Transcript Strategies and Resources for Integrating Sustainability in

Strategies and Resources for
Integrating Sustainability in the
Introductory Accounting Courses
Karen W. Braun
Wendy M. Tietz
History of our sustainability
journey…
Three years ago
 Third edition
 Last year
 This year
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Sustainability defined…
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“Meeting the needs of the present without
compromising the ability of future generations
to meet their own needs”
-based on UN Brundtland Report
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“The possibility that humans and other life will
flourish on Earth forever.”
-John Ehrenfeld
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“Do unto others, including future generations,
as you would have them do unto you”
-An expansion of the Golden Rule.
Importance to business leaders
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93% of CEOs believe
sustainability is
important to their
company’s future
success
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96% of CEOs believe
sustainability should be
fully integrated into
strategy and
operations of a
company
Often cited business reasons
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Cost savings (“Eco-efficiency”)
Innovation/ Product development
Consumer concerns
Competitive advantage
Brand/reputation management
Risk reduction
Employee motivation
Investor relations
Increased regulatory requirements
Ethics (‘the right thing to do’)
Measurement & Reporting
You can‘t manage what you can’t measure
 For:
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◦ Internal change management
◦ External stakeholders
Global Sustainability Reporting
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Global 100 companies
◦ Nearly 100% of European
◦ 83% of U.S.
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Global 250
◦ 95% report
U.S. Sustainability Reporting (2011)
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Fortune 500
◦ 57% report
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S&P 500
◦ 53% report
Companies that do
NOT report are now
in the minority
 More than double
2010
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Rising pressure from capital markets
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Foreign stock
Exchanges
◦ London
◦ Paris
◦ Johannesburg
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40% of U.S.
shareholder proxies in
2011 were ESG issues
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NASDAQ- June 2012
“urging” but still
voluntary
Investors want ESG Information
1,100 institutional
investors with >$30
trillion of assets
under management
are signatories
 ESG info. taken into
consideration “as
part of fiduciary
responsibilities”
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How to report?
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Leading framework
80% of the reporting
Global 250 companies
65% of the reporting
S&P 500 companies
Over 5,000 globally
Required for NASDAQ
Sustainability index
Integrated reporting
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Annual Report
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Sustainability report
International Integrated Reporting
Committee (IIRC)
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Pilot program:
◦ All Big 4, Grant
Thornton, CFA
Institute
◦ Over 80 companies
◦ 30 institutional
investors
Consulting and Assurance Services
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Big 4 dominate both
- Verdantix survey
Calls for Sustainability Education
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CEO study:
◦ Formal educational
institutions, including
business schools,
should be….increasing
the knowledge and
mindsets of future
leaders and workers
with respect to
sustainability.
AACSB
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One objective: “to
promote a greater
role for education on
sustainability
practices and CSR in
business schools”
Pathways Commission (AAA and AICPA)
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Learning experiences
should:
◦ “reflect global trends in
business”
◦ “develop a global mind
set in students”
◦ “incorporate engaging
materials that
demonstrate the role
accountants play in
society” including
“questions and problems
that need solving.”
Stewardship Function of Accounting
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“The responsible
overseeing and
protection of
something
considered worth
caring for and
preserving.”
Stewardship and Accounting
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Focus on triple bottom
line impact of a
company:
◦ Economic
◦ Environmental
◦ Social
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A broader and more
holistic view of
accounting’s role of
providing relevant
information to
decision-makers.
Accounting Curriculum & Sustainability
Introductory
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Lay ground work
Start creating a
sustainability mindset
Emphasis on high-level
critical thinking
Broad-based for nonaccounting majors, too
Upper level
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Topic specific coverage
◦ Audit: Assurance
Services
◦ Tax: tax credits
◦ Corporate Financial:
Carbon credits
◦ Systems: Materials Flow
Accounting systems.
◦ Cost: EMA
Approaches:
Introductory Financial
Part of the reporting
aspect of accounting
 Awareness of GRI
report
 Link GRI indicators
to course topics
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Introductory Managerial
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Sustainability mindset
with respect to:
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Cost measurement
Planning
Decision making
Performance
Evaluation
Connection between
business activities
and accounting
Criteria for Selection of Resources
Standard course
topics
 Short time
requirement
 Real company
applications
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Supplement to our text content
Short readings in
each chapter
 Numeric homework
problems related to
sustainability
 Chapter 15 on
Sustainability
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Website houses resources
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Sustainability resources website
General resources
Articles
 List of blogs and
news sites
 TED talk links
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Map of GRI Performance Indicators
to Financial Accounting Topics
Course Topic
Introduction to financial
accounting/reporting
Reporting accounting
information to external users
GRI report component
General discussion of CSR & GRI
Performance Indicators
Economic Performance Indicators in
general
Cash, short-term
investments, and internal
control
Society Performance Indicators - S02
(Risks related to corruption), S03 (% of
employees trained in anti-corruption), S04
(actions regarding incidents of
corruption)
Receivables
PR8 (Customer privacy - # of breaches)
and (related to sales) PR5 (practices
related to customer satisfaction, including
results of surveys measuring customer
satisfaction)
List of GRI reports and links
Recognizable
companies
 Ratings A+, A, B+, B
 Appropriate for
classroom
discussion or
assignments
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Other financial acctg resources
CSR indices
 What’s your footprint?
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Company videos
Actual companies
 Engaging students
 Short (< 5 min.) for
use inside of class
 Debriefing &
Discussion
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Video example – Secret Lives of Eggs
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The secret life of
eggs
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What is the cost of
this activity to
◦ The company?
◦ The environment?
◦ Society?
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Shown in
conjunction with
ABC
Cost/Benefit: What
costs might increase
as a result of the
proposed change?
Podcasts
Assigned for outside
of class
 Ceres
 Sustainability News &
Entertainment
 Debrief & Discuss
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Topical PowerPoints
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Topical primers
◦ Business case for
Sustainability
◦ E-waste
◦ Waste audits
◦ Life-cycle of paper bills
◦ GRI
◦ LEED certification
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One caveat
Ex: Business case for sustainability
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Cost savings (“Eco-efficiency”)
Innovation/ Product development
Consumer concerns
Competitive advantage
Brand/reputation management
Risk reduction
Employee motivation
Investor relations
Increased regulatory requirements
Ethics (‘the right thing to do’)
Current events in the news
Environmental
Leader daily email
(5-10 leading stories)
 Post on course
management
platform
 Assign for extra
credit or quiz or
exams
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Websites
GRI
 Fueleconomy.gov
 Compare
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◦ Fuel Economy ($)
◦ Environmental impact
◦ Safety
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Use as a basis for
◦ Projecting cash flows
◦ NPV, payback period
Short classroom activities
Critical thinking
 Small group
discussion
 One per topic area
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Example: Laptop budgeting activity
Find sustainability
initiatives of any
company
 Were specific dollar
amounts disclosed?
 What budgets would
be affected by these
initiatives?
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Translating plans into
budgets…
Example: Job costing activity
Supply-chain
assessment is on the
rise.
 What sustainabilityrelated information
could be collected
on the Job Cost
Record w/r/t:
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◦ DM
◦ DL
◦ MOH
Example: Outside of class activity
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Personal waste audit
Keep track for 2-3
days
Estimate cost
Who bears cost and
how?
Cost to society and
environment.
Example: GRI report discussion
Link to KimberlyClark 2011 GRI
report
 Questions
appropriate for inclass or online
discussion
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Student feedback15 resources used during semester
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Most memorable
“take-aways” from
course
◦ 25% included
sustainability
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Survey
◦ 88% agreed resources
helped them connect
sustainability to the role
accounting plays in
measuring, analyzing and
reporting business
activities
Recap
CEOs view it as
important
 Sustainability reporting is
increasing
 Investors/markets are
wanting ESG data
 Business education is
being called for
 Dovetails with
stewardship function of
accounting
 Introductory accounting
classes can help develop
a sustainability mindset
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Link will be emailed to you
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Website toolkit
 http://tinyurl.com/cmzgvl3
Questions?
Contact information:
 [email protected]
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[email protected]