Going beyond the bottom-line
K.P. SHASHIDHARAN
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K.P. SHASHIDHARAN The International Federation of Accounts (IFAC) has recommended to G-20 countries to consider at its meeting scheduled in November in Cannes, France, for developing a globally-acceptable integrated reporting framework for financial and non-financial information by all sectors.
In the period of global warming and climate change, sustainability business models necessarily should go beyond the Bottom Line to embrace the Triple Bottom Line (TBL). This concept of balancing environmental protection, economic growth and social equity was first emphasised in Brundtland in his Commission Report of 1987, and later popularised by the author of `Cannibals With Forks'-fame, John Elkington, focussing on the 3 Ps — constituted by people, planet and profitability. The zeitgeist of TBL believes in corporate social responsibility (CSR), based on measuring and controlling the social and environmental impact of business process and production.
GRI AND SUSTAINABILITY TREE
EcoSTEPS developed a `Sustainable Tree' for Ecologically Sustainable Development (ESD), embedding concerns for the people, planet along with profitability, while incorporating ingredients from the UN Agenda 21, Earth Charter, Environmental Management System, Ecological Footprint, Life Cycle Analysis, Natural Capitalism, supporting availability of resources to the future generations. Roots of the tree are formed by sustainability principles and values; carrying approaches, tools and reporting frameworks are the branches; and at the top of the tree, are process, products and people. The United Nations Environment Programme Finance Initiative (UNEP FI) is a global partnership of UNEP and the financial sector, helping to identify the roles of the financial sector in integrating both the risks and opportunities for climate change. The Global Reporting Initiative (GRI) is a TBL reporting framework launched in 1997, jointly by UNEP and CERES and the third generation GRI 3.1 is currently available, while the fourth generation framework is under preparation.
Recently, GRI has released a research paper titled `Ecosystem Services' (ES) to capture the benefits derived from the ecosystems, regarding how the organisations can factor ES into their long-term business strategic decision-making. Reporting indicators capture the quantum of natural resources harvested, produced, traded and consumed, volume of water consumed, economic cost of organisation on climate-related disasters and volume of environmentally-sustainable inputs used in the business.
New standards
The Greenhouse Gas (GHG) Protocol has recently launched two new standards to enable the organisations to measure, manage and report their GHG emissions. The first one, The Corporate Value Chain Standard, helps the entities to integrate sustainability in its decision-making, and production and trading activities. The second standard, `Product Life Cycle Standard', facilitates companies in assessment of measurement of GHG emissions. In September 2011, GRI had issued `The Construction and Real Estate Sector Supplement', providing guidance for eco-friendly green construction.
While globally, International Financial Reporting Standards is being adopted as an acceptable accounting framework, it is time for moving towards an integrated uniform reporting format, for accounting for sustainable development, going beyond the bottom-line, providing a viable, 21st century business solutions for a sustainable economy.
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There is need for a uniform reporting format in accounting for sustainable development — balancing environment protection, economic growth and social equity.
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(This article was published in the Business Line print edition dated October 31, 2011)
K.P. SHASHIDHARAN
Share · print · T+
K.P. SHASHIDHARAN The International Federation of Accounts (IFAC) has recommended to G-20 countries to consider at its meeting scheduled in November in Cannes, France, for developing a globally-acceptable integrated reporting framework for financial and non-financial information by all sectors.
In the period of global warming and climate change, sustainability business models necessarily should go beyond the Bottom Line to embrace the Triple Bottom Line (TBL). This concept of balancing environmental protection, economic growth and social equity was first emphasised in Brundtland in his Commission Report of 1987, and later popularised by the author of `Cannibals With Forks'-fame, John Elkington, focussing on the 3 Ps — constituted by people, planet and profitability. The zeitgeist of TBL believes in corporate social responsibility (CSR), based on measuring and controlling the social and environmental impact of business process and production.
GRI AND SUSTAINABILITY TREE
EcoSTEPS developed a `Sustainable Tree' for Ecologically Sustainable Development (ESD), embedding concerns for the people, planet along with profitability, while incorporating ingredients from the UN Agenda 21, Earth Charter, Environmental Management System, Ecological Footprint, Life Cycle Analysis, Natural Capitalism, supporting availability of resources to the future generations. Roots of the tree are formed by sustainability principles and values; carrying approaches, tools and reporting frameworks are the branches; and at the top of the tree, are process, products and people. The United Nations Environment Programme Finance Initiative (UNEP FI) is a global partnership of UNEP and the financial sector, helping to identify the roles of the financial sector in integrating both the risks and opportunities for climate change. The Global Reporting Initiative (GRI) is a TBL reporting framework launched in 1997, jointly by UNEP and CERES and the third generation GRI 3.1 is currently available, while the fourth generation framework is under preparation.
Recently, GRI has released a research paper titled `Ecosystem Services' (ES) to capture the benefits derived from the ecosystems, regarding how the organisations can factor ES into their long-term business strategic decision-making. Reporting indicators capture the quantum of natural resources harvested, produced, traded and consumed, volume of water consumed, economic cost of organisation on climate-related disasters and volume of environmentally-sustainable inputs used in the business.
New standards
The Greenhouse Gas (GHG) Protocol has recently launched two new standards to enable the organisations to measure, manage and report their GHG emissions. The first one, The Corporate Value Chain Standard, helps the entities to integrate sustainability in its decision-making, and production and trading activities. The second standard, `Product Life Cycle Standard', facilitates companies in assessment of measurement of GHG emissions. In September 2011, GRI had issued `The Construction and Real Estate Sector Supplement', providing guidance for eco-friendly green construction.
While globally, International Financial Reporting Standards is being adopted as an acceptable accounting framework, it is time for moving towards an integrated uniform reporting format, for accounting for sustainable development, going beyond the bottom-line, providing a viable, 21st century business solutions for a sustainable economy.
----------------------------------------------------------
There is need for a uniform reporting format in accounting for sustainable development — balancing environment protection, economic growth and social equity.
----------------------------------------------------------
(This article was published in the Business Line print edition dated October 31, 2011)
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