal cost curves
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