Sustainability and environmental accounting Example

Essays on Sustainability and environmental accounting Essay Outline potential sources of information that superannuation funds could use to gather data about a company’s sustainability operations. Potential sources of information about sustainability of companies’ operations Information used by superannuation or pension funds may be classified as published reports by companies, completed studies or advisories contracted from third-party information providers, or primary and secondary data gathered by the fund’s staff for in-house analysis where the information is assessed. 1. Company issuances Corporate social responsibility (CSR), good governance, and environment sustainability compliance reports published and released by the companies themselves. These are in the form of firm-issued, general purpose non-financial reports prepared for the benefit of shareholders, stakeholders, and the public in general, either as standalone or integrated reports to comply with mandatory regulations (Godfrey, et al. 2010). The quality of corporate reporting may be hampered by practices considered deficient to satisfy the information needs of different readers, including superannuation funds (Rankin, et al., 2012). 2. Studies and advisories provided by external information providers Superannuation/pension funds rely on external sources of information because: Judging sustainability issues deserve attention in each sector requires specialised knowledge and broader information which the fund’s staff members do not have and could not acquire (or could acquire only at great expense); and For most funds, sustainability is only a secondary criterion or supplementary topic, the main criterion being the ability of the firm to generate consistent returns (Kasemir SÃ ¼ess, 2002, p. 21). 2.1. External providers of sustainability investment services Superannuation or pension funds which include sustainability criteria in its choice of portfolio tend to rely on external providers of sustainability investment services. Such services are known as ‘sustainability contractors’ and offer portfolios or corporations rated to have a ‘good sustainability record’ (Kasemir SÃ ¼ess, 2002, p. 20). In this case, the investment process is delegated to the investment service provider, also relying on their expertise. 2.2. External agencies assessing environmental and social reports by corporations 2.2.1. Agencies provide support to funds through reports analysing all major corporations categorized by factors (Kasemir SÃ ¼ess, 2002, p. 20). The fund retains the prerogative of deciding which corporations to invest in depending on the factors it has chosen. 2.2.2. Commercial research companies provide information to funds concerning the sustainability performance of companies grouped according to industries and rate them according to a set of criteria, ranking or rating the companies against each other (Super Ratings, 2012). 2.3. Non-commercial providers of sustainability information 2.3.1. Such sources as non-governmental organisations (NGOs) provide information for decision-makers of funds on a for free. Such information may be somewhat general in character with qualitative analysis and quantitative data per company (Jackson, 2006). 2.3.2. Academic sustainability assessments are seldom used, and when they are they are used only as supplementary information, because they are usually indepth and require a great amount of time to read (Kasemir SÃ ¼ess, 2002, p. 21). 3. Information sources for internal/ in-house assessment Some funds prefer to conduct their activities in-house with primary research, because: Mixing analysis from several outside sources may have applied different paradigms or models and would therefore be incompatible or incomparable, creating confusion; Even though the firm may be buying third-party information, internal staff must have a feel of the data and processes which the information service provides. 3.1. Surveys conducted by distributing questionnaires to companies about their environmental policies. 3.2. Company visits and interviews with company officers or managers on the firm’s sustainability practices and policies (Kasemir SÃ ¼ess, 2002, p. 21). References Association for Sustainability in Business 2012 Official website. Retrieved 6 November 2012 from http://sustainabilitybusiness.com.au/index.php/downloads-a-links Godfrey, J; Hodgson, A; Tarca, A; Hamilton, J; Holmes, S 2010 Accounting Theory 7th Edition. John Wiley Sons, Hoboken, NJ Ioannou, I Serafeim, G 2012 ‘The Consequences of Mandatory Corporate Sustainability Reporting.’ Harvard Business School. October 26. Retrieved 6 November 2012 from http://www.hbs.edu/faculty/Pages/download.aspx?name=11-100.pdf Jackson, W 2006 Study probes "carbon footprint" of UK funds, Fund Strategy, p. 10, Business Source Complete, EBSCOhost, viewed 6 November 2012. Kasemir B SÃ ¼ess, A 2002 ‘Sustainability Information and Pension Fund Investment’ Global Environmental Assessment Project. Belfer Center for Science International Affairs, Harvard University. Rankin, M; Stanton, P; McGowan, S; Ferlauto, K; Tilling, M. 2012 Contemporary Issues in Accounting. John Wiley Sons Australia, Ltd. Super Ratings 2012 Official website. Retrieved 6 November 2012 from http://www.superatings.com.au Trucost plc 2008 ‘Carbon Counts 2008: The Carbon Footprints of Australian Superannuation Investment Managers’. Retrieved 6 November 2012 from http://www.aist.asn.au/media/2249/aist_2008_research_trucostreport.pdf Trucost plc 2011 ‘Carbon Counts: The Carbon Footprints of Australian Superannuation Investment Managers’. Retrieved 6 November 2012 from http://www.aist.asn.au/media/95963/trucost_report_final_06_09.pdf