SHOULD ACCOUNTANTS BE RESPONSIBLE FOR REPORTINGON THE SUSTAINABILITY ACTIVITIES OF AN ORGANISATION? IntroductionAs a result of the global climatic changes, promotion of sustainable practices is seen as a necessary survival tactic. The issue of sustainability has grown out of a number of factors. First, many environmental dangers face the world in addition to there being a huge imbalance in wealth distribution across the world. As such, it is impossible to address environmental degradation without addressing the wealth imbalance in the world. This is known as sustainable development. Sustainability therefore entails a combination of financial, social and environmental strategies.
Since 1990s, many environmental incidents have forced many organizations to adopt sustainability in their reporting. In fact, there are numerous codes and legislations that deal with sustainability today. Sustainability reporting has been deemed important as organizations that take sustainability reporting seriously also tend to perform well financially. However, there has been increasing questions as to who should be responsible for sustainability reporting (Gillan, 2010). While some have argued that the accounting function of the organization should adopt sustainability reporting together with financial reporting, others have argued that doing so will overburden the accountants.
Furthermore, it has been argued that accountants may not have the required knowledge on sustainability matters and hence sustainability reporting should be left in the hands of sustainability experts. This paper seeks to establish whether accountants should be held responsible for reporting on the sustainability activities of an organization. In so doing, the paper will also examine areas of sustainability reporting where accountants can be of help. An overview of sustainability reportingSustainability reporting can broadly be defined as an environmental footprint measurement and reporting system for an organization whether profit or non profit making.
In other words, its reporting on an organization's activities geared towards sustainable development or development which meets the current needs of the organization without compromising the future generations' ability to meet their own needs. in other words it entails bearing in mind impact of an organization's economic activities on the natural and human resources on which the organization depends on. As such, it entails ensuring that the resources' productive capacity is not irreparably damaged or depleted at a faster rate than it is replenished.
As such, sustainability reporting is a useful tool in identifying, evaluating and managing social and environmental risks through identification of resource efficiency and cost savings and linking improvements in social and environmental issues to financial opportunities (Greg, 2004). as such, organizations committed to sustainability reporting look financial performance to returns that can accrue from many years of engaging in social and environmental friendly practices. As such, sustainability reporting can help organizations in-collecting information on social and environmental related expenses and hence link them to financial benefits-decreasing their social and environmental external costs over time as a result of commitment to sustainability-establishing environmental and social risks resulting from current financial performance and manage the riskThis shows how important sustainability reporting is to an organization.
However, due to the fact that it is a relatively new field, there exists confusion as to who should be held responsible for sustainability reporting with some accountants divorcing themselves from it while others have actually embraced it and their organizations have made great strides in the field. According to Gregory (2008), sustainability reporting is both an opportunity and a challenge to the accountant.
As such, accountants should realize that consumers, governments and societies are interested in sustainability reporting more than ever before which greatly increases their role of organizations are to meet these expectations. As such, they should strive to equip themselves with the skills that will help them in sustainability reporting rather than running away from it.