Irene M. Herremans - Sustainability performance and reporting

Sustainability Performanceand Reporting

Sustainability Performanceand Reporting

Irene M. Herremans, PhD, CPA

Sustainability Performance and Reporting

Copyright Business Expert Press, LLC, 2020.

Cover image licensed by Ingram Image, StockPhotoSecrets.com

Cover and 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 anymeanselectronic, mechanical, photocopy, recording, or any otherexcept for brief quotations, not to exceed 400 words, without the priorpermission of the publisher.

First published in 2020 by

Business Expert Press, LLC

222 East 46th Street, New York, NY 10017

www.businessexpertpress.com

ISBN-13: 978-1-95152-720-4 (paperback)

ISBN-13: 978-1-95152-721-1 (e-book)

Business Expert Press Financial Accounting, Auditing, and TaxationCollection

Collection ISSN: 2151-2795 (print)

Collection ISSN: 2151-2817 (electronic)

First edition: 2020

10 9 8 7 6 5 4 3 2 1

Printed in the United States of America.

To all those who want to be proud of entrusting a pristine and diverseplanet to future generations for everyone to enjoy in a sustainable manner!

Sometimes it falls upon a generation to be great, you can be that greatgeneration.

Nelson Mandela

Abstract

As organizations tackle global challenges, the face of our businesses and our economic systems are changing to consider the interest of all stakeholders rather than just shareholders. This book provides a step-by-step approach for organizations to reap benefits from a more sustainable approach. It begins with a brief history of the development of the concept of sustainability as it applies to both performance and reporting. Implementing sustainability in an organization begins with the development of policies which are consistent with the expectations of its stakeholders. An organizations active participation in multi-stakeholder initiatives helps to align the policies with societal trends. Once the policies are developed, a management system is crucial to ensure congruence of policies with actual performance. Then, periodic reporting of performance based on well-recognized standards aids stakeholders to assess an organizations performance. It also helps stakeholders to determine if performance aligns with their expectations. Both internal and external assurances can aid in developing stakeholder trust in the organizations performance and reporting. Finally, the book concludes with a reflection on key messages and potential future actions for continuous improvement.

Keywords

sustainability performance; sustainability reporting; reporting standards; stakeholder engagement; management systems; credibility; indicators; assurance

Contents

My sincere thanks to the following people who generously supported my work on this book. Markus Selkirk helped in many diverse ways, too numerous to mention them all. In brief, Markus located excellent examples of sustainability performance and reporting for use in the book, took on research efforts to develop the time line, read initial drafts and provided insightful, detailed feedback to ensure each chapter was consistent with the identified objectives, and helped with seeking permissions. Mel Wilson and Jing Lu, both professionals in the area of sustainability, provided relevant and thoughtful comments to improve my drafts. Romaine McLeary helped with the formatting. Minh Nguyen created excellent graphics for the slide decks and figures for both the textbook and the instructors guide. Elizabeth Romo-Rabago provided support for permissions and supplemental materials that complement this book. Tinu Chineme and Jo Mark helped with the final editing. My gratitude also goes to the many organizations that willingly provided examples and illustrations to make this book come alive. I extend my heartfelt thanks to each of you and many others who supported the development of this book indirectly but are not specifically mentioned here.

In the words of the African Delegate from Johannesburg to Rio+10, sustainability means:

Enoughfor allforever.

Sustainability integrates the environmental and social dimensions within the economic dimension of an entitys operations to ensure sufficient resources and a good quality of life for present and future generations. To some, sustainability appears to be an enormous challenge that is too overwhelming and not worth the effort. In contrast, others are well on their way to making our world a better place for all. For example, 89 percent of business leaders say commitment to sustainability is translating to real impact in their industry (United Nations Global Compact-Accenture Strategy 2018, p. 11). In line with the sustainability concept, the influential Business Roundtable (BR) in the United States has redefined the role of a corporation as benefiting all stakeholders (Business Round Table 20.9), not just shareholders. This BR commitment was signed by 181 of the nations CEOs. These businesses believe that partnerships and other collaborative arrangements are essential to address the challenges that we face. The material in this book provides an approach for working together through commitment both to sustainability performance and reporting. Performance supports reporting and vice versa.

Stakeholders wishing to grasp an organizations performance or managers of any type of entity wishing to improve their performance and make their reporting more credible will find the material in this book relevant and useful. Reporting should be a natural extension of performance not only to inform internal and external stakeholders about an entitys sustainability journey but also to learn to improve performance. Reporting has evolved and is continuing to evolve from reports that were initially called green glossies in the early days to current day integrated reports. Integrated reporting combines conventional financial reporting with environmental and social reporting to demonstrate the organizations value added through maintenance of its capital assets (both tangible and intangible) in the short term, medium term, and long term.

This book begins in recaps where we have been and where we might be going. It reviews major concepts and speculates on the direction of sustainability performance and reporting for the future.

The book uses many examples and illustrations from leading-edge organizations to provide context to the material. It places the reader in the world of sustainability performance and reporting. Various learning aids are interspersed throughout the chapters to support the readers understanding of the points of view of organizations and their many diverse stakeholders. Some of these include the following:

Sustainability in Action: Examples from organizations actual experiences.

Reflections: Thoughtful questions or concepts that require critical thinking.

Key Takeaways: Reviews of major concepts in each chapter.

Glossary: List of terms and their definitions.