THE IMPORTANCE OF CREATING WEALTH WITH INTEGRITY

 The primary function of business entities is to create value for their owners, investors,
and other stakeholders.
 This value is not only measured by the wealth which the business creates but also by the
public trust and investor confidence that is earned over time.
 The reliability of financial reports and the quality of audit reports are essential to
maintaining trust and confidence among all stakeholders

OVER-ALL SUSTAINABILITY REPORTING EFFORT INCLUDES:

 Public Trust and Investor Confidence in public financial information

 Financial Reporting
 Internal Control Reporting

INVESTOR CONFIDENCE AND KPIs

 Investor confidence is a key driver of economic growth, prosperity and financial stability
 The key to creating usable financial KPI´s is to offer stakeholders sufficient measures to
assess sustainable performance
 Determining Financial KPI´s using Environmental Data
 Determining Financial KPI´s using Labor Data

CONVENTIONAL FINANCIAL AND NON-FINANCIAL INFORMATION

 Important economic KPI´s consist of financial and non-financial information presented in

the financial statement and Management Decision Analysis
 Economic KPI´s of a Financial Statement:
o Revenues Earned
o Capital Raised
o Compensation Paid
o Taxes Paid
 Economic KPI´s of MD and A´s:
o Top executives median compensation
o Reputation
o Penalties or sanctions paid
o Regulatory Compliance

ECONOMIC KPIs

 Resources consumed
 Costs incurred
 Assets obtained
 Earnings retained
 Donations given
  Market share secured/gained
 Financial risks assumed
 Dividends declared
 Liabilities assumed/settled

TRANSPARENCY IN FINANCIAL REPORTING

 Transparent financial reporting is vital to the continued growth and strength of the capital
markets and investor confidence.
 The achievement of effective internal controls is the key to business success, long-term
survival and sustainable performance
 In most organizations, internal controls are usually done by internal audit teamn, which
includes risk management and control.
 Board of Directors are responsible for its internal control systems

PROMOTING TRANSPARENCY IN FINANCIAL REPORTING AS A KEY TO

SUSTAINABILITY

 The business owner must play a more active role in the preparation of the financial
statements.
 Full disclosure of all critical information must be given in order for financial reporting to
be conducted with integrity.
 Independent and credible auditors must be responsible for overseeing financial reports
and related audits.
 The business owner must certify the completeness and accuracy of all financial reports in
order to ensure accountability.

the accountability of having a comprehensive and fruitful business closure relies on the
business owner. Thus, they should certify the completeness of all financial reports in
order to ensure accountability

COMPANIES NEED TO FURTHER INVEST ON THE FOLLOWING WITH RESPECT TO

INTERNAL CONTROLS:

Investment in internal controls must be established in order to potect the company in either
conventional or accidental financial _____[8:56]

Sales and marketing

supply chain

Pricing and contract managment

acquisition diligence and proceess

IT implementation and upgrade

Business continuity plan

FINANCIAL STATEMENTS AND INTERNAL CONTROL REPORTING

 Reporting of financial statements and internal control is vital because:

o It assists shareholders in meeting appropriate investment and voting decisions,
o Enable them to exercise ownership rights on informal basis
o Protects them from receiving misleading financial information.

ONE EMERGING GLOBAL TREND:

Investors demand transparent and reliable financial report

[THE CONCEPT OF SUSTAINABLE ENTERPRISE FOR THE 21ST CENTURY]

SUSTAINABILITY IN BUSINESS CAN BE CONTEXTUALIZE IN TWO:

 COMPETITIVE ADVANTAGE

where market is driven to do social good

 HUMAN PLANETARY IMPERATIVE

making your company helpful in addressing environmental and social issues

— There is a clear business case for implementing a diverse set of initiatives across people
(employees and society), planet (environment, facilities, and products), and profits (cost, savings,
brand recognition, and shareholders value)

THE WORLD IS CHANGING FAST ENOUGH

— Business needs to keep up with the dynamism

Best practices from 10-30 years ago may probably will not get them where they need to be in the
future

 Did you know that Nokia used to dominate the Mobile Phone market more than a decade
ago?
 Now, their mobile phone business was sold to Microsoft at a very low price!

HUMAN VALUES AS A KEY DRIVER OF SUSTAINABLE BUSINESS OPERATIONS

 Now, their mobile phone businesOur fundamental assumptions, values, and mindsets
must be challenged because they have driven us to adopt insatiable consumption patterns
and to attain economic growth based on increasingly scarce, nonrenewable resources.
 Many of our values are self-justifying and resistant to change.
  As future ceos or owners, we must avoid non-sustaining values as they do not promote
the well-being of people and plant, present and future
 Some of these values include individualism and hedonism (self indulgence),
nondemocratic values, and pretense knowledge (fake news, not facts).

HUMAN VALUES THAT PROMOTE SUSTAINABILITY

 must be embraced if we want to craft a path to sustainability

 Some of these values are
o mutuality sharing of a feeling to two or more parties
o equity, fair and partial - and honesty
o innovativeness
o collaboration
o co-creaion of common ground - having humility
 Deeply infusing sustainability - oriented values and creating holistic integration are the
highest level challenges associated with implementing sustainable strategies
 Positive benefits of this ethical orientation include better risk management, improved
organizational functioning, increased market attractiveness and better public relations

HUMAN SIDE OF SUSTAINABILITY

 Revisiting leadership
 Engaging employees and management teams
 Translating social and environmental sustainability dimensions into sustainable business
practices

RETHINKING LEADERSHIP

 Before, leaders of the industrial era show leadership through autocracy, command-and-
control orientation, and hierarchical mindset
 At present, more and more leaders are becoming more authentic, conversational, and
transparent
 This is by making sustainability a core concept
 Operational best practices begiin with targeting areas of operations that need
improvement
 Systems thinking: At a more fundamental level, employees and leaders of sustainable
enterprise understand that their organizations are whole systems and no collection of
isolated functions

The thinking should not be linear or one problem and one solution mindset

A questioning mind, in a respectful manner, is an important leadership skill

 The sustainable enterprise simultaneously addresses economic bottom line (profits), the
social bottom line (people), and the environmental bottom line (planet)
8 CHARACTERISTICS OF STATE OF THE ART ENTERPRISE COMPANIES (2007)

1. Base decisioins on a long term, collaborative, holistic mindset

2. Purue triple bottom line
3. Generate or regenerate earth's 5 cpaital stocks: natural, human, social, financial, and
manufactred capital
4. Operate on ethics-based bsiness principles and sound corporate governance practices
5. Conser rights and interests of all stakeholders
6. Commit to transparency and accountability
7. Give stakeholders opportunities to participate in decision making
8. Use stakeholder influence to promote meaningful systematic change amog peers and their
communities

HOW TO CREATE A CULTURE OF SUSTAINABILITY IN YOUR ENTERPRISE

 reduce utilities expense

 less office space
 educe travel expense
 redesign or innovate product specs
 increase employee productivity by boosting morale
 enhance brand reputation