VOLUNTARY SUSTAINABILITY DISCLOSURE (Accounting) - Essay Example

It may be argued that the above definition portrays a simplistic view of sustainability. Hence, one of the greatest difficulties encountered by corporations is to break down the sustainability phenomenon into objective goals. According to O’Dwyer’s definition of what he terms as managerial capture, corporations must define sustainability for themselves keeping in view their primary concern of shareholder wealth maximization (O’Dwyer, 2003). This has called into question the existence of the “social” aspect in “corporate social responsibility”.

Sustainability must not be viewed from organization’s perspective; rather, it should be viewed from the perspective of the holistic ecosystem. Owing to an increased focus towards sustainability in the corporate world, there have been expectations from accountants to adopt an influential role in using sustainability in a positive way to enable stakeholders achieve their goals. The environmental impact of the firm’s operations on its assets, liabilities, revenues and costs has been one way of incorporating sustainability into financial statements. . “Integrated reporting” has, therefore, evolved as a relatively new concept which reflects KPIs depicting the organization’s economic, social and environmental performance (Gould, 2011).

This, however, requires managerial co ordination and collaboration across all organizational levels and that the processes for gathering non-financial data are similar to those for financial reporting. Integrated reporting may not be possible even with a holistic reporting of social and environmental risks. Quantifying such non-financial information and developing appropriate KPIs for it is in itself may present a challenging task. Considering the trend towards sustainability reporting, various tools and techniques have been developed for accountants to incorporate this.

Accounting like its social sciences counterparts relates to socio-economic framework of the society. Traditional experiments in the field have focused on multi-column accounting, triple-entry record keeping and the more recent, narrative disclosures (Bebbington, Brown, & Frame, 2007). Some quantification of data has been made including the number of workers employed, emissions resulting from use of product, use of resources versus the amount of final product produced etc. Researchers have called on placing greater emphasis on stakeholders to provide for multi-layered accounts and address power differentials in the social and environmental reporting (Bebbington, Brown, & Frame, 2007).

Therefore, a transition is being made from the “monologic” accounting practices to “polyvocal citizenship” approach (Gray, Dey, Owen, Evans, & Zadek, 1997). Procedures such as SAMs (Sustainability Assessment Modeling Systems) have been adopted in the U.K whereby costs that were traditionally considered