Production development to serve the needs of the human race is increasingly diverse, providing opportunities for the growth in manufacturing and service industries. The consequences of that development is the destruction of habitat, the depletion of resources in the countries, the increasing risks of disease and the devastation of natural disasters. Therefore, many nations have adopted sustainable development platforms, including responsible consumption and production, ensuring fresh living environment on the earth and under water in order to combat climate changes affecting human being on the global, and then, leading to sustainable development. Accordingly, enterprises are also directed towards the development of sustainable production models in order to minimize harm to the environment. Accountants play an important role in controlling capital, accounting costs, analyzing cost structure, determining the efficiency of enterprises, so it is important for enterprises to focus on sustainable development in the world today. Sustainability accounting is becoming increasingly popular among business executives and business managers. Nowadays, as science and technology develop, the cost competitiveness of products is becoming more and more serious. The more managers pay special attention to the sustainable development, the more sustainability accounting in enterprises is interested. The most importance of sustainability accounting is combining economic performance as well as resolving social and environmental issues. The term of sustainability is defined in the World Commission on Environment and Development (1987) as the development of the current generation, that is not harmful or impair the environment and natural resources, ensures fully meet the needs of the future. In the corporate perspective, the corporate governance focuses not only for profits but also for environmental-friendly benefits, driving to corporate social responsibility (The Commission of European Communities 2001, p. 6).
The questions are placed for discussing in this paper. How is sustainability accounting interested in strong growth of science and information technology?; How sustainability accounting has influenced the profit of the business?; How does it change the perception of business managers?; How has this research been conducted?; and finally, how does sustainability accounting contribute to the sustainable development of the business and the global environment?
2. How is sustainability accounting researched?
The term triple bottom line integrates economic, social and environmental responsibilities which is also called sustainability. Gimenez, Sierra and Rodon (2012, p.149) examine the influence of the programmes which different firms have different approaches on each components of the triple bottom line. For example, recycling, reuse, or waste reductions belong to environmental programmes; or improving worker safety and health or projects to support the external community are social practices. Analysing data obtained in a large scale, it can be found that internal environmental programmes have a positive effect on the three pillars of the triple bottom line. However, internal social initiatives have a positive effect on only two elements: social and environmental performance. It seems that firms still need to achieve positive financial gains from these social programmes. Furthermore, concerning the external or supply chain initiatives, their results indicate that supply chain collaboration support to enhance all three components while supply chain assessment has no effect on the triple bottom line.
In the research paper of Toukabri, Ben Jemâa, and Jilani (2014), they mention about a new form of accounting in solving socio-economic issues. This is the corporate social responsibility; and based on its practices, its disclosure and the explanatory theories, a framework for developing the model of social accounting is promoted. Following this guidance framework, the future development of social and environmental accounting should benefit from the history of financial accounting, moving forward to the sustainable development. The other line of this study examines the disclosure of social information through the social contract between companies and society. In practice, this new term of social reporting is the important technique for businesses to participate in society. The explanations of the corporate social responsibility are the responses for the increasing interest in the transparency and accountability.
While Toukabri, Ben Jemâa, and Jilani (2014) focus on the explanatory theories and conceptual framework, the sustainability accounting framework of Lamberton (2005) is ideal for applied levels although it is a huge challenge for businesses. Accompany with three different methods of sustainability accounting, which are sustainable cost and full-cost accounting, natural capital inventory accounting, and input–output analysis, the triple bottom line is formed, leading to the specification of a comprehensive sustainability accounting framework. Five components of a sustainability accounting framework in the viewpoint of Lamberton (2005, p. 16) are objectives of the sustainability accounting framework; principles of consolidation the application of the framework; data collection tools, accounting records, and measurement techniques; publication of the information to stakeholders; and qualitative attributes of information reported using the framework. Understanding clearly these components can assist to address critical issues related to the reporting of sustainability accounting information in the development stage.
In addition, corporate sustainability can be evolved over a long period of time, relying on the sustainability of its stakeholder relationships. Perrini and Tencati (2006, p.298) indicate that the needs of stakeholders should be satisfied in an appropriate and effective way to achieve corporate sustainability. In this view of point, they introduce the sustainability evaluation and reporting system (SERS), developed by SPACE (the Research Centre of Bocconi University on Risk, Security, Occupational Health and Safety, Environment and Crisis Management). The aims of this system are to assess and control corporate behaviour to satisfy multiple stakeholder concerns, and then, support to communicate the overall corporate performance in the qualitative and quantitative research. SERS scheme includes the overall reporting system, which balance and integrate financial and non-financial performance indicators such as annual report, social report, and environmental report. The scheme also encompasses the integrated information system and the key performance indicators for corporate sustainability, which support planning, measure and evaluate the successful of the corporate strategy and behaviour in the trend of sustainability accounting to different stakeholder groups.
Corporate sustainability is supposed to be an important role for the long term market value. The questions are whether it really creates value for the business or not and there is any evidence to support that assumption. Study of Lo & Sheu (2007) examines the impact of sustainability on firm value in the US market from 1999 to 2002. Through analysing statistics, empirical model, using variables, univariate tests and multivariate tests from a large of financial and non-financial firms, it can be seen that sustainable firms consistently possess higher value than other firms. In other words, businesses are commended on the market for their efforts to combine economic, social and environmental management in their development strategies. Hence, there is a positive relationship between corporate sustainability and market value. That is the motivation for companies to focus not only on profits but also manage environmental and social issues when making business decisions.
As mentioned above, eco-interested businesses take advantages from corporate sustainability in increasing their value. It is necessary for managers to communicate clear and transparent information through the overall report system to stakeholders. That means the pressure which managers suffer is also increasing in both aspects: maximizing the profit and minimizing the effects of environment derived from production process (Saremi & Nezhad 2014, p.2). That is where environmental accounting comes in. They define environmental accounting is the accounting for any costs and benefits changed in the process of producing goods and services which leads to changes in the environmental impacts. Therefore, standardizing the appropriate environmental accounting system can help to improve financial as well as environmental performance in future. As a result, the strength of the enterprise on the competitive position is upraised comparing with other enterprises which only apply general accounting.
The role of accountants becomes more and more crucial in describing the real picture of what is happening so that the best solutions for the sustainability development can be practical. In the viewpoint of ICAEW (2004), there are some ways in which different mechanisms for strengthening sustainability present challenges and opportunities directly related to the role of professional accountants. Threats and opportunities from sustainable development include environmental, social and economic issues; and the role of accountants is evolving policies to tackle these issues. Each of the mechanisms expects the preparation, interpretation and reporting of information; and the role of accountants in these stages is exerting performance measurement and reporting in order to contribute to make relevant decisions. Moreover, it is important for professional accountants to supply readily accessible and reliable information to multi-stakeholders, who are now increasingly interesting in sustainability.
According to Ernst & Young LLP (2013), there is a number of values of sustainability reporting. 50% of firms publish sustainability reports get better reputation because it is the most important way to build public trust in business. Companies also meet the expectations of employees who are primary audience for sustainability reporting. Besides, reporting firms ranked highly for sustainability have Kaplan-Zingales Index scores that are 0.6 lower than the scores for low-sustainability companies. A lower score signifies fewer capital constraints. Finally, reporting helps make organizations’ decision-making processes more effective, increasing efficiency and waste reduction.
Sustainability accounting has been studied and applied in practice in enterprises; and the centre of it is environmental accounting. Environmental accounting will help businesses the following benefits:
• Improve the competitive ability. The direct or indirect bad impact on the environment will make the image of the company not beautiful in the eyes of consumers, leading to loss of trust and prestige of enterprises.
• Create strategic advantages. The presence of environmental protection in the products of the business will make a considerable difference to consumer awareness as the environmental pollution is increasingly serious and environmental protection measures are enhanced.
• Cost savings for businesses. Enterprises that do not use environmental accounting, are fined due to environmental pollution. These fines are not considered as reasonable expenses. When investing in environmental protection, successful is more sustainable and long-lasting.
• Strengthen and uphold relationships. State agencies and environmental organizations always pay attention to economic development along with environmental protection. Businesses will obtain many incentives from state agencies as well as environmental organizations when conducting in a good way.
In the current trend, businesses will look forward to management business with environmental protection are the necessary directions of an enterprise to survive and develop sustainably. Sustainability accounting provides information on environmental protection through monetary indicators or environmental reporting. Environmental protection and environmental accounting are issues that are timely and urgent, but also extremely difficult and challenging. Environmental accounting is a necessary tool not only to help businesses meet the requirements of environmental protection, but also improve business efficiency, enhance competitiveness.
Stakeholder theory was initiated in Freeman's (1984) Strategic Management study: A Stakeholder Approach, the theory of organizational governance and business ethics. It deals with ethics and values ??in corporate governance. In this theory, the term "stakeholders" refers to any individual or group of people who are directly or indirectly affected by the behavior of the organization. Stakeholder theory suggests that in addition to shareholders there are other stakeholders involved in the business process including government agencies, political groups, trade unions, communities, relevant companies, potential customers, and the public.
From an ethical viewpoint, organizations have an obligation to treat all parties equally. In the case of stakeholder conflicts of interest, enterprises must be obliged to achieve the optimal balance between them. From the management point of view, the important role of management is to assess the importance of meeting the needs of the stakeholders to achieve the strategic goals of the enterprise. As the expectations and power relationships of stakeholders are constantly changing over time, the organization must continually adjust its operating strategies and disclose information to meet the needs of the parties involved.
Because of the increasingly important position of the manufacturing sector in society and the direct and indirect impacts of production activities on the environment, the environmental regulations from the legal agencies are increasing strict requirements for businesses, especially manufacturing enterprises operating in the field of environmental sensitivity.
Hence, for their own benefit, stakeholders always expect enterprises to behave in a consistent manner with their environmental responsibilities to achieve legal compliance in society thereby enabling them to achieve economic benefits. The stakeholders will also assess the implementation of environmental responsibility of enterprises, through the environmental information that enterprises publish. Therefore, the theory of related parties is used to explain why businesses apply environmental accounting for environmental disclosure to meet the expectations of stakeholders regarding environmental responsibility of business. This theory is used to study and evaluate the pressure-factor groups from the stakeholders that influence the ability of applying environmental accounting in enterprises.
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