Zabihollah Rezaee - Business Sustainability Factors of Performance, Risk, and Disclosure

Business Sustainability Factors of Performance, Risk, and Disclosure

Business Sustainability Factors of Performance, Risk, and Disclosure

Zabihollah Rezaee

Business Sustainability Factors of Performance, Risk, and Disclosure

Copyright Business Expert Press, LLC, 2021.

Cover design by Charlene Kronstedt

Interior design by Exeter Premedia Services Private Ltd., Chennai, India

All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any meanselectronic, mechanical, photocopy, recording, or any other except for brief quotations, not to exceed 400 words, without the prior permission of the publisher.

First published in 2021 by

Business Expert Press, LLC

222 East 46th Street, New York, NY 10017

www.businessexpertpress.com

ISBN-13: 978-1-63742-006-5 (paperback)

ISBN-13: 978-1-63742-007-2 (e-book)

Business Expert Press Business Law and Corporate Risk Management Collection

Collection ISSN: 2333-6722 (print)

Collection ISSN: 2333-6730 (electronic)

First edition: 2021

10 9 8 7 6 5 4 3 2 1

Description

Business sustainability is advancing from the greenwashing and branding to, very recently, business imperative as shareholders demand, regulators require, and companies report their sustainability performance. Sustainability has become economic and strategic imperative with potential to create opportunities and risks for businesses.

Business Sustainability Factors of Performance, Risk, and Disclosure examines sustainability factors of performance, risk and disclosure. The five dimensions of sustainability performance are economic, governance, social, ethical, and environmental (EGSEE). Sustainability risks are reputational, strategic, operational, compliance, and financial (RSOCF). Sustainability disclosures are relevant to financial economic sustainability performance (ESP) and non-financial environmental, social, and governance (ESG) sustainability performance with ethics are integrated into all other components of sustainability performance.

This book offers guidance for proper measurement, recognition, and reporting of all five EGSEE dimensions of sustainability performance. It also highlights how people, business, and resources collaborate in a business sustainability and accountability model in creating shared value for all stakeholders. The three sustainability factors of performance, risk and disclosure are driven from the stakeholder primacy concept with the mission of profit-with-purpose. Anyone who is involved with business sustainability and corporate governance, the financial reporting process, investment decisions, legal and financial advising, and audit functions will benefit from this book.

Keywords

business sustainability; financial economic sustainability performance; nonfinancial environmental, ethical, social, and governance sustainability performance; sustainability risk; sustainability disclosure; sustainability indexes; sustainability ratings; sustainability reporting; sustainability assurance; sustainability drivers; sustainability mandatory disclosures; sustainability voluntary disclosures; sustainability standard-setting organizations

Contents

Business sustainability has gained considerable attention of investors, regulators, standard-setters, business organization, academics, and the accounting profession in recent years. Business sustainability focuses on achieving financial economic sustainability performance to create shareholder value and desired financial returns for shareholders while securing social and environmental impacts. The primary purpose of business sustainability is to create shared value for all stakeholders from shareholders to employees, customers, suppliers, creditors, society, community, and the environment. This book examines three sustainability factors of performance, risk, and disclosure.

This book consists of four chapters covering all three sustainability factors with a keen focus on its implications for business organizations. Anyone who is involved with business sustainability and corporate governance, the financial reporting process, investment decisions, legal and financial advising, audit functions, and corporate governance education will be interested in this book. Specifically, corporations, their executives, the boards of directors, board committees, internal and external auditors, accountants, lawmakers, regulators, standard-setters, users of financial statements (investors, creditors, and pensioners), investor activists, business schools, and other professionals (attorneys, financial analysts, and bankers) will benefit from this book. This book offers guidance for proper measurement, recognition and reporting of all five economic, governance, social, ethical, and environmental (EGSEE) dimensions of sustainability performance. Sustainability performance and accountability reporting have gained a new interest in the aftermath of 20072009 Global Financial Crisis and the 2020 COVID-19 pandemic and resulted global economic meltdown, which has sparked widening concerns about whether big businesses are sustainable in the long term in contributing to the economic growth and prosperity of the nation. The ever-increasing erosion of public trust and investor confidence in the sustainability of large businesses, the widening concern about social responsibility and environmental matters, overconsumption of natural resources, the global government bailout of big businesses, and the perception that government cannot solve all problems of businesses underscore the importance of keen focus on sustainability performance, risk, and disclosure.

The primary theme of this book is on the examination of business sustainability performance, risk, disclosure reporting, and assurance and their integration into strategy, governance, risk assessment, cost management, performance management, and the reporting process of disclosing governance, ethical, social, environmental, and economic sustainable performance. This book also highlights how people, business, and resources collaborate in a business sustainability and accountability model. This book is intended to cover a variety of issues relevant to business sustainability and their implications for organizations of all types and sizes. I hope you find this book relevant and useful to gain and maintain your business and personal sustainability.

Zabihollah (Zabi) Rezaee
November 3, 2020

I acknowledge the Securities and Exchange Commission, the Public Company Accounting Oversight Board, the American Institute of Certified Public Accountants, the Big Four Accounting Firms and Corporate Governance Organizations, American Accounting Association, Global Reporting Initiative (GRI), International Integrated Reporting Council (IIRC), Sustainability Accounting Standards Board (SASB), United Nations, and other sustainability standards-setting organizations for permission to quote and reference their professional standards and other publications.

The encouragement and support of my colleagues at the University of Memphis are also acknowledged. Especially, my graduate assistant, Ms. Naomi Riley for providing invaluable assistance. I thank the members of the Business Expert Press team and Exeter Premedia for their hard work and dedication in editing the book, including, Scott Isenberg, John Wood, and Dhinesh Kumar.