Issues in Sustainability Accounting Reporting

Abstract

In the U.S., sustainability accounting reporting is developing and becoming more prevalent in public companies. This paper reviews accounting literature and Dow 30 companies' websites, presents a comprehensive view of the landscape of sustainability accounting reporting, and identifies seven issues of the reporting frameworks of sustainability accounting, i.e., (1) definitions, (2) measurements and disclosures, (3) motivations, (4) compliance, (5) enforcement, (6) standardization, and (7) the ultimate effect on reliability and comparability.An archival analysis approach is used to summarize and compare Dow 30 sustainability accounting reporting frameworks and information disclosed in 2015 annual reports and websites. The most popular framework is the Global Reporting Initiative (GRI) G4 Sustainability Reporting Guidelines. Some companies developed sustainability accounting reporting frameworks and others did not disclose any information regarding sustainability accounting reporting. Although the GRI framework is the most used, external assurance is present in only a few companies.

Emerging Trends in Sustainability Reporting (SR): Comparative Literature Review in Developed, Developing and GCC Countries

“…According to Dragomir (2011); Gray et al (2014); Montiel and Delgado-Ceballos, (2014); Munoz et al, (2017) SR practices have diverse users, including surrounding community, own employees, financial business partners, social organizations, other business partners or associates, government and other departments or institutions, and the consumers. The surrounding community entails the immediate local community where the organizations run their businesses or operations.…”

“…The TBL idea marked the footing for social reporting and accounting practices as later conceived by the International Institute of Sustainable Development (IISD) and the Global Reporting Initiate (GRI) guidelines on SR. By late 1990s, the emergence of GRI and the works on social responsibility and financial reporting work by CERES, would lead to the emergence of the term sustainability reporting (SR) and later adopted by organizations in representing social, environmental, and economic performance (Dragomir, 2011;Gray et al, 2014;Montiel & Delgado-Ceballos, 2014). Even though the procedure turned out to be distinguished, SR key scholars Gray et al (2014) and Munoz, Zhao and Yang (2017) believe the SR terminology is not relevant to sustainability, but rather the reporting is purely TBL reporting practice.…”

Sustainability Reporting and Firm Performance in Developing Climes: A Review of Literature

“…Most International companies do not see the need to report environmental and social issues if not for the pressure put on them by stakeholders (Hashmi, Damanhouri & Rana, 2015). The case of domestic companies is far worse as they do not see the need to disclose sustainability issues regardless of the pressure from stakeholders (Muñoz, Zhao & Yang, 2017). There seems to be no motivation for reporting mostly environmental and social issues.…”

Historical Perspectives and the Emergence of the Sustainability Concept in Organizations

“…Notable social reporting on aspects of sustainability was conducted in France and the Netherlands, and later in countries such as Switzerland; Germany and Austria would follow suit by using stand-alone non-financial reports as the basis for environmental reporting by listed or public entities (Hyršlová et al, 2015;Salzmann, Ionescu-Somers, & Steger, 2005). The idea of sustainability that would later be developed in 1975 was published as three-tier corporate social performance (CSP) model that focuses on social responsiveness, social responsibility, and social obligation (Munoz, Zhao, & Yang, 2017;Sethi, 1975). According to the CSP model, organizations should undertake social responsibility by bringing organizational/corporate practice to a level deemed harmonious with prevailing expectations regarding returns, and with social value and social norms, by way of social responsiveness in anticipation of social problems and change when developing business policies (Sethi, 1975).…”

“…The GRI was introduced for the purpose of creating rules and regulations that govern reporting on the social, economic, and environmental conduct of organizations. In 1999, a more inclusive model was developed by expanding on Sethi's (1975) three-tier model to include a fourth element by focusing on: 1) ethical responsibility, 2) philanthropic or discretional responsibility, 3) economic responsibility or profitability, and 4) legal responsibility (Carroll, 1999;Munoz et al, 2017). At the same time, Elkington (1999) invented a sustainability approach that used triple bottom line (TBL) elements that focus on disclosing the social, economic, and environmental impacts of a company.…”