Sustainability accounting integrates environmental and social considerations into core business strategy, focusing on long-term value creation through risk assessment, performance measurement, and operational alignment. The Association of International Certified Professional Accountants and the Chartered Institute of Management Accountants (AICPA & CIMA) stress that effective integration requires embedding relevant standards into business models, conducting stakeholder-informed materiality assessments, and establishing measurement and control systems to ensure ESG initiatives guide operational decisions. This area of accounting encompasses two primary responsibilities: sustainability reporting and sustainability assurance.

Sustainability reporting, in particular, has emerged as a critical mechanism for communicating a company’s social and environmental performance alongside its traditional economic results. With the growing rise in stakeholder demands for greater transparency, sustainability reporting publications are increasing, along with the need for assurance services by accounting professionals similar to those provided for financial statements to enhance the credibility and reliability of these disclosures.

The Sustainability Accounting Standards Board (SASB), part of the Value Reporting Foundation, highlights that today’s companies face unprecedented challenges, including climate change, resource limitations, rapid urbanization, and technological advancements. While traditional financial statements provide valuable insights about tangible assets and capital, investors increasingly demand transparency on how organizations manage sustainability risks and opportunities that influence long-term value creation.

The conventional business reporting model was designed for a very different era. In today’s interconnected world, characterized by globalization, resource scarcity, and a growing global population, along with increased scrutiny from customers, investors, and employees, the need for sustainability reporting has become urgent. Companies are now expected to demonstrate not only financial profitability but also social responsibility. Sustainability accounting provides the framework to ensure this responsibility is based on credible and verifiable data.