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How accounting and accountants may contribute in sustainability?

Arzu Özsözgün Çali#kan
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Arzu Özsözgün Çali#kan , (2014),"How accounting and accountants may contribute in sustainability?", Social Responsibility
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Professor Charl de Villiers and Professor Chris van Staden, Vinal Mistry, Umesh Sharma, Mary Low, (2014),"Management
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Markus J. Milne, Suzana Grubnic, Patty McNicholas, Carolyn Windsor, (2011),"Can the financialised atmosphere be
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How accounting and accountants may
contribute in sustainability?
Arzu Özsözgün Çalışkan
Arzu Özsözgün Çalışkan Abstract

is based at Faculty Purpose – The main purpose of this paper is to illustrate the role of accounting and accounting
of Economic and professionals in sustainability by conducting an in-depth literature review.
Administrative Sciences, Design/methodology/approach – This is a review-based article that does not contain empirical
Yildiz Technical research. A comprehensive literature research was conducted by using online databases of selected
University, Istanbul, scientific publishers and using keywords such as accounting, accounting professionals, sustainability,
sustainability reporting and sustainability accounting. In addition to that, web pages of the accounting
Turkey.
regulatory bodies and four big audit companies were also investigated.
Findings – Based upon the literature survey, it can be said that there is a lack of defining the
relationship between the sustainability concept and accounting and also potential solutions to
overcome the problems which create challenges for accounting and accounting professionals.
Research limitations/implications – The only limitation of the study can be explained as it being a
literature survey.
Practical implications – It is expected that the results of the paper will appear in several applications
among accounting professionals, the firm that they work in, the association of professional accountants,
education institutions and all the stakeholders of accounting, especially in countries with the relatively
early stage of sustainability practices. The paper may give insight into aforementioned stakeholders of
accounting in reformation of accounting toward sustainability.
Originality/value – The main contribution of this paper is to fulfill the gap in the accounting and
sustainability literature by suggesting “certified sustainability accountant” credential that is equipped
with core knowledge of environmental engineering as a specialized profession to handle the technical
accounting problems that are related to sustainability.
Keywords Accounting, Sustainability reporting, Accountants, Non-financial reporting, Corporate
sustainability
Paper type General review
Introduction
Sustainability is a concept that has gained increased attention among social and economic
actors in recent years, particularly within the business world. Sustainability is a preferred
approach for almost all fields and issues of social life. Examples of concepts that are used
in relation to sustainability are:
sustainable politics;
sustainable communities;
sustainable agriculture;
sustainable usage of oceans;
sustainable ecosystems;
sustainable urbanization;
Received 17 April 2012 sustainable development; and
Revised 4 March 2013
Accepted 4 March 2013 sustainable business.
PAGE 246 SOCIAL RESPONSIBILITY JOURNAL VOL. 10 NO. 2, 2014, pp. 246-267, © Emerald Group Publishing Limited, ISSN 1747-1117 DOI 10.1108/SRJ-04-2012-0049
In consideration of these examples, sustainability is a popular trend of the new century, and
its meaning differs according to the field it is used in (Aras and Crowther, 2009a; Sherman,
1990; Aras and Crowther, 2009b; Aras and Crowther, 2008). Sustainable development is
one of the most prominent concepts among these examples. Following the release of Our
Common Future, also known as the Brundtland Report and published by The World
Commission on Environment and Development in 1987, the concept of sustainable
development gained worldwide prominence (Roosa, 2010). According to the report,
sustainable development is defined as meeting today’s needs without creating a threat for
the needs of future generations (Roosa, 2010; Glavic and Lukman, 2007; Sisaye, 2011a,
2011bKatrinli et al., 2011; Isaksson and Steimle, 2009; Bos-Brouwers, 2009; Cabezas et al.,
2003).
It is possible to say that development levels of countries differ significantly from each other
across the world. Advancements in technology, easy transfer of financial sources and
technology and financial liberalization are some of the factors that affect the economies of
nations and their levels of development. In addition, these variations create new conditions
for corporations to accommodate to. Furthermore, there is an increased interest in the
environmental and social consciousness of the stakeholders, especially the customers. As
a result of these developments, evaluation of businesses’ performances and their
orientation ability should be based on non-financial information, as well as financial results.
In the new circumstances that firms are monitored more closely and are required to offer
more information for transparency, companies are responsible for meeting the needs of
both shareholders and all the other stakeholders to continue their existence (Aras and
Crowther, 2008; Porter, 2003). After all, corporations are an essential part of the community
and the environment in which they perform, and their competitiveness is closely correlated
with their skills of adaptation to new social, environmental and economic conditions (Porter,
2003). For instance, increase in the level of education is generally considered as a social
issue, but if there is advancement in education level in the region where a company
performs, this advancement would positively affect the firm’s competitiveness. In other
words, if there are social developments related to business operations, these
advancements would enhance the economic benefits derived from the improvements
(Porter and Kramer, 2002). In this respect, when corporations intend to increase their
capacity to compete, it is necessary to consider the impact of their operations on
economic, environmental and social structures, and also to report these effects when the
firm’s stakeholders demand to be informed. However, the traditional reporting system deals
only with the financial results of business operations. The information systems providing
data for reporting are also configured in parallel with the production of financial results.
Hence, the data requested on social and environmental impacts of activities are excluded
from the system (Saravanamuthu, 2004). However, the recent developments reveal the
need for a new reporting system that indicates economic, social and environmental
impacts of business operations as a whole. The new requirement means new
responsibilities for accounting and accounting professionals as they construct and conduct
the reporting system.
Accounting is an important measurement system of businesses activities. Therefore, there
is a growing pressure on accounting and professional accountants to better integrate
sustainability into corporations’ decision-making system to direct their behaviors toward
sustainable development. The role of accounting has become more crucial, especially
today when the inadequacy in the natural resources and the problems of social issues
increase for present and future generations. Hence, the main purpose of this paper is to
illustrate the role of accounting and accounting professionals in sustainability by
conducting an in-depth literature review. Therefore, a comprehensive literature research
was conducted by using online databases of selected scientific publishers and using the
following keywords: accounting, accounting professionals, sustainability, sustainability
reporting and sustainability accounting. In addition, web pages of the accounting
regulatory bodies and big four audit companies were also investigated. The paper attempts
VOL. 10 NO. 2 2014 SOCIAL RESPONSIBILITY JOURNAL PAGE 247

to answer what is accounting and the roles accountants can play in sustainable
development and corporate sustainability. In accordance with this purpose, the problems
that are faced by accounting and professional accountants to achieve a sustainability goal
are also examined and some solutions to tackle this challenge are also proposed. The
paper is structured as follows: first, the literature on sustainability and sustainable
development is reviewed. Then the issues of corporate responsibility, sustainability
reporting and the role of accounting and accountants in sustainability are presented,
followed by the conclusions.
Sustainability and sustainable development

Corporations, community and environment are integral parts of a system that correlate to
each other. Sustainability acquires a different meaning in relation to each component. With
regard to companies, sustainability refers to the ability of the company to continue its
existence for a long time, while keeping in accord with their stakeholders. With regard to the
community, on the other hand, sustainability implies consuming limited resources without
jeopardizing the survival of future generations and, in parallel with this aim, efficient and
productive utilization of the resources (Yazici, 2010).
Humanity, the creator of business organizations, is a part of the ecological system. Both
economics, which is about the balance between limited resources and the requirements of
the people, and ecology, which answers to the coordination of nature, share the same
etymological origin – the Greek word oikos, meaning the household. In this context,
economy that answers how persons earn their living and fulfill their needs and desires and
ecology that examines the order of nature and the relationships of animals and plants with
their organic and inorganic environment, have the same origin (Common and Stagl, 2005).
Within this framework, sustainability refers to the preservation of the partnership between
economics and ecology, so that the needs of future generations will not be ignored
(Common and Stagl, 2005). All economic activities are related to environment and natural
resources, as both the inputs needed for the activities are obtained from nature, and
pollution is created by these activities. Nevertheless, industrialization and large-scale
production that aim to provide for human needs have also resulted in both devilish
consumption and other adverse outcomes, such as global warming, air and water pollution,
depletion of natural and environmental resources and damages to human health and
quality of life (Cabezas et al., 2003; Setthasakko, 2009). As a result of these implications,
in the second half of the twentieth century, many scientists have argued that the capacity
produced by the alliance between economics and environment is not sufficient anymore,
and that it should not only be protected but also should be increased. What we experience
today is a serious privation of this capacity. The possibility of such privation was first raised
in the 1790s, by academics who applied an ecological evolutionary analysis of population
growth. According to these scholars, the increase in population would affect industrial
production, food scarcity, environmental health and climatic conditions (Sisaye, 2011a;
2011b; Pisani, 2006). On the other hand, economic growth and the increase in the
economic scale have been regarded as a remedy for poverty and an instrument for
improving the standards of living (Common and Stagl, 2005; Harris, 2000). While many
countries have recorded significant improvements as reflected in their gross domestic
product levels and the Human Development Index, we do not observe an even distribution
of these improvements. In addition, the activities aimed at reaching better life conditions
and higher levels of wealth are also disputed due to their negative effects on environment
and social circumstances (Harris, 2000). To put it differently, although current global
economic activities are perceived as a threat due to the damage to the capacity that is
required to satisfy the needs of future generations, the same worldwide activities are
presupposed to resolve poverty (Common and Stagl, 2005). From this overview, it is clear
that sustainability and sustainable development secure their position as crucial concepts
that characterize the dilemma of the twenty-first century, which also presents a growing
awareness about a coming ecological crisis (Pisani, 2006).
PAGE 248 SOCIAL RESPONSIBILITY JOURNAL VOL. 10 NO. 2 2014

Even though the concept of sustainability has been increasingly used in the second half of
the twentieth century, the research work related to the issue dates back to the 1840s. It has
drawn significant attention following the publishing of Our Common Future, also known as
the Brundtland Report, which was adopted by The World Commission on Environment and
Development in 1987, leading to serious studies on the relationship between sustainable
development and environmental issues (Quental et al., 2011; Broniewicz, 2007). The
commission was established by the United Nations in 1983 to accomplish the objective of
sustainable development and to settle for long-term environmental strategies (EPA, 2001;
Quental, 2011). In the Brundtland Report, sustainable development was defined as “the
ability to meet the needs of present generations without compromising the ability of future
generations to meet their own needs.” (Glavic and Lukman, 2007; Sisaye, 2011a; 2011b;
Katrinli et al., 2011; Isaksson and Steimle, 2009; Davidson, 2011). Although it is possible to
encounter different definitions of sustainable development in the literature, the Brundtland
Report’s definition is the most widely accepted. A significant point in this definition is that
the forthcoming generations are acknowledged as stakeholders of the current generations.
The reason behind this recognition is the idea that while economic growth is necessary to
solve humankind’s current serious problems, it should not be an excuse for ignoring the
right to life of the next generations (Isaksson and Steimle, 2009). The report emphasizes
that all communities, whether industrialized or not, benefit from the ecosystem, and there
are interconnections between economy and environment, so it is inevitable to secure a
compromise between them (Hopwood et al., 2005).

In essence, sustainability incorporates a multilateral perspective that involves different life
forms, which share the same planet, and therefore, are correlated to each other. This
interrelationship is represented by an insight that is provided by establishing connection
between individuals and organizations and broadly all the components of national and
international community, such as the market, economics and industry (Aras and Crowther,
2009b; Sisaye, 2011a; 2011b). Within this network, sustainable development emphasizes
the evolution of the human community through a perspective of economic responsibility that is
in accordance with environmental and natural processes. In the framework of sustainable
development, the limits of economic, social and environmental resources are considered to
contribute to the wealth of both existing and coming generations, and their improvement
depends on the policies at local, regional and national and transnational levels (Glavic and
Lukman, 2007). In this respect, sustainable development essentially refers to a radical change
in the conception of the relationships between humanity and nature and among people and
among different generations (Hopwood et al., 2005). Sustainable development is a
wide-ranging concept that incorporates economics, social justice, environmental science and
management, business management, policies and regulations (Wilson, 2003), referring to a
process of change in the deployment of resources, in corporate change and in the direction of
investment and technological advancement. The major characteristic of this process is that the
changes in the aforementioned elements arise in concert, aiming to enhance the potential of
meeting the needs and expectations of existing and future generations (UN, The World
Commission on Environment and Development, 1987). The concept of sustainable
development signals a belief that people could care for the needs of others, and could
change and improve their lives to protect the world and future generations (Sharp, 1992). The
Brundtlant report included a series of recommendations about the integration of sustainable
development into the policies of all countries, indicating the factors that led to the increasing
difference between the poor and the rich. This advice includes:
emphasizing the conservation and enhancement of resources;
maintaining sustainable population growth;
risk management and the redirection of technology;
integrating environmental sensibility in decision-making mechanisms; and
increasing international collaborations (Quental et al., 2011).

The commission also asserted that sustainable development necessitates the following
components (Sherman, 1990):
developing a political system that secures the participation of citizens in
decision-making processes;
structuring an economic system, which is self-sufficient and sustainability-based, to
produce surpluses and technological knowledge;
establishing a social system that produces resolutions for the problems caused by
inharmonious development;
maintaining a production system that respects the ecological basis of development;
developing a technological system that constantly searches for new solutions;
having an international system that assists in improvements in finance and trade
models; and
effecting a management system that is flexible and has the capacity for self-correction.
In this context, environment, economy and society are components of sustainable

development, and it requires simultaneous provision of social equity, economic growth and
environmental protection. The report increased the awareness related to the relation
between economic growth and environmental protection while emphasizing the inevitability
of economic development for the developing countries, as well as the necessity of transition
to an environmentally strong sustainable development perspective (Pisani, 2006).
The publishing of the Brundtland Report enhanced the international consciousness about
sustainable development and contributed to the success of the Declaration on Environment
and Development, or the Rio Declaration, in 1992 (Quental et al., 2011). By bringing
governmental and non-governmental actors together, the Rio Summit provided a basis for
the solution of the arising tension between environment and sustainable development, and
produced important outputs, such as conventions on climate change and biodiversity, the
statement on forestry and the Agenda 21 (Atkinson et al., 2007). The Agenda 21 consists
of four main parts, in parallel with the dimensions of sustainable development:
1. “Social and economic dimensions”, involving international collaboration, struggle

against poverty, change in consumption patterns, population control, human health
control, improvement in settlement areas and integration of environment and
development into decision-making processes.
2. “Conservation and management of resources for development”, including elements
such as protection of the atmosphere, land resources, forestry, oceans, mountains and
biological diversity and the prevention of desertification.
3. “Strengthening the role of major groups” relates to the role of women, children, youth,
non-governmental organizations, workers and their trade unions, business and
industry, scientific and technological community, and finally the farmers in sustainable
development.
4. “Means of implications”, covering financial resources and mechanisms, transfer of
environmentally sound technologies, promotion of education, public awareness and
training, national and international arrangements, instruments, mechanisms and
information for decision-making (UNDESA).
Considered as a whole, the Agenda 21 accepts that all life forms on the planet are integral, and
aims to maintain a universal partnership that involves governments and non-governmental
institutions on national and international levels, to fulfill sustainable development.
Ten years after the Rio Summit, the second Earth Summit was held in South Africa,
Johannesburg, in 2002. In that summit, the international initiatives, which aimed to

implement principles of sustainability, were considered as unsuccessful. However, owing
to the summits, the environmental issues gained prominence and, most importantly, the
business world and corporations were accepted as crucial stakeholders in maintaining
sustainable development (Brueckner and Pforr, 2011). There were two substantial features
of the summit. The first one is United Nations’s (UN) Secretary-General Kofi Annan’s
request to the business world to act, and the second one is the determination of 220
creative international collaborations for sustainable development (Gardiner et al., 2003).
Accepting business as one of the integral stakeholders of sustainable development led to
an increase in the interest of business stakeholders in the requirement of sustainability;
hence, corporations started to place sustainability on their agendas.
In essence, sustainability and sustainable development is a broad concept that includes all
who live on the earth, and, in this framework, we may affirm sustainable development is
embraced as a miracle solution to the problems of environmental, social and economic
crises. On the other hand, as a concept, sustainable development is inherently vague and
ambiguous. The vagueness of the concept stems from the expected role of economic
growth and different types of economics that sustainability necessitates (Springett, 2003).
In addition, “for how long”, “at what level of human appropriation”, “for whom”, “under what
condition” and “sustainable development for what” are the main questions that need to be
discussed to be sustainable (Luke, 1995). Having ambiguous theoretical basis,
disregarding structural forces that result in environmental problems, focusing on achieving

consensus among fractious social groups that disable effective implementation are
presented as some of the other criticisms of the concept (Sneddon, 2000).
Although there is an intensive discussion about the sustainable development as mentioned
above, sustainable development is a paramount goal for securing life on earth, and this
goal necessitates dealing with this concept at the international, national and corporate
levels as a whole. Corporations are important elements of national and global economies,
ecology and society, for that reason they could positively or negatively affect the
sustainability of the world. Hence, reporting firm’s impact enables measuring, tracing and,
most importantly, managing these effects in parallel with sustainability purpose. In this
perspective, as accounting is an information system which reports firms’ operation results
and makes it possible to manage their effects, it is an important part of the discussion about
sustainable development and its reflection on corporate level, namely, corporate
sustainability.
Corporate sustainability
Corporations could create serious economic, social and environmental problems while
performing their jobs to satisfy their stakeholders’ needs. However, applying sustainable
development approach in corporations refers to minimizing these effects of firms to secure
life on earth. Achieving the goal necessitates internalizing the management of these risks’
effects as a part of corporate strategy. In this context, there is an intimate link between
sustainable development and corporate sustainability. Especially, increasingly observable
effects of business operations on the environment on a global scale necessitate businesses
to consider sustainable development as an issue, similar to the governments (Jones,
2010a, 2010b). Customers and other stakeholders attach increasing importance on the
environmental and social effects of the goods and services they consume, and they want
to know how these products contribute to the community (Closs et al., 2011; ACCA, 2008).
Energy and environment, relationships with customers and suppliers, benefit to workers or
contribution to society are some of the issues that people are curious about, on which the
traditional corporate reporting system is not able to generate the information needed. To
create shareholder value, national and international companies are endeavoring to develop
new sustainable organizations that are socially and environmentally responsible (Closs
et al., 2011). This institutional struggle of the firms has also contributed to the progress of
nations in sustainable development, a point that is emphasized at the Rio Summit.

(Isaksson and Steimle, 2009). The fact that the biggest firms in the world control 25 per cent
of the world’s economic output attaches even greater importance to the role of the
corporations (Gardiner et al., 2003), and it is obvious that sustainable development is
almost impossible to realize without their contribution (Isaksson and Steimle, 2009). This
point is also reflected in the agenda of the Rio⫹20 Summit to be held in 2012 (UN, 2012).
Multinational corporations can be seen as particularly significant players in the
configuration of decision-making in purchasing, production and investment decisions, and
technological advancement in today’s world. This also creates an effect that can be
expressed as a chain reaction, in which the economic power and the fields of activity of the
companies expands, leading to an increase in their impact on the society and the
environment, resulting in the emergence of a demand on the part of the society for
the companies to bear more responsibility. The sources of this demand include a wide
range of interested parties, including national governments, consumers, non-governmental
organizations and also investors (Gardiner et al., 2003). This group forces the companies
to not only focus on financial success but also on the environment and the society
(Setthasakko, 2009). For this reason, and due to the internal and external pressures, many
companies express their commitment to employ sustainability principles in their operations
(Searcy, 2011).
As mentioned before, in the widest sense, sustainability is a concept that highlights the
protection of the abilities of future generations to meet their own needs, without comprising
the satisfaction of the needs of today’s people. In the economic life, each supplier,
manufacturer or merchant, while carrying out their normal activities, is also capable of
creating negative effects on ecological and social systems. Therefore, companies should
contribute to sustainable development through social and environmental initiatives, in all
steps of their supply chain, from the acquisition and then transformation of raw materials
into the finished products, to the delivery to the final customer. The modern production
process creates environmental impacts that extend far beyond the geographic boundaries
and time. Hence, corporations need to consider a holistic approach and a timeless
perspective while evaluating the environmental and social results of their operation.
Focusing only on the economic results is a narrow and meager approach in the creation of
organizations with environmental responsibility and green supply chains (Setthasakko,
2009). In other words, enterprises should ensure long-term economic performance for
sustainability, and it is only possible if they avoid short-term actions that create negative
social and environmental effects (Porter and Kramer, 2006).
Sustainable development is a strategy that is based on eco-efficiency and contains all the
states, especially developing countries, and creates the conditions for innovative and
creative solutions; hence, the concept of corporate sustainability, in line with this strategy,
can be defined in different ways. In this context, given that sustainable development
requires a worldwide holistic strategy, corporate sustainability necessitates corporations to
compete not only in the areas of image, power, speed and packaging but also in the
reduction of environmental damages related to consumption, energy use, distribution
costs, erosion of soil, air pollution and so on. Corporate sustainability is essentially a pursuit
for aligning the products and services with the stakeholders, and thus creates economic,
social and environmental value. From the shareholders’ viewpoint, the meaning of
corporate sustainability is a management approach for creation of long-term shareholder
value through the management of risks and opportunities that emerge as a result of the
needs of economic, social and environmental development. The corporate sustainability
movement, in essence, is the recognition of business as a global partner in sustainable
development. In this partnership, the business is expected to create wide social value by
supporting the improvement of health conditions and human rights, regional development,
fair globalization, the development of technologies that reduce greenhouse gas emissions
and the implementation of effective environmental risk management systems (CSR Quest
Corporate, 2011). The idea of corporate sustainability acknowledges that corporate growth

and profitability are important for business, while they proceed in accordance with social
objectives such as environmental protection, social equality, justice and economic
development. From this perspective, corporate sustainability is a dynamic concept based
on growth and profitability model, and evolves as an alternative to the traditional
management approach (Wilson, 2003). The reason for taking corporate sustainability as a
dynamic concept is that the aspects and priorities that firms focus on are constantly
changing overtime. This constant change is mainly due to the following three reasons:
1. impact of internal and external factors on business resources, and these factors
include:
legal regulations;
political circumstances;
emergence of new rivals; or
changes in senior management positions.
2. constant change in the rights, priorities and power of the major stakeholders.
3. result of the increasing complexity of business activities over time (Asif et al., 2011).
In the light of these changes, corporate sustainability is shaped by the elements that are
borrowed from sustainable development, corporate social responsibility, stakeholder

theory and corporate accountability theory (Wilson, 2003).
The concept of sustainable development incorporates economic, social and environmental
aspects into corporate sustainability. These multiple perspectives emphasize that, in addition
to economic performance, environmental and social performances of enterprises should be
taken into account as accomplishment indicators in evaluation of business performance,
thus expanding the scope of business performance and highlighting new areas to focus on
in the measurement of performance. Furthermore, such a multidimensional perspective
contributes to corporate sustainability by producing common targets for the companies,
governments and non-governmental organizations through the concepts of ecological,
social and economic sustainability (Wilson, 2003). In the traditional literature on strategy
and management, corporate sustainability refers to economic growth and long-term
profitability of businesses. The basic idea behind this assumption is that, in line with the
interests of the shareholders, enterprises pursue their activities with the aim of maximizing
their shareholder value. For this purpose, increasing profitability necessitates the
enhancement of consumption of the firm’s products and services (Linnenluecke, 2009).
In general terms, the concept of corporate social responsibility is related to the role of firms
within the society, and it stipulates that it is an inevitable ethical responsibility for business
managers not only to protect the interest of the shareholders, or their self-interest, but also
that of the society in general (Wilson, 2003). The corporate social responsibility contributes
to corporate sustainability by examining ethically why business managers are obliged to
respect the needs of society (Wilson, 2003). In other words, if sustainable development is
generally regarded in society as significant, companies also have an ethical responsibility
to assist the community in realizing this objective (Wilson, 2003).
Another theory related to corporate sustainability is the stakeholder theory. Stakeholder
refers to persons or institutions that are affected by the actions or inactions of businesses
in the past, present and future. These stakeholders would be internal actors, such as
business owners, managers or employees, or external ones, such as suppliers, customers,
society and government (Durden, 2008; Bhattacharyya, 2010). According to the
stakeholder theory, corporations have a responsibility not only toward their shareholders
but also, and primarily, toward customers, suppliers, employees and society. A variety of
reasons, such as ensuring the sustainability of resources and obeying the legal regulations,
require the demands of these parties to be met (Salzmann et al., 2005; Asif, et al., 2011).

Why companies should work toward the goal of sustainability is the question that the
stakeholder theory addresses; according to the theory, when companies operate toward
the target of corporate sustainability, it would be possible for the firms to acquire best
results for themselves and to produce benefits for their stakeholders (Wilson, 2003). One of
the theories that contribute to the evolution of corporate sustainability is the corporate
accountability theory, which defines the structure of the relationship between the business
managers and the rest of the society (Wilson, 2003).
The main priority of business in market economies is to maximize their shareholders’ value
within the legal and related arrangements that are related to social and environmental issues.
Therefore, enterprises focus on the relationships with their stakeholders, and competitive
strategies that aim to improve these connections (CSR Quest, A Multi-Dimensional, 2011
[. . .]). Globalization, continuous innovations and knowledge-intensive customers conduce
to a more dynamic and complex business environment, in which the companies strive to
develop competitive strategies (Paranjape et al., 2006). It is acknowledged by most of the
companies nowadays that the key to success depends on the stakeholders and resources
obtained from them, as well as the shareholders. For the business, the challenge is to
harmonize the firm’s operations with sustainability through more complex solutions beyond
the reduction of environmental pollution (Isaksson and Steimle, 2009). Effective global
sustainability business strategies are expected to produce positive results in various areas:
strengthening people and communities worldwide by ensuring improved working

conditions in compliance with legal regulations; and
enhancing long-term global viability by both securing limited resources such as water
and raw materials and reducing waste.
It is also envisaged that focusing on economic, social and environmental performances

would improve the efficiency and profitability of businesses in the long term (Closs et al.,
2011).
The equivalent of sustainability at the level of business is corporate sustainability, which
refers to an evolving model of corporate management that emerged as an alternative to the
traditional model of short-term value maximization. The conventional management model is
based on growth and profit maximization (Signitzer and Prexl, 2007; Wilson, 2003). The new
model not only accepts that growth and profitability are important but also necessitates that
corporations should attempt more seriously to achieve social objectives, such as
environmental protection, social equity and justice and economic development (Wilson,
2003). Corporations are just cogs in the machine, and there are reciprocal relationships
among all parts of the machine. Due to this interrelation, a company aiming to maintain its
existence would not avoid considering the value system of the community, while it is also
necessary for the society to be aware of the company’s diligence (Jones, 2010a, 2010b).
Stakeholders generally are informed of all important business operating results through
reports, and the most prominent one is the financial report. Financial reports are the most
visible accounting products, and these reports provide the most important means for a
corporation to communicate its operating results to its stakeholders, although they report
results only in financial terms. Nevertheless, as mentioned above, sustainability has
economic, social and environmental dimensions, and, in accordance with these
dimensions, a corporation should report not only economic consequences of its business
activities, but also their social and environmental aspects. Corporate sustainability reports
meet these needs by involving the information related to the attention devoted to the
environment and society while achieving economic results.
Corporate sustainability reporting

Sustainable development is a vital goal to provide continuance of the future of all living
creatures on earth, and governments make policies to promote and legitimate action to
achieve this aim. Because firms are the engines of economic growth, they are affected by

and have an important role in implementation of the government’s sustainable development
policy. To put it differently, governments have a significant influence on companies
operations via standards and regulations related to sustainable development. On the other
hand, economic, social and environmental consequences of firms operations would affect
a country’s sustainable development positively or negatively. For that reason, tracing firms’
operations effects on countries and world economy is necessary to understand and
manage them in line with sustainable development. Because accounting reports the result
of companies’ operations as an information system, it would guide toward sustainable
development and corporate sustainability; however, accounting focuses only on financial
performance indicators. For accounting, eliminating its deficiency in monitoring
non-financial performance results and also acquiring new abilities and developing reports
are needed to support its guidance.
Managerial and financial accounting reports are the two major outputs of accounting
information system. Managerial accounting reports are internal reports prepared for
managers for the planning and controlling of business operations. It is possible to change
the content of these reports according to the needs of the managers in decision-making.
However, financial accounting reports are prepared for communicating the firm’s operating
results to external users, such as investors, financial analysts, creditors and governmental
regulatory agencies. As the reports serve various external users, they have to be
multipurpose and their contents are certain (Sisaye, 2011a, 2011b).

The critiques related to sustainable development are not limited to the aforementioned, and
the vagueness of sustainable development would affect all the related areas of the concept
used. At the organizational level, the reflection of sustainable development is corporate
sustainability, and being a sustainable corporation refers to recognizing economic,
environmental and social results of companies’ activities as performance indicator to
increase long-term shareholder value. However, the way to integrate these dimensions and
the recipe to assess the social and environmental performance are some of the difficult
problems that need to be overcome by accountants (Banerjee, 2002). In addition, as a
focal information system for firms, it is expected from accounting to intervene and to reply
or resolve some of these important questions. However, having a narrow legal perspective
on the boundary of corporate activities (the legal entity concept); typically adopting a set
of implicit assumptions about the primacy and desirability of the conventional business
agenda; drawing specific attention to the defects of accruals, consistency and prudence
(or conservatism) conventions in terms of their use for evaluation of corporate activities
which have ecological impacts and using money as a common unit of account
(Schaltegger and Burritt, 2010) are the some of the deficiencies that financial accounting
has. In addition to these criticisms, cost and management accounting has also be criticized
because of the arbitrary use of cost allocations, the dominance of financial accounting
rules, a narrow focus on manufacturing costs and a focus on short-term decisions rather
than strategic decisions (Schaltegger and Burritt, 2010). Both the deficiencies of
accounting and the vague concept of sustainable development would force accountants to
serve as a guide. For that reason, accounting should be concurrently transformed to be
capable to meet the need, and also there is a necessity to specify what sustainable
development is for the corporations to transfer it into practice.
Non-financial reporting is now widely accepted as the means for corporate sustainability
reporting, and it is conceptualized as “triple bottom line (TBL) reporting” (Durden, 2008;
Asif et al., 2011; Shrivastava, 1995; Herzig and Schaltegger, 2011). This concept briefly
refers to the necessity to take into consideration and report on the social, environmental
and economic impacts of business activities as a whole, and it is symbolized in the
literature by “triple P” as for people, planet and profit. According to the literature, a firm
produces more value over the long term, confronts fewer risks and obtains competitive
advantage if it takes these impacts into consideration as compared to a firm that focuses
only on profit (Asif et al., 2011; Shrivastava, 1995; Herzig and Schaltegger, 2011; Porter,

2003). Although TBL reporting that involves economic, social and environmental reporting
is part of an external reporting system (Sisaye, 2011a, 2011b; Gray, 2005), TBL reporting
and financial accounting reporting systems emerged essentially from different world views
(Gray, 2005). The moral foundations of financial reporting is based on the liberal economic
democracy of the old times, while its economic roots build on the ability to serve the legal
and administrative regulations and those possessing economic power. Financial
accounting reports constitute a major element of financial capitalism, as they provide
valuable information required by shareholders and other financial market actors to protect
their interests. These reports also serve the state in its efforts to regulate the organization
of economic collaboration and maintain the functioning of the liberal economic order. If the
contribution of financial reporting to economy and society is considered as a whole, it is the
shareholders that acquire maximum benefit from financial reporting. One of the main
reasons of this inference is that these participants invest their funds in a more productive
and economically more desirable way with the help of the financial accounting reports. By
this way, shareholders and the other participants are supposed to promote economic
growth, as the decisions they take enable the development and innovation of “better”
economic activities by contributing competition (Gray, 2005).
Current accounting measurement systems that produce financial accounting reports
based on the point of view of financial markets prioritize profit over everything else. Social
and environmental accounting and sustainability accounting, on the other hand, are
alternative accounting proposals that take into consideration those factors that are
accepted as external, and excluded from the process of producing accounting information.
While these proposals are still disputed in the literature, externalities are accepted as the
center of the accounting system, and also the costs of the economic success are explained
in environmental and social terms (Gray, 2005).
The origins of the TBL reporting rest on Elkington’s approach, which argues that
corporations have environmental, social and economic responsibilities and that these
responsibilities need to be balanced (Gray, 2005). While economic information is regarded
as periodical reporting, information on social and environmental sustainability is
considered as voluntary disclosure. This information, depending on the preferences of the
enterprises, could be involved in the footnotes, appendices or annexes of the annual
reports (Sisaye, 2011a, 2011b). The reports containing sustainability indicators could assist
companies in achieving sustainability goals, as they include the results of economic, social
and environmental management practices. Approaching financial accounting reporting
system with the TBL perspective enables the managers to use reports as an instrument for
balancing economic growth with social and environmental needs. Financial reports
indicate a firm’s profitability created by using, protecting and managing the sources and
assets of the enterprise efficiently, and corporations are required to prepare these reports.
On the other hand, environmental and ecological reports are annual or seen as
complementary ones (Sisaye, 2011a, 2011b). Although corporate sustainability reports are
voluntarily submitted and disclosed, according to a research conducted in 2005, 81 per
cent of senior executives at large American businesses admit that sustainability
implications are very important to a firm’s strategic mission. According to these managers,
social and environmental responsibilities affect the corporation’s financial performances
(Sisaye, 2011a, 2011b; White, 2005). Non-financial reporting started to gain attention in the
early 1990s, and with the increased community concern about environmental information,
the reports began to be monitored with interest by a large section of stakeholders (Das
et al., 2008). Hence, while the number of enterprises that report its sustainability was ⬍ 100
in 1993, this number increased to 1500 by 2005 and 68 per cent of these firms are the top
companies in the Fortune 500 (Sisaye, 2011a, 2011b; White, 2005).
A corporate sustainability report presents an organization’s information related to its
economic, environmental and social performances, and from this aspect, the reports imply
the commitment of the company management to managing environmental resources with

a sense of responsibility, and also contain information related to the company’s future
social and environmental strategies. These non-financial reports are considered to be
reflections of institutional behavior, and being followed more and more by investors,
customers, government and employees, they have become a medium of communication
between the company and its stakeholders (Sisaye, 2011a, 2011b; White, 2005).
In sustainability reporting, sustainability indicators related to social and environmental
issues and the content of the reports are provided voluntarily by the companies (Sisaye,
2011a, 2011b; O’Dwyer, 2003). For that reason, the information that included in the reports
and the content of the sustainability reports seem subjective and highly dependent on
the type of social and environmental problems that the companies are addressing in the
community. One of the reasons behind the subjectivity of indicators may be the
complexities involved in the calculations for sustainability reporting (Haigh and Shapiro,
2011). In addition to complexity of calculation, having no specific accounting standards to
be implemented in bookkeeping and reporting social and environmental issues related to
a firm’s activities also create challenges for accountants. Therefore, sustainability
accounting standards, and national and sectoral sustainability reporting standards should
be developed. The standards would shed light on the challenges that are the community’s
need to evaluate the implicit consequences of firms’ activities. The standards also guide
accountants in sustainability reporting. According to Roca and Searcy (2012), corporations
have different stakeholders and different countries have different characteristics such as
political systems, financial systems, education and labor systems and cultural systems. All
differences may influence the decision of sustainability reporting indicators. Having
national and sectoral sustainability reporting standards are also important in substantial
sustainable development implications in corporations and countries. The reporting
standards may also be enabled to improve sustainability ratios as a convenient instrument
to assess a company’s sustainability situation, to use as a planning and decision-making
measurement and to compare companies. In other words, the sustainability ratios and
comprehensive sustainability reports that simultaneously involve financial, social and
environmental aspects of companies’ activities can be substituted for traditional financial
ratios and reports. As sustainability reports are progressively prepared by organizations
and increasingly pursued by stakeholders, this means a number of new responsibilities for
accountants and accounting, due to their responsibility in preparing the reports, and their
position with regard to the company and its stakeholders.
The role of accounting and accountants in sustainability

It is asserted that corporate sustainability reports play principal role in measurement and
evaluation of performance for targets and implementation of sustainable development and
corporate sustainability. The reports indicate the current situation, indicators and activities
of companies in the direction of corporate sustainability and, implicitly, sustainable
development. In essence, financial and non-financial reports are used for evaluating the
impact of business operations and decisions made by their managers. One of the main
functions of accounting information system is financial reporting, and this report has
prominence in the conventional reporting system. In the TBL reporting that includes
non-financial indicators and is accepted as sustainability reporting, environmental, social
and economic (financial) results are equally important. In an environment where
environmental, social and financial elements interact with each other and the company is
located, the corporate sustainability, success and adaptation of the companies necessitate
environmental and social, as well as financial, results of their operations to be available for
reporting and measuring. So as to manage and pursue any issue related to business, it has
to be measurable. One of the basic measurement systems in business is accounting, as it
enables the evaluation of business operations and their results. Nevertheless, the structure
of conventional accountings systems would be limited in reflecting the activities of
contemporary business models and their consequences (Jones, 2010a, 2010b). For that
reason, accounting needs to be concurrently transformed to be capable to meet the

requirements. The capitalist point of view, business-oriented, commitment to neo-classical
economy, the use of quantitative measurement system and monetary terms and technical
accounting practices are some of the reasons for the insufficiency of the traditional
accounting system in measuring the non-financial results of the effects of business
activities. Considering the development of accounting, we may conclude that the
management, shareholders and investors constitute the focal point of accounting, while
profit is the major indicator of corporate performance. In addition to these, conventional
accounting is only bookkeeping and is interested in the costs of the business operations
which impact on the company’s activities in determining the costs of the goods and
services. At the basis of this perspective is an assumption regarding the inputs to the
process whereby goods and services are produced and profit is created. In this process,
capital and finance are traditionally considered as inputs, and finance is assumed to be
limited. Whereas today, the inputs of the process are environmental resources, people and
finance, and environmental resources are assumed to be limited, while human resource is
variable and financial resources are unlimited. Furthermore, it is also inevitable to consider
the social and environmental impacts of the process on the stakeholders, in addition to the
outputs of the process, i.e. profits, goods and services (Aras and Crowther, 2009b; Aras
and Crowther, 2007).
Under the circumstances that organizations are evolving in line with the needs of the time,
it will be obvious that improvement and innovations in accounting are required to

accompany this evolution to meet the challenges that cannot be resolved with the existing
set of rules. In this context, accounting information systems and accountants need to evolve to
respond to sustainability by adapting its traditional characteristics and developing new abilities.
In this respect, the main contributions of accounting in sustainability can be outlined as below:
developing sustainability accounting standards, and national and sectoral
sustainability reporting standards;
establishing the connection between non-financial and financial values of corporations;
reporting the results and interactions of corporations’ activities related to the planet and
the humankind;
making corporate sustainability traceable and manageable; and
having a role in informing and educating related parties.
Because there is a reciprocal relationship between the contributions above, each of them
should be considered as a fostering factor to each other. Among the factors, developing
sustainability accounting standards and sustainability reporting standards would be
accepted as the most important key concept, as it enables the implementation of
sustainable development at the corporate level.
The managers, capital markets, customers and employees need reliable and useful
information, which are products of accounting information systems, to direct and protect
their interests (Aras and Crowther, 2009a, 2009b). The main product of accounting systems
used by both internal and external stakeholders to evaluate the result of a corporation’s
activities is sustainability reports. Because the reports are key elements in tracing
sustainability in corporate practices, the information that is included in the reports and the
content of the reports are crucial. As aforementioned in the corporate sustainability
reporting section, one of the reasons that would affect the information presented in the
reports is the complexities involved in the calculations for sustainability reporting (Haigh
and Shapiro, 2011). Having sustainability-specific accounting and reporting standards may
enable to overcome complexity of the calculation and guide accountants in sustainability
reporting. The reporting standards may also allow improving sustainability ratios as a
convenient instrument to assess a company’s sustainability situation, to use as a planning
and decision-making measurement and to compare companies. With the advancement of

sustainability reporting, the sustainability ratios and comprehensive sustainability can be
substituted for traditional financial ratios and reports.
Considering its reporting function, accounting is required to respond to the stakeholders of
the company, particularly its shareholders, regarding the financial performance of the
entity. The information produced by the accounting serves as the basis for the economic
decision-making. In this way, accounting constitutes an organizational culture and
contributes to the success and reliability of businesses. From the perspective of the
community, accounting is part of broader social and political factors, and the information it
produces serves for the depiction of the past and the present (Lodhia, 2003). Traditionally,
this picture has been drawn by focusing on the financial performance and explanations,
while the non-financial actions and information have significant influence on a firm’s value.
The role of accounting professions is to assure the identification and quantification of these
non-financial impacts, indicating thereby the points that managers should pay attention to
increase the value and transparency of the company (IMA, 2008).
Through the sustainability accounting and reporting standards, accounting has become
able to produce the information that represent the interaction between the planet and the
products of humankind, such as the factory, corporations, goods and services (Sisaye and
Birnberg, 2010; ACCA, 2008; Aras and Crowther, 2009b). The decisions of the business
managers produce social, environmental and economic effects, and the community has to
bear the weight of these impacts. The economic effects of such decisions are already
available to be traced by traditional accounting practices. In addition to that, enabling the
tracing of the costs of decision with environmental and social consequences through
accounting would enhance the accountability of the firms with regard to the implications
and costs of their activities. Accountability, in turn, allows the prediction of negative social
and environmental effects beforehand, and avoiding or minimizing their consequences.
The functioning of this mechanism, however, requires the restructuring of accounting
information systems in corporations so as to pursue that kind of costs.
Rendering sustainability traceable through various parameters by the accounting
professional provides the decision-makers and stakeholders with more extensive data to
evaluate the company, which, in turn, contribute to the transparency of the company and
the improvement of relations with the stakeholders. (ACCA, 2009; IFAC, 2006). As a body
of rules regarding the responsibilities of companies toward the society, accounting plays a
significant role in corporate sustainability and sustainable development. This role is further
strengthened by the fact that accounting information forms the basis of the decisions of the
management. (Saravanamuthu, 2004). As corporate sustainability is rendered measurable
through accounting, it allows the management of sustainability by including sustainability
data in the process of taking decisions that would have economic, social and
environmental consequences.
The role of accounting in sustainability is beyond the internal processes mentioned above.
Through its reporting function, accounting serves as an instrument for disclosing financial
and non-financial information, such as social and environmental, in annual reports and
other media (Lodhia, 2003; ACCA, 2008; Jones, 2010a, 2010b). In other words, when
sustainability is taken as a view toward balancing the future and current generations with
regard to social, economic and natural factors, accountants may play a role in the
realization of this idea in companies, by contributing to internal processes through their
ability for reporting, auditing and management, and by informing the stakeholders (Lodhia,
2003; Jones, 2010a, 2010b). The mission of professional accountants in sustainability is, in
essence, establishing the connection among non-financial reporting, financial value and
sustainability value, and assisting in sustainability operations (IMA, 2008). They accomplish
this mission through their responsibility in creating, improving and applying the
infrastructures of sustainability. They also contribute to the configuration and
implementation of arrangements required by changes in laws and regulations.

Sustainability is a multidisciplinary field, and the accounting professionals are assigned
roles in informing and educating related parties due to the prominent role they play in
almost all processes of the company. Besides, accountants may also be effective in the
development of innovative ideas to support better sustainability practices, and in the
structuring of new arrangements, as well as in reporting and building trust (ICAEW, 2004).
Accountants may also contribute in:
risk identification and management;
development of a framework for the production of reliable financial and non-financial
information;
promotion of policies for determining necessity to report;
preparation and implementation of sustainability implication plans; and
management of independent audit and review processes (ACCA, 2008; Ballou et al.,
2011; Jones, 2010a; 2010b; AICPA et al., 2010).
Corporate sustainability reports that are prepared by the accounting departments both
represent the holistic picture of the company’s sustainability activities and demonstrate
how and to what extent the company contributes to sustainable development (Herzig and
Schaltegger, 2011). Corporations are expected to go beyond traditional financial reporting,
which reflects past activities and decisions and the historical data of the firms, and to report
the future risks, opportunities and strategy related to sustainability (ACCA, 2008).
Accounting departments may be effective in the configuration and preparation of
mandatory and voluntary sustainability reports in response to new reporting needs due to
changes in the level and nature of the activities of the firms and legal amendments (ACCA,
2008). So as to create long-term value, it is necessary to assess the future risks, and modify
the decisions and applications accordingly (Closs et al., 2011). This could allow a balance
to be found between the economic goals of organizations, and social and environmental
needs. Because the future impacts of decisions made today are basically the issues of
sustainability, sustainability reporting that involves economic, social and environmental
impacts of business activities provides information on their commitments regarding
responsible use of environmental resources, and their environmental and social strategies
for the future (Aras and Crowther, 2008; Sisaye, 2011a, 2011b). But, acquiring the
information depends on the contents of the reports, and accounting professionals are in a
position to enable the accurate measurement, verification and reporting of financial and
non-financial information. This contribution would be particularly valuable in contexts where
there is no special legal or institutional framework for reporting, or there are difficulties in
gathering the relevant social and environmental information and integrating them into
processes of information flow (ACCA, 2008; Jones, 2010a, 2010b).
The reports that are prepared by accounting information system, and provide data on the
pollution, global warming and sustainability of natural resources produced by the activities
of the firms, are useful in determining the costs of the activities in these areas and their
effects on financial performance. When used for internal purposes, these reports would
assist managers in planning and conducting business operations, while they may also be
a means to motivate employees toward being responsible citizens. When presented to
external stakeholders, however, these reports that contain financial information could also
function as an instrument for developing the social and environmental awareness of the
stakeholders (Sisaye, 2011a, 2011b).
Sustainability reporting provides accounting professionals an opportunity for professional
development, as it requires an in-depth understanding of the complexities of social,
economic and environmental issues. This opportunity also requires long-term and
future-oriented accounting implementations and, due to its multidisciplinary character,
necessitates collaboration with other professional groups, such as economists, social and
environmental scientists, as well as the development of new qualitative and quantitative

skills (ACCA, 2008; Jones, 2010a, 2010b). Accountants, except for sustainability reporting,
could assist in the field of budgeting and strategy development; auditing; production;
measuring, monitoring and controlling of performance; accountability and governance and
standard development (Jones, 2010a, 2010b; ACCA, 2008).
At the level of national governments, the development and monitoring of sustainability
indexes have been mostly conducted by statisticians and economists. However,
accounting professionals would make a significant contribution to developing and
monitoring substantial sustainability standards. One of the fields that accountants add
value to is standardization of indicators that are used both within business units and among
states. They also contribute in monetary equivalent methods, risk management, balancing
the issues of governance and ethics standards within the political environment. In addition
to these, the skills of the accountants in finance and budgeting would be useful in
monitoring sustainability data that presents monetary indicators as part of sustainability
reporting of the state institutions (Jones, 2010a, 2010b; ACCA, 2008).
As abovementioned, sustainability and sustainable development present opportunities for
accountants to contribute to sustainability. However, the possible potential to contribute in
sustainability also produces challenges for accountants. These challenges result from the
fundamental elements of sustainability, such as the interactions of economic, social and
environmental issues, difference in generational timeframes and, hence, the complexity of
calculations. The interpretation of the relationship between business activities and their
economic, social and environmental effects and the determination, validation and
monitoring of strong sustainability indicators are some of the topics raised by this
challenge. Applying conventional accounting standards to sustainable development issues
could be regarded as an opportunity that incorporates new and specialized professional
fields for the accountants. Determining sustainability and welfare indicators is inherently
subjective, incorporating political dimensions, whereas accounting professionals are
regarded as representatives of objectivity (Jones, 2010a, 2010b). Overcoming the
difficulties and utilizing the opportunities requires training and support programs on
sustainability for accountants and businesses. Correlation between financial and
non-financial indicators; understanding mutual relationship between community,
environment and sustainable development; and developing long-term future-oriented
accounting practices together with those oriented to the past constitute some of the
subjects that need to be focused on (Jones, 2010a, 2010b).
Conclusions
The concept of sustainability has gained increased attention worldwide in the wake of the
declaration by The World Commission on Environment and Development, published under
the title “Our Common Future” in 1987, and also known as the Brundtland Report. The
sustainability approach has become a popular trend, as it has been used in many fields,
and it has gained different meanings in different fields. Sustainable development embodies
economic, social and environmental elements, as it requires that generations avoid
selfishness in meeting their needs and respect the right to life of future generations. The
problems such as the differences in the level of development among countries, leading to
differences in quality of life, global warming and environmental pollution have increased the
public interest in the subject.
After the declaration of the Brundtland Report, the second Earth Summit was held in
Johannesburg in 2002. In that summit, the role of businesses in the realization of
sustainability objectives was particularly emphasized. This emphasis has led the business
world to acknowledge the requirement for close monitoring and internalization of the issues
of sustainability and sustainable development. As significant actors in the social, economic
and ecologic community, corporations have responsibility in the creation of various
problems, and therefore, they are required to take part in their solution. Corporate
sustainability requires firms to question the raison d’être of business operations, who have

rights over their conduct and what should be the right balance between the shareholders
and other stakeholders and between their performances in economic, social, and
environmental spheres.
Business stakeholders are now questioning the social and environmental impacts of the
products and services they consume, and the consequences of the operations of the firms.
The companies usually inform their stakeholders through the means of reports. Financial
accounting reports that present only financial information are the prevailing type of reports,
and they are the major source of information for external stakeholders. However,
sustainability has non-financial dimensions, and the maintenance of corporate
sustainability in accordance with this approach requires the reporting of not only economic
consequences of business operations but also their social and environmental implications.
It is the corporate sustainability reports that meet this need and contain the data reflecting
the sensibility of the firms toward the society and the environment while conducting their
profit-oriented activities. As the corporate sustainability reports are being produced by a
growing number of companies, and are followed by more and more stakeholders,
accounting and its professionals are facing new responsibilities.
To realize the objective of sustainability and to enable its internalization and management
by firms, it needs to be rendered measurable and observable. Accounting information
system is one of the fundamental monitoring systems, structured to measure, observe and
evaluate the business activities and their results. Traditionally, this system is focused on
financial performance, designed to report profit. Sustainability, however, encompasses all
forms of life that share the world, regards them as mutually interrelated and aims to embody
a multidimensional perspective. To represent sustainability, with its social and
environmental components as well as the economic ones, accountants and accounting
need to develop further qualitative and quantitative skills. The role of accounting in
sustainability is the reflection of its fundamental functions and requires the development of
new skills. Reporting, managing and auditing are the fundamental functions of accounting
and accountants. In consideration of these functions, accounting is responsible for
reporting not only financial but also social and environmental information in annual reports
and informing the stakeholders through these reports and by other means of
communication, thus, supporting the determination, development and operation of the
mechanisms that constitute the infrastructure of sustainability. Determining which
information should be included in the firms sustainability reports of the firms, the provision
of the evidences needed to ensure the credibility of the information generated, and
supporting these processes and procedures and reporting them to the senior managers
are also among the fields where accounting professionals could play an active role. They
may also play a significant role in informing and educating those parties that require
relevant information, thanks to the interdisciplinary character of sustainability and their
capability to develop a comprehensive view of the firm as a whole. Accounting
professionals may also support the development of innovative ideas and the preparation of
new regulations for better sustainability practices, particularly in those areas related to
reporting and building trust.
Determination of the information that involved in the corporations’ sustainability report,
assurance of the information, supporting of these processes and procedures and reporting
to the management are also the responsibilities of accounting. Accountants may contribute
to informing and training the stakeholders, as sustainability is a multidisciplinary field and
accountants have the ability to evaluate the activities of the firm as a whole. Accounting
profession may support making regulations and arrangements and developing new ideas
related to the applications of better sustainability management.
In the light of issues discussed above, we may affirm that sustainable development is
embraced as a miracle solution to the problems of environmental, social and economic
crisis as a concept, but it is inherently vague and ambiguous. The expected role of
economic growth and different types of economics that sustainability necessitates would

be seen as the reasons of the vagueness of the concept (Springett, 2003). Furthermore,
there are also the main questions need to be discussed in order to be sustainable such as
“for how long”, “at what level of human appropriation”, “for whom”, “under what condition”
and “sustainable development for what” (Luke, 1995) and some criticism of the concept
about having ambiguous theoretical basis, disregarding structural forces that result in
environmental problems, focusing on achieving consensus among fractious social groups
disable effective implementation (Sneddon, 2000).
The arguments about sustainable development and the vagueness of the concept would
affect all the related areas of the concept used. Corporate sustainability is a reflection of
sustainable development at the organizational level, and being a sustainable corporation
refers to recognizing economic, environmental and social results of companies’ activities.
As a focal information system for firms, it is expected from accounting to integrate these
dimensions and the recipe to assess the social and environmental performance, but there
are some difficulties that need to be overcome by accountants (Banerjee, 2002). Although
accounting is seen as a media to intervene and to reply or resolve some of these important
questions, financial accounting has some deficiencies such as:
having a narrow legal perspective on the boundary of corporate activities (the legal
entity concept);
typically adopting a set of implicit assumptions about the primacy and desirability of
the conventional business agenda; and

drawing specific attention to the defects of accruals, consistency and prudence (or
conservatism) conventions in terms of their use for evaluation of corporate activities
which have ecological impacts and using money as a common unit of account
(Schaltegger and Burritt, 2010).
Additionally, cost and management accounting are also be criticized because of the
arbitrary use of cost allocations, the dominance of financial accounting rules, a narrow
focus on manufacturing costs and a focus on short-term decisions rather than strategic
decisions (Schaltegger and Burritt, 2010). The critiques related to accounting and the
vague concept of sustainable development would force accountants to serve as a guide.
For that reason, accounting needs to be concurrently transformed to be capable to meet
the need and also there is a necessity to specify what sustainable development is for the
corporations to transfer it into practice.
In this study, sustainability is accepted as the reflection of the sustainable development at
the level of companies. While corporate sustainability, in turn, encompasses all the units of
a firm together with all its stakeholders, this study is limited by accountants and accounting.
The purpose, in this regard, is to demonstrate the role and responsibilities, challenges and
also possible areas of contribution for accounting and accounting professionals in
sustainability. Accounting and accountants may contribute in sustainability through the
sustainability reporting and the accounting information that forms the decisions of the
management (Sisaye and Birnberg, 2010; ACCA, 2008; Aras and Crowther, 2009b; Lodhia,
2003). However, based on the literature survey, it can be said that there is lack of a
definition of the relationship between the sustainability concept and accounting, as well as
potential solutions to overcome the problems which create challenges for accounting and
accounting professionals. Therefore, the main contribution of this paper is to fill in the gap
in the accounting and sustainability literature by suggesting “certified sustainability
accountant” credential that is equipped with the core knowledge of environmental
engineering as a specialized profession to handle the technical accounting problem that is
related to sustainability. There is also a need for integrating sustainability accounting and
management within accounting education curriculum in business schools and professional
training programs given by the association of professional accountants. It is a vital step to
accomplish in both the educational programs to provide a substantial sustainability
implementation basis. The step would ensure the needed skills of accountants in pre- and

post-occupational positions. In this study, the relationship between the sustainability and
accounting is discussed by conducting an in-depth literature review for further studies. It is
expected that the results of the paper will appear in several implications among accounting
professionals, the firm that they work in, the association of professional accountants,
education institutions and all the stakeholders of accounting, especially in countries with
the relatively early stage of sustainability practices. First, the paper proposes the
standardization of sustainability accounting and reporting. In addition, the paper calls for a
“certified sustainability accountant” credential that is equipped with the core knowledge of
environmental engineering as a specialized profession to handle the technical accounting
problem that is related to sustainability. In addition, integrating sustainability accounting
and management within accounting education curriculum in business schools and
professional training programs given by the association of professional accountants are the
issues that the paper calls for. The paper may give insight into the aforementioned
stakeholders of accounting in reformation of accounting toward sustainability. It would also
guide accountants to comprehend the new expected roles and responsibilities from them.
For further research, the contribution and the problems that are faced by accounting and
accountants regarding sustainability could be analyzed by making comparative and
empirical analysis of business organizations or the sectors in which they are operating.
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About the author

Arzu Özsözgün Çalışkan has received her PhD from Marmara University Social Sciences
Institute. She is instructor at Yildiz Technical University. Her teaching and research areas
include financial, cost and managerial accounting; financial markets; financial
management; and corporate social responsibility. Arzu Özsözgün Çalışkan is the
corresponding author and can be contacted at: aozsozgun@gmail.com
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How accounting and accountants may contribute in sustainability?

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Arzu Özsözgün Çalışkan Abstract

VOL. 10 NO. 2 2014 SOCIAL RESPONSIBILITY JOURNAL PAGE 247

Sustainability and sustainable development

PAGE 248 SOCIAL RESPONSIBILITY JOURNAL VOL. 10 NO. 2 2014

compromise between them (Hopwood et al., 2005).

VOL. 10 NO. 2 2014 SOCIAL RESPONSIBILITY JOURNAL PAGE 249

In this context, environment, economy and society are components of sustainable

1. “Social and economic dimensions”, involving international collaboration, struggle

PAGE 250 SOCIAL RESPONSIBILITY JOURNAL VOL. 10 NO. 2 2014

disregarding structural forces that result in environmental problems, focusing on achieving

VOL. 10 NO. 2 2014 SOCIAL RESPONSIBILITY JOURNAL PAGE 251

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borrowed from sustainable development, corporate social responsibility, stakeholder

VOL. 10 NO. 2 2014 SOCIAL RESPONSIBILITY JOURNAL PAGE 253

 strengthening people and communities worldwide by ensuring improved working

It is also envisaged that focusing on economic, social and environmental performances

Corporate sustainability reporting

PAGE 254 SOCIAL RESPONSIBILITY JOURNAL VOL. 10 NO. 2 2014

multipurpose and their contents are certain (Sisaye, 2011a, 2011b).

VOL. 10 NO. 2 2014 SOCIAL RESPONSIBILITY JOURNAL PAGE 255

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The role of accounting and accountants in sustainability

VOL. 10 NO. 2 2014 SOCIAL RESPONSIBILITY JOURNAL PAGE 257

it will be obvious that improvement and innovations in accounting are required to

PAGE 258 SOCIAL RESPONSIBILITY JOURNAL VOL. 10 NO. 2 2014

VOL. 10 NO. 2 2014 SOCIAL RESPONSIBILITY JOURNAL PAGE 259

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VOL. 10 NO. 2 2014 SOCIAL RESPONSIBILITY JOURNAL PAGE 261

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the conventional business agenda; and

VOL. 10 NO. 2 2014 SOCIAL RESPONSIBILITY JOURNAL PAGE 263

ACCA (Association of Chartered Certified Accountants) (2009), “Accounting: Sustainability Briefing

Aras, G. and Crowther, D. (2009a), “Corporate sustainability reporting: a study in disingenuity?”,

Aras, G. and Crowther, D. (2009b), “Making sustainable development sustainable”, Management

PAGE 264 SOCIAL RESPONSIBILITY JOURNAL VOL. 10 NO. 2 2014

Durden, C. (2008), “Towards a socially responsible management control system”, Accounting,

Herzig, C. and Schaltegger, S. (2011), “Corporate sustainability reporting: an overview”, in Bennett, M.

IMA (Institute of Management Accountants) (2008), “The evolution of accountability-sustainability

VOL. 10 NO. 2 2014 SOCIAL RESPONSIBILITY JOURNAL PAGE 265

Lodhia, S.K. (2003), “Accountants’ responses to environmental agenda in a developing nation: an

Luke, T. (1995), “Sustainable development as a power/knowledge system: the problem of

Pisani, J.A.D. (2006), “Sustainable development-historical roots of the concept”, Environmental

Saravanamuthu, K. (2004), “What is measured counts: harmonized corporate reporting and

Searcy, C. (2011), “Updating corporate sustainability performance measurement systems”, Measuring

Setthasakko, W. (2009), “Barriers to implementing corporate environmental responsibility in Thailand:

PAGE 266 SOCIAL RESPONSIBILITY JOURNAL VOL. 10 NO. 2 2014

Sisaye, S. (2011a), “Ecological systems approaches to sustainability and organizational development:

Sisaye, S. (2011b), “Ecological systems approaches to sustainability and organizational development:

Springett, D. (2003), “Business conceptions of sustainable development: a perspective from critical

About the author

To purchase reprints of this article please e-mail: reprints@emeraldinsight.com

VOL. 10 NO. 2 2014 SOCIAL RESPONSIBILITY JOURNAL PAGE 267

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strengthening people and communities worldwide by ensuring improved working