ACCOUNTING & SUSTAINABILITY
What is the Relationship Between Sustainability and Accounting?
Accounting measures, summarizes, records, analyzes, assures, and reports sustainability information.
According to the American Institute of Certified Public Accountants (AICPA), “Accounting for sustainability involves linking sustainability initiatives to company strategy, evaluating risks and opportunities, and providing measurement, accounting, and performance management skills to ensure that sustainability is embedded into the day-to-day operations of the company.” Sustainability accounting involves two different responsibilities: sustainable reporting and sustainability assurance.
In response to stakeholder demands for greater transparency, sustainability reporting has emerged as a mechanism to report on the social and environmental bottom line in addition to the traditional economic bottom line. As this trend of publishing sustainability reports rises, the reports will need to be assured by accounting professionals in the same way that assurance services are offered for financial statements and reports.
Why Sustainability Needs Accounting
According to the Sustainability Accounting Standards Board (SASB), part of the Value Reporting Foundation, “In today’s world, companies face a unique set of challenges, from climate change and resource constraints to urbanization and technological innovation. Although financial statements provide valuable information about tangible assets and financial capital, increasingly investors are interested in how companies also manage sustainability issues that affect long-term value.”
The traditional business reporting model was developed in a time when our world looked much different. Today, globalization, resource scarcity, and a growing global population, along with greater scrutiny from customers, investors, and employees has driven the need for sustainability reporting. Businesses must now demonstrate they are not just financially profitable but socially responsible. Sustainability accounting ensures that such responsibility is based on credible, verifiable information.
ADVANCE YOUR KNOWLEDGE OF REAL ESTATE AND SUSTAINABILITY
Learn what sustainable accounting is all about and its importance
Learn the important things to know in this field
Learn how sustainability fits into your courses
Learn how sustainability relates to your career