Social Responsibility Accounting and Sustainable Development Introduction

Topics: Sustainability, Corporate social responsibility, Social responsibility Pages: 12 (4017 words) Published: October 29, 2006
Social Responsibility Accounting and Sustainable Development Introduction Social responsibility accounting is a concept that has gained an increasing amount of attention over the past thirty years. The concept refers to an enterprise's responsibility for the resources it uses (even if those resources are not priced in the marketplace) and for the societal contributions it makes (Gordon - Enhancing, 2). It is usually referred to as social responsibility and sustainable development (SR/SD), but it can also be described as corporate citizenship or environmental responsibility. The idea first gained significance in 1976. It was then that the National Association of Accountants (now the Institute of Management Accountants) published a research paper that outlined how to be more socially responsible and how to more properly account for this social responsibility. Because social responsibility was singled out in this paper, it has become the landmark study that identified the environment as both a separate and worthy subject of importance to be addressed by accountants (Grinnell, 1).

In addressing this issue of social responsibility and sustainable development, it is important for one to become familiar with the notion of a "triple bottom line." It is also important to understand the implications that the Sarbanes-Oxley Act of 2002 has had on SR/SD issues. At the same time, it is interesting to examine how SR/SD has been used in practice, both in the corporate world and in the classroom. Triple Bottom-Line

In any discussion concerning corporate social responsibility or sustainable development, the concept of the "triple bottom line" oftentimes arises. A relatively recent theoretical concept, the triple bottom line is essentially a "reporting mechanism" which allows businesses to take into consideration the entire economic impact of certain business decisions (Robins, 1). In other words, the triple bottom line considers not only the financial impact of individual business endeavors, but also allows decision makers to evaluate external social and environmental factors. Dubbed as such and popularized by John Elkington, the triple bottom line provides a reporting basis for corporate sustainable reporting (Prashad, D1). Sustainable reporting is the actual disclosure of the social impact and of the environmental impact of business decisions. The disclosure of such information (and the actual information) has been championed by many but also challenged by some. As with most theories, the triple bottom line has its obvious benefits but also retains some major drawbacks. This section evaluates the positive aspects of the triple bottom line theory (and associated sustainable reporting) in addition to analyzing the drawbacks of such corporate practices. Advantages of triple bottom line The triple bottom line theory and sustainable reporting both have their merits. To begin with, the triple bottom line gives decision makers the benefit of evaluating all facets of any endeavor. Not only is a given proposal or endeavor evaluated from a financial perspective, but also the social and environmental impacts are analyzed. The major benefit of this "beyond financial" analysis is to gain public confidence in the company. If people see that a company is trying to evolve into a more environmentally friendly entity, such as by reducing pollution or improving recycling efforts, then many are more likely to, say, purchase that company's product rather than a competitor's, who may not enlist such socially beneficial practices. According to Bill Joy, co-founder of Sun Microsystems Inc., the reason for enlisting sustainable practices is simple: "Businesses can talk all about this social responsibility stuff, but they are likely to do something about it only if there's an economic reason for them to do it." (Prashad, D1). Sustainability basically means staying in business for the long haul. In other words, sustainability is the...
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