Accounting for Sustainability

by Hopwood, Anthony; Unerman, Jeffrey; Fries, Jessica

• ISBN13: 9781849710671
• ISBN10: 1849710678
• Format: Paperback
• Copyright: 2010-07-31
• Publisher: Routledge

Summary

Perhaps the most critical challenge facing business and society generally is to tackle climate change and live within our ecological limits, while continuing to enjoy economic prosperity. Key to addressing this challenge is the need for all organizations, public and private, to embed sustainability into their "DNA". Although sustainability accounting has developed in recent years, relatively few organizations have comprehensive systems and procedures to ensure that sustainability considerations are taken into account fully and consistently in decision-making and reporting. The Prince's Accounting for Sustainability Project has sought to address these issues in three ways. Firstly, through the identification of key principles to help embed sustainability based on discussions with over 150 organizations; secondly, through the development of a decision-making tool to enable sustainability issues to be taken into account more robustly and consistently in decision-making; and thirdly, through its innovative Connected Reporting Framework (CRF). The CRF facilitates the identification of an organization's main sustainability impacts and shows how these impacts relate to and interact with its strategic objectives and operating performance.This book presents examples of how organizations have used these accounting for sustainability tools and principles to embed sustainability into their DNA. Key features include: " practitioner-oriented illustrations of 'connected thinking' between the organization's sustainability agenda, overall strategy and core business activities;" examples of processes that have been followed to enable sustainability issues to be taken into account clearly and consistently in strategic and day-to-day decision-making;" examination of how the embedding of sustainability extends beyond an organization's own boundaries to take into account suppliers and customers;" examples of how to measure sustainability performance and financial impacts and the systems and processes necessary to support the collection of relevant data; and" identification of barriers to embedding sustainability and ways in which organizations have sought to address and overcome these.In-depth cases studies from Aviva, BT, the Environment Agency, EDF Energy, HSBC, Novo Nordisk, Sainsbury's and West Sussex County Council paint a rich picture of accounting for sustainability in practice and a wealth of lessons and examples of both common pitfalls and good practice. This book is indispensible for all business leaders, accountancy professionals and others seeking to embed sustainability into the DNA of their organizations in the pursuit of both better business and better sustainability performance.

Author Biography

Anthony Hopwood is a world-leading academic in the field of accounting. A former Dean and Professor at the Sid Business School of the University of Oxford, he was inducted into the USA's Accounting Hall of Fame in 2008. Jeffrey Unerman is Professor of Accounting and Accountability at Manchester Business School, University of Manchester. He has a long standing research record in sustainability accounting. Jessica Fries is Director of The Prince's Accounting for Sustainability Project, on secondment from PricewaterhouseCoopers where she has worked with a wide range of organizations to help them to embed sustainability.

Table of Contents

Foreword by His Royal Highness The Prince of Wales	p. xiii
List of Figures, Tables and Boxes	p. xv
List of Contributors	p. xvii
Acknowledgements	p. xxiv
List of Acronyms and Abbreviations	p. xxv
Introduction to the Accounting for Sustainability Case Studies	p. 1
Sustainability, sustainable development and climate change	p. 3
The role and significance of sustainability for organizations	p. 8
Embedding sustainability considerations into business practice through accounting for sustainability	p. 15
Summary of the case studies	p. 19
Conclusions	p. 26
The Prince's Accounting for Sustainability Project: Creating 21st-Century Decision-Making and Reporting Systems to Respond to 21st-Century Challenges and Opportunities	p. 29
Introduction	p. 29
The ten main elements to embed sustainability into decision-making	p. 32
An overview of the A4S decision-making tool	p. 32
An introduction to the concept of connected reporting and the Connected Reporting Framework (CRF)	p. 36
Next steps: The creation of an International Integrated Reporting Committee	p. 44
Sainsbury's: Embedding Sustainability within the Supermarket Supply Chain	p. 47
Introduction	p. 47
The context of the A4S decision-making tool at Sainsbury's	p. 49
The lamb supply chain and sustainability	p. 51
Sainsbury's perspective on embedding sustainability	p. 54
The supplier perspective	p. 63
The next step for Sainsbury's: The Connected Reporting Framework (CRF)?	p. 65
Conclusions	p. 69
Using the Connected Reporting Framework as a Driver of Change within EDF Energy	p. 73
Introduction: EDF Energy	p. 73
The case study	p. 74
Background and history of EDF Energy and accounting for sustainability	p. 74
EDF Energy's sustainability journey	p. 81
Conclusions	p. 89
A Golden Thread for Embedding Sustainability in a Local Government Context: The Case of West Sussex County Council	p. 95
Introduction	p. 95
Chapter overview	p. 96
Background: Local government and West Sussex County Council	p. 97
Embedding sustainability within the county council	p. 99
Policies, performance structures and tools	p. 107
Conclusions	p. 123
Building from the Bottom, Inspired from the Top: Accounting for Sustainability and the Environment Agency	p. 129
Introduction	p. 129
The Environment Agency: Background information	p. 131
Environmental management and strategy	p. 132
Environmental accounting: A systems approach	p. 134
Connected actions, connected reporting, carbon reduction, staff mileage, key performance indicators (KPIs) and corporate scorecards	p. 136
The Prince's Accounting for Sustainability Project (A4S), the Connected Reporting Framework (CRF) and the Environment Agency	p. 142
Conclusions	p. 144
Evolution of Risk, Opportunity and the Business Case in Embedding Connected Reporting at BT	p. 149
Introduction	p. 149
Changes in directions of causality: Reporting driving action, action driving reporting	p. 150
Evolution of risk and opportunity considerations in sustainability decisions: Making the business case	p. 151
Nuancing the business case: Degrees of uncertainty and appealing to the interests of managers at different levels	p. 153
Materiality helping to determine the content of connected sustainability reporting	p. 155
Case example: Supply-chain initiatives - Sourcing with Human Dignity	p. 162
Conclusions	p. 170
Sustainability and Organizational Connectivity at HSBC	p. 173
Introduction	p. 173
Linking financial and non-financial performance and risk	p. 174
Implementation of the Equator Principles and sector policies	p. 175
Integration of responses to environmental impacts of HSBC's business and culture	p. 180
The role of sustainability reporting	p. 185
Conclusions	p. 188
'One Aviva, Twice the Value': Connecting Sustainability at Aviva plc	p. 191
'One Aviva, one world'	p. 192
Linking responsibility and sustainability	p. 193
Connected reporting	p. 197
Climate change and carbon-neutral Aviva	p. 199
Stakeholders and the value chain	p. 201
Embedding sustainable and responsible investment practices	p. 203
Reporting practices	p. 207
Conclusions and lessons from Aviva	p. 209
Integrated Reporting at Novo Nordisk	p. 215
Introduction	p. 215
Context and background	p. 216
The Novo Nordisk 'Way of Management'	p. 219
Triple bottom line (TBL) management	p. 222
'Sarb-Oxing' the non-financial control environment	p. 224
The balanced scorecard	p. 225
Facilitation	p. 228
Full integration at Novo Nordisk: Embedding sustainability	p. 229
Summary and Conclusions	p. 233
Introduction	p. 233
Lessons learned	p. 234
Summary	p. 242
Glossary	p. 243
Index	p. 251
Table of Contents provided by Ingram. All Rights Reserved.