Practical Implementation of Sustainability Accounting: A Research of Major Public Listed Companies
Keywords:
Sustainability, Sustainability Accounting, Triple Bottom Line, Social and Environmental ReportingAbstract
This research proposes the integration of social and environmental pillars into existing economic pillar towards modernizing mainstream financial accounting in line with 21st-century diverse stakeholders’ sustainability needs. The identified research gap observes that 19th-century accounting no longer reflects an all-encompassing stakeholders’ interest. Hence in this 2020 decade transforming the basis of accounting and reporting is a fundamental concern. This research thus provides an opportunity rarely considered for an all-inclusive sustainability accounting evoking a shift in accounting fundamentals, principles, standards and frameworks for stakeholders’ holistic decision-making on enterprises going concern. The methodological approach adopted is an in-depth examination of two selected public listed companies’ annual financial statements during the last three years to provide insights on their integration of social and environmental into financial statements . Both literature and this research findings reveal low degree of commitment towards social and environmental sustainability in favor of economic activities mandated for listed companies. This validates formerly, now updated New Framework for seamless standardized assimilation of all three pillars in financial accounting. The practical implications contained in this research recommends a Framework for transitioning into a more-inclusive 21st-century sustainability accounting. The practical value contributes in transformation in accounting fundamentals to reflect updated stakeholders’ motivation.
References
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Carroll, A. B. (2004). Managing Ethically with Global Stakeholders: Present and future challenge. Academy of Management Executive, 3, 114-119. Doi: https://www.jstor.org/stable/4166070
Collier, J., & Roberts, J. (2001). Ethic for corporate governance? Koers, Quarterly, 11(1), 67-71. Doi: https://www.jstor.org/stable/3857869
De los Reyes Jr., G., & Scholzb, M. (2019). The limits of business case for sustainability: Don’t count on ‘Creating Shared Value’ to extinguish corporate destruction. Journal of Cleaner Production, 221, 785-794. doi: https://doi.org/10.1016/j.jclepro.2019.02.187
Eisenhardt, K. (1989). Agency theory: an assessment and review. Academy of Management Review, 14, 57-74. Doi: https://www.jstor.org/stable/258191
Elkington, J (1998). Cannibals with forks: The triple bottom line of 21st century business. Oxford: Capstone Press, Oxford. ISBN 1-900961-27-X https://link.springer.com/content/pdf/10.1023/A:1006129603978.pdf
Freeman, R. E. (2004). Stakeholder approach revisited. Zfwu, 5(3), 228-41. Doi: https://www.ssoar.info/ssoar/handle/document/34707
Freeman, R. E., & Greenwood, M. (2020). Deepening Methods in Business Ethics. Journal of Business Ethics, 161(1), 1-3. doi: http://dx.doi.org/10.1007/s10551-019-04374-7
Friedman, A., & Miles, S. (2006). Stakeholders’ theory & practice. Oxford: University Press.
Gachie, W. (2009). Practical application of corporate governance principles in South Africa: case study of two retail companies, MBA Dissertation, University of KwaZulu-Natal, South Africa Durban. Doi: http://hdl.handle.net/20.500.11892/78985
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Gachie, W. (2019). Project sustainability management: risks, problems and perspective. Journal of Problems and Perspectives in Management, 17(1)313-325. Doi: http://dx.doi.org/10.21511/ppm.17(1).2019.27
Hallstedt, S. (2017). Sustainability criteria and sustainability compliance index for decision support in product development. Journal of Cleaner Production, 140, 251-266. Doi: https://doi.org/10.1016/j.jclepro.2015.06.068
Hinke, J., Gezo, M., Smutka, L., & Strielkowski, W. (2020). Management of financial statements auditing in the Visegrad Group countries. Problems and Perspectives in Management, 18(1), 1-16. doi: http://orcid.org/0000-0001-5385-1333
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Kocmanová, A., & Docˇekalová, M. (2013). Construction of the economic indicators of performance in relation to environmental, social and corporate governance (ESG) factors. Acta Universitatis Silviculturae Mendelianae Brunensis, 60(4), 195–206. doi: https://pdfs.semanticscholar.org/f9ed/e602713c1ced19b0fdaf50454e3e2a88628b.pdf
Lal, P.M. & Keen, M. (2002). Economic considerations in community based resource use and management.Development Bulletin. 58, 68-72 Doi: http://hdl.handle.net/1885/71770
Manning, B., Braam, G., & Reimsbach, R. (2019). Corporate governance and sustainable business conduct—Effects of board monitoring effectiveness and stakeholder engagement on corporate sustainability performance and disclosure choices. Corporate Social Responsibility and Environment Management, 26(2), 351-366. doi: https://doi.org/10.1002/csr.1687
Masocha, R. (2019). Social Sustainability Practices on Small Businesses in Developing Economies: A Case of South Africa. Sustainability, 11(12), 32-57. doi: https://doi.org/10.3390/su11123257
Matthew, A. (2020). Antagonistic governance in South African fruit global production networks: a neo‐Gramscian perspective. Global Networks, 20(1), 42-64. doi: https://doi.org/10.1111/glob.12223
Medina‐Muñoz, R. D., & Medina‐Muñoz, D. R. (2020). Corporate social responsibility for poverty alleviation: An integrated research framework. Business Ethics, 29(1), 3-19. Doi: https://doi.org/10.1111/beer.12248
Moratis, L., & Melissen, F. (2019). How do the sustainable development goals question rather than inform. Resources, Conservation & Recycling, 141, 253–254. Doi: https://doi.org/10.1016/j.resconrec.2018.10.043
Panda, S., D’Souza, D. E., & Blankson, C. (2018). Corporate social responsibility in emerging economies: Investigating firm behavior in the Indian context. Thunderbird International Business Review, 61(2), 267-276. doi: https://doi-org.ukzn.idm.oclc.org/10.1002/tie.22021
Rajesh, R., & Rajendran, C. (2020). Relating Environmental, Social, and Governance scores and sustainability performances of firms: An empirical analysis. Bus Strat Env., 29, 1247–1267. doi: https://doi.org/10.1002/bse.2429
Rossouw, J., & Styan, J. (2019). Steinhoff collapse: Failure of corporate governance. International Review of Applied Economics, 33(11), 63-170. Doi: https://doi.org/10.1080/02692171.2019.1524043
Sahabbudin, A. Z., & Hadianto, B. (2020). The impact of the supervisory board on bond ratings of non-financial. Investment Management and Financial Innovations, 17(1), 15-23. Doi: https://orcid.org/0000-0001-9140-3216
Shane, P. B., & Spicer, B. H. (1983). Market response to environmental information produced outside the firm. Accounting Review, 58(3), 521-538. Doi: https://www.jstor.org/stable/246532
Silvius, A., &. (2014). Sustainability in project management: Literature review and impact analysis. Social Business, 4(1), 63–96. https://doi.org/10.1362/204440814X13948909253866
Solomon, J. (2013). Corporate Governance and Accountability, New York: John Wiley.
Starik, M. (1994). Reflections on stakeholder theory. Business and Society, 33(1), 89-95. Doi: https://doi.org/10.1177/000765039403300105
Ullah, A., Lai, A., & Marjoribanks, T. (2013). Proposed Framework for Business Sustainability Based on Business and Information Technology. Journal of Software, 8(11), 2796-2806. http://www.jsoftware.us/vol8/jsw0811-17.pdf
United Nations. (2018, November 1). United Nations Sustainability Goals. https://www.un.org/sustainabledevelopment/sustainable-consumption-production/
Velte, P. (2017). Does board composition have an impact on CSR reporting? Problems and Perspectives in Management, 15(2), 19-35. doi: http://dx.doi.org/10.21511/ppm.15(2).2017.02
Wang, Z., & Sarkis, J. (2013). Investigating the relationship of sustainable supply chain management with corporate financial performance. International Journal of Productivity and Performance Management, 8, 871–888. doi: https://doi.org/10.1108/IJPPM-03-2013-0033
Widyawati, L. (2020). Systematic literature review of socially responsible investment and environmental social governance metrics. Business Strategy and the Environment, 29(2), 619-637. doi: https://doi.org/10.1002/bse.2393
Willard, B. (2002). Sustainability advantage: seven business case benefits of a triple bottom line. New Society: Willey.
Williams, S., & Robinson, J. (2020). Measuring sustainability: An evaluation framework for sustainability transition experiments. Environmental Science and Policy, 103, 58-66. doi: https://doi.org/10.1016/j.envsci.2019.10.012
World Commission on Environment and Development. (1987). Our Common future. Oxford: Oxford University Press. https://sustainabledevelopment.un.org/content/documents/5987our-common-future.pdf
Azarenkova, G., Golovko, O., & Abrosimova , K. (2018). Management of enterprise’s financial sustainability and improvement of its methods. Accounting and Financial Control, 2(1), 1-14. doi: http://dx.doi.org/10.21511/afc.02(1).2018.01
Balatbat, M., Siew, R., & Carmichael, D. (2012). ESG scores and its influence on firm performance: Australian evidence. In Australian School of Business School of Accounting, School of Accounting Seminar Series Semester, 2, 1–30. doi: https://www.academia.edu/22337440/ESG_Scores_and_its_Influence_on_firm_performance_Australian_Evidence
Benn, S., Dunphy, D., & Griffiths, A. (2006). Enabling Change for Corporate Sustainability: Integrated Perspective. Australasian Journal of Environmental Management, 13(3), 156-165. doi: https://doi.org/10.1080/14486563.2006.9725129
Carroll, A. B. (2004). Managing Ethically with Global Stakeholders: Present and future challenge. Academy of Management Executive, 3, 114-119. Doi: https://www.jstor.org/stable/4166070
Collier, J., & Roberts, J. (2001). Ethic for corporate governance? Koers, Quarterly, 11(1), 67-71. Doi: https://www.jstor.org/stable/3857869
De los Reyes Jr., G., & Scholzb, M. (2019). The limits of business case for sustainability: Don’t count on ‘Creating Shared Value’ to extinguish corporate destruction. Journal of Cleaner Production, 221, 785-794. doi: https://doi.org/10.1016/j.jclepro.2019.02.187
Eisenhardt, K. (1989). Agency theory: an assessment and review. Academy of Management Review, 14, 57-74. Doi: https://www.jstor.org/stable/258191
Elkington, J (1998). Cannibals with forks: The triple bottom line of 21st century business. Oxford: Capstone Press, Oxford. ISBN 1-900961-27-X https://link.springer.com/content/pdf/10.1023/A:1006129603978.pdf
Freeman, R. E. (2004). Stakeholder approach revisited. Zfwu, 5(3), 228-41. Doi: https://www.ssoar.info/ssoar/handle/document/34707
Freeman, R. E., & Greenwood, M. (2020). Deepening Methods in Business Ethics. Journal of Business Ethics, 161(1), 1-3. doi: http://dx.doi.org/10.1007/s10551-019-04374-7
Friedman, A., & Miles, S. (2006). Stakeholders’ theory & practice. Oxford: University Press.
Gachie, W. (2009). Practical application of corporate governance principles in South Africa: case study of two retail companies, MBA Dissertation, University of KwaZulu-Natal, South Africa Durban. Doi: http://hdl.handle.net/20.500.11892/78985
Gachie, W. (2015). Sustainable Development in South Africa through Research in National System of Innovation. Thesis submitted in fulfilment of degree of Doctor of Administration School of Management, IT and Governance. University of KwaZulu-Natal. https://researchspace.ukzn.ac.za/xmlui/handle/10413/14667
Gachie, W. (2019). Project sustainability management: risks, problems and perspective. Journal of Problems and Perspectives in Management, 17(1)313-325. Doi: http://dx.doi.org/10.21511/ppm.17(1).2019.27
Hallstedt, S. (2017). Sustainability criteria and sustainability compliance index for decision support in product development. Journal of Cleaner Production, 140, 251-266. Doi: https://doi.org/10.1016/j.jclepro.2015.06.068
Hinke, J., Gezo, M., Smutka, L., & Strielkowski, W. (2020). Management of financial statements auditing in the Visegrad Group countries. Problems and Perspectives in Management, 18(1), 1-16. doi: http://orcid.org/0000-0001-5385-1333
King IV. (2016). Report on Governance for South Africa, and the Draft Code of Governance Principles, Institute of Directors Southern Africa, Pretoria. https://www.adamsadams.com/wp-content/uploads/2016/11/King-IV-Report.pdf
Kocmanová, A., & Docˇekalová, M. (2013). Construction of the economic indicators of performance in relation to environmental, social and corporate governance (ESG) factors. Acta Universitatis Silviculturae Mendelianae Brunensis, 60(4), 195–206. doi: https://pdfs.semanticscholar.org/f9ed/e602713c1ced19b0fdaf50454e3e2a88628b.pdf
Lal, P.M. & Keen, M. (2002). Economic considerations in community based resource use and management.Development Bulletin. 58, 68-72 Doi: http://hdl.handle.net/1885/71770
Manning, B., Braam, G., & Reimsbach, R. (2019). Corporate governance and sustainable business conduct—Effects of board monitoring effectiveness and stakeholder engagement on corporate sustainability performance and disclosure choices. Corporate Social Responsibility and Environment Management, 26(2), 351-366. doi: https://doi.org/10.1002/csr.1687
Masocha, R. (2019). Social Sustainability Practices on Small Businesses in Developing Economies: A Case of South Africa. Sustainability, 11(12), 32-57. doi: https://doi.org/10.3390/su11123257
Matthew, A. (2020). Antagonistic governance in South African fruit global production networks: a neo‐Gramscian perspective. Global Networks, 20(1), 42-64. doi: https://doi.org/10.1111/glob.12223
Medina‐Muñoz, R. D., & Medina‐Muñoz, D. R. (2020). Corporate social responsibility for poverty alleviation: An integrated research framework. Business Ethics, 29(1), 3-19. Doi: https://doi.org/10.1111/beer.12248
Moratis, L., & Melissen, F. (2019). How do the sustainable development goals question rather than inform. Resources, Conservation & Recycling, 141, 253–254. Doi: https://doi.org/10.1016/j.resconrec.2018.10.043
Panda, S., D’Souza, D. E., & Blankson, C. (2018). Corporate social responsibility in emerging economies: Investigating firm behavior in the Indian context. Thunderbird International Business Review, 61(2), 267-276. doi: https://doi-org.ukzn.idm.oclc.org/10.1002/tie.22021
Rajesh, R., & Rajendran, C. (2020). Relating Environmental, Social, and Governance scores and sustainability performances of firms: An empirical analysis. Bus Strat Env., 29, 1247–1267. doi: https://doi.org/10.1002/bse.2429
Rossouw, J., & Styan, J. (2019). Steinhoff collapse: Failure of corporate governance. International Review of Applied Economics, 33(11), 63-170. Doi: https://doi.org/10.1080/02692171.2019.1524043
Sahabbudin, A. Z., & Hadianto, B. (2020). The impact of the supervisory board on bond ratings of non-financial. Investment Management and Financial Innovations, 17(1), 15-23. Doi: https://orcid.org/0000-0001-9140-3216
Shane, P. B., & Spicer, B. H. (1983). Market response to environmental information produced outside the firm. Accounting Review, 58(3), 521-538. Doi: https://www.jstor.org/stable/246532
Silvius, A., &. (2014). Sustainability in project management: Literature review and impact analysis. Social Business, 4(1), 63–96. https://doi.org/10.1362/204440814X13948909253866
Solomon, J. (2013). Corporate Governance and Accountability, New York: John Wiley.
Starik, M. (1994). Reflections on stakeholder theory. Business and Society, 33(1), 89-95. Doi: https://doi.org/10.1177/000765039403300105
Ullah, A., Lai, A., & Marjoribanks, T. (2013). Proposed Framework for Business Sustainability Based on Business and Information Technology. Journal of Software, 8(11), 2796-2806. http://www.jsoftware.us/vol8/jsw0811-17.pdf
United Nations. (2018, November 1). United Nations Sustainability Goals. https://www.un.org/sustainabledevelopment/sustainable-consumption-production/
Velte, P. (2017). Does board composition have an impact on CSR reporting? Problems and Perspectives in Management, 15(2), 19-35. doi: http://dx.doi.org/10.21511/ppm.15(2).2017.02
Wang, Z., & Sarkis, J. (2013). Investigating the relationship of sustainable supply chain management with corporate financial performance. International Journal of Productivity and Performance Management, 8, 871–888. doi: https://doi.org/10.1108/IJPPM-03-2013-0033
Widyawati, L. (2020). Systematic literature review of socially responsible investment and environmental social governance metrics. Business Strategy and the Environment, 29(2), 619-637. doi: https://doi.org/10.1002/bse.2393
Willard, B. (2002). Sustainability advantage: seven business case benefits of a triple bottom line. New Society: Willey.
Williams, S., & Robinson, J. (2020). Measuring sustainability: An evaluation framework for sustainability transition experiments. Environmental Science and Policy, 103, 58-66. doi: https://doi.org/10.1016/j.envsci.2019.10.012
World Commission on Environment and Development. (1987). Our Common future. Oxford: Oxford University Press. https://sustainabledevelopment.un.org/content/documents/5987our-common-future.pdf
Published
2021-02-02
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Gachie, W. (2021). Practical Implementation of Sustainability Accounting: A Research of Major Public Listed Companies: Array. The Journal of Accounting and Management, 11(1). Retrieved from https://dj.univ-danubius.ro/index.php/JAM/article/view/233
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