Triple bottom line (TBL) and sustainability reporting are terms that are linked, but may not necessarily be interchangeable.
To understand what sustainability reporting might include, it is appropriate to define 'sustainable development', which has a number of accepted definitions:
Development that meets the needs of the present without compromising the ability of future generations to meet their own needs' (Source: World Commission on Environment and Development, Our Common Future)
' means basing developmental and environmental policies on a comparison of costs and benefits and on careful economic analysis that will strengthen environmental protection and lead to rising and sustainable levels of welfare' (Source: World Bank, World Development Report 1992: Development and the Environment)
' an approach that will permit continuing improvements in the quality of life with a lower intensity of resource use, thereby leaving behind for future generations an undiminished or even enhanced stock of natural resources and other assets' (Source: World Bank, World Development Report 1992: Development and the Environment)
The challenge for accounting
The notion of sustainable development raises the contentious issue of whether measurement of outcome is the domain of larger economic and public policy, remote from the commercial activities of business organisations.
Conceptually, these definitions challenge the role of accounting in terms of its capacity to provide information that underpins both sustainable development initiatives and commercial activities which have a significant environmental impact. More broadly, there emerges a dramatically changed basis for accounting information to support stakeholder interests and relationships.
Influences for reporting
Perhaps the most significant international development influencing the emergence of sustainability reporting is the Global Reporting Initiative (GRI) based in the Netherlands. The GRI was established through the United Nations Environment Program with the objective of enhancing the quality, rigour and utility of sustainability reporting.
In its 2002 Reporting Guidelines, the GRI identified a series of trends adding momentum to the need to develop techniques that enhance an organisation's ability to more consistently and comprehensively report on the economic, environmental and social dimensions of its activities, products and services.
Among the more significant influences identified by the GRI are:
expanding globalisation
search for new forms of global governance
reform of corporate governance
global role of emerging economies
rising visibility of and expectations for organisations
measurement of progress toward sustainable development
governments' interest in sustainability reporting
financial markets' interest in sustainability reporting
emergence of next-generation accounting
CPA Australia's research into sustainability and TBL
As part of our sustainability and TBL strategy, CPA Australia is undertaking substantial research to examine 'responsible investment' portfolio performance, security market disclosure responses and corporate governance performance relationships. This study will be conducted in conjunction with the University of Sydney.
This page is available online at:
http://www.cpaaustralia.com.au/cps/rde/xchg/cpa/hs.xsl/14131_8141_ENA_HTML.htm
