Sustainability Auditing
and Reporting:
The Canadian Experience
ABSTRACT. This paper reviews the experience of
174 of Canada’s largest 1500 public and private sector
corporations which have begun to incorporate sus-
tainable development management and reporting as
part of their operations. Answers are provided to three
main questions: Why have they implemented this
initiative? What progress has been made in terms of
sustainability audit practice – frequency, focus, orga-
nization of the audit team –, internal communication,
and external reporting? And where has, and will the
leadership for the sustainability audit movement come
from as why? Sustainable development auditing and
reporting in Canada is voluntary. Practice varies
from an elementary level to a sophisticated integrated
assessment of social, environmental, labour, sourcing
and trading, and governance issues. The depth of
practice and experience in this area depends on several
factors, including: corporate commitment, the degree
of public perception of sector-wide environmental
issues, exposure to legal liability, and the extent of
dialogue and transparency associated with the auditing
process. Differences of opinion about accounting
and auditing standards as well as whether all, or
parts of, audits should be independent are explored.
The sources of data used for this paper include the
EthicScan Corporate 1500 DataBase, The Corporate
Ethics Monitor,1 various reports prepared by EthicScan
Canada, and the consultancies of both authors.
David Nitkin is President of Ethic Scan Canada and
publisher of The Corporate Ethics Monitor.
Leonard J. Brooks is Professor of Business Ethics and
Accounting, and Executive Director of the Clarkson
Centre for Business Ethics, at the Rotman School of
Management at the University of Toronto.
Journal of Business Ethics 17: 1499–1507, 1998.
© 1998 Kluwer Academic Publishers. Printed in the Netherlands.
TYPESET
David Nitkin
Leonard J. Brooks
Introduction
Sustainability auditing, reporting and decision-
making reflects the growing realization that it
is desirable and necessary for organizations to
understand the costs and benefits of their oper-
ations upon stakeholders. This involves an exam-
ination of the full life-cycle consequences of
products and services upon not only the natural
environment but also regional, national and
global economies, ecosystems and prospects.
In this paper, sustainability auditing is defined
as involving three essential characteristics: (a)
measurable standards are employed to assess envi-
ronmental management and performance and
link them to other standards or factors; (b) use
of a trained audit team; and (c) the organization
releases a progress report, either internally to the
Board of Directors, externally to the public, or
both. As Canadian organizations have gained
more experience thinking about the implications
of sustainable economy, sustainability auditing has
acquired additional characteristics including: (d)
independence of the audit team; (e) regular
scheduling of the audit to address all sites and
operations; and (f ) public release of the infor-
mation.
In Canada, sustainability auditing has evolved
sufficiently to enable the classification of activity
into the three stages identified in Table I. These
stages are not mutually exclusive but rather reflect
the evolving character of, and consciousness
toward, environmentalism and eco-responsibility
in the second half of the twentieth century.
1500 David Nitkin and Leonard J. Brooks

TABLE I
Stages of sophistication of sustainable development monitoring and reporting

Issue or characteristic Stage

Initial Transitory, maturing Sophisticated

Guiding perspective Environmental Environment-economy Sustainability

impacts impacts
Audit team Typically Internal, sometimes External or both
internal external
Degree of audit Low Potentially higher Potentially highest
independence
Treatment of environmental Inward looking Societal needs focus Linkage of business
responsibility and societal needs
Typical management Coordinator Senior officer and Senior full-time officer,
Environ. Cmttee. Site Environ. Cmttee.
of the Board Envir. Cmttee of Board
Stakeholder focus Shareholders Shareholders, staff All stakeholders
and community

Source: The Corporate Ethics Monitor, Vol. 9, Issue 4.

Why is sustainability auditing being done?
The majority of Canadian organizations do
not audit their environmental performance.
Those that do tend to be larger, distributed
across many sectors, notably natural resource-
based, and found in the private rather than
public sector. There are some who produce a
report for internal management purposes. Within
this group is a smaller sub-set of those who
review sustainability in terms of environmental
management and performance, and link the
environment to other social, labour and ethical
factors.
In the EthicScan Corporate 1500 DataBase2
many companies are found who undertake sus-
tainability auditing as defined above and issue
sustainable development reports. These organi-
zations belong to one or more of four categories.
They: (a) are in a sector that has made a practice
of doing such reporting; (b) have a significant
public affairs and/or environmental function and
thus possess the resources to audit; (c) have a
demonstrable public commitment to sustain-
ability; and/or (d) are ones whose products and
services are seen to have a publicly-recognized
environmental impact.
While these categories imply several moti-
vating factors for undertaking sustainability
auditing, the range of stimuli is quite complex,
and may differ from what organizations actually
state as their rationale for action. Our observa-
tion suggests that the following are significant in
raising the interest of Canadian executives in sus-
tainability auditing:
• government regulation and resulting legal
liability (company fines of up to $1
million/day as well as personal fines and
possibly jail for executives are contemplated
in the Canadian Environmental Protection Act
of 1988) for environmental malfeasance
which can be reduced by having an envi-
ronmental program as a “due diligence
defence”,
• negative public reaction to environmental
disasters causing diminution of profits and
restrictions on operations,
• industry association programs calling for
support from all members and where non-
 Sustainability Auditing and Reporting
compliance would result in sanctions and
public identification,
• real and potential consumer or special
interest group reaction,
• the desire to be an ISO 14000/1 registrant
in order to qualify for certain contracts,
• compliance clauses in contracts, lending
arrangements, or in bidding requirements,
• altruism,
• attempts to market an ethical/environmental
advantage, and
• possibility of profiting from recycling or
other environmental advantages.
On the other hand there are several reasons why
companies do not audit their environmental per-
formance. Management may be uninterested in
doing so. Governments, such as those in Canada,
may not require such activity. Organizations may
not choose to lead in this area but rather, given
manpower and other costs, prefer to be in the
vanguard of the rearguard. There may be a legal
vulnerability and stakeholder anger, from share-
holders and/or citizens, if certain liabilities are
disclosed. Other factors may contribute to inac-
tivity or inertia. Companies may feel that their
sector’s environmental “footprint” or impact is
limited. The environment is less a popular cause
than five years ago, according to public opinion
surveys. Organizations may believe that the
public values economy and jobs as pre-eminent
values, and is willing to sacrifice environmental
considerations when they affect traditional eco-
nomics. A growing number of companies are
shrinking their environmental department, pre-
ferring instead to contract the work out to
outside consultants. Finally, there are wholly-
owned subsidiaries of foreign-based transnationals
who do not dedicate resources to their Canadian
subsidiary to undertake such initiatives.
It is interesting to speculate on the degree to
which the existence of ethical, clean and envi-
ronment mutual funds have impacted upon a
willingness of Canadian companies to initiate
sustainable auditing. Such funds now account
for an estimated $2.20 billion in assets under
management. Since 1986, when the first social
investment mutual fund appeared in Canada, the
number of social investors in these funds has
1501
grown to 90,000. This does not include assets
controlled by church funds, pension funds, and
private trusts. Related stakeholder advocacy
initiatives, such as that by the Task Force on
the Churches and Corporate Responsibility3 have
raised such issues as environmental justice,
notably in the petroleum, mining and forestry
sectors. The pressures brought to bear by the
churches themselves and the Task Force have
brought far more awareness of environmental
issues to executives than have the socially respon-
sible mutual funds and other institutional
investors.
Probably the most significant reason for inac-
tivity is that many managers have yet to accept
the rationale that environmental action can be
profitable. Some investments may not justify the
projected costs, particularly as our taxation and
accounting systems improperly undervalue the
environment and conservation of resources. For
example, a company that cuts a 600 year old,
aboriginal or first-growth-forest tree records this
action as revenue producing with minimal costs
for labour and gasoline, thus producing a profit.
At present there is no value recorded in tradi-
tional accounting practice for conserving that
same tree. Similarly, if a company can export its
pollution costs to another stakeholder, it can
avoid recording the cost of clean-up against its
own profits. Since bonuses depend on tradition-
ally determined profits, is it any wonder why
many managers consider environment-related
activities counterproductive? It will take more
publicity of the examples at hand to convince
these executives that being environmentally
responsible is good business. Efforts are underway
to rectify these accounting idiosyncrasies, 4 but
solutions are not yet at hand.
What progress has been made?
To answer questions of progress made to date, a
detailed review was undertaken of 305 major
organizations, as reported in The Corporate Ethics
Monitor in 1995, 1996 and 1997 involving ethical
performance comparisons within 32 industry
sectors. Most of these organizations are private
sector businesses although about ten are Crown
1502 David Nitkin and Leonard J. Brooks
corporations or not-for-profit agencies. Data for
the comparisons were supplied by company
spokespersons but a copy of the information
typically was sent for verification and potential
elaboration to a union spokesperson, where there
was a collective bargaining process.
Undertaking an audit
Of the 305 organizations reviewed, 174 (57%)
indicate that they have undertaken a sustainability
audit. This is up from 45% when a similar survey
of a similar number of companies was undertaken
in 1992.
In some industry sectors, all or nearly all com-
panies have undertaken an audit. Examples of
sector-wide auditing include pipelines [7 of 7],
power utilities [11 of 11], breakfast cereals [5 of
5], and petroleum [6 of 6]. Sectors in Canada
where audits are common but not universal
include forestry [11 of 13], auto manufacturers
[5 of 6], chemical companies [12 of 14], hotel
and resort [5 of 7], industrial products [10 of 15],
gold mining [14 of 19], telephone companies
[6 of 10], iron and steel [5 of 9], life insurance
[5 of 8], fast food [6 of 10], financial institutions
[6 of 10], and the environmental services [5 of
8] sectors. Audits are uncommon in the specialty
retail, courier, pharmacy, and general insurance
businesses. The only two sectors where there
have been no such audits are car rentals and the
accounting profession.
Composition of the audit team
EthicScan recognizes and codes four different
kinds of audit teams: internal staff only, an
external team only, a combination of the two
[called “both”], and a category called “varies”.
The internal staff model can involve company
workers assessing their own sites or these same
staff rotating to review other sites within the
same company. Some companies use an outside
consultant to set the model, train staff, and then
pass the responsibility to internal staff. The
external model utilizes non-employees and is seen
by some as superior in that there is an ostensible
independence of the audit team. In point of fact,
since the company is commissioning the audit
but typically does not release it publicly, the
external model has some but not complete
potential to be independent. The combination
internal and external model, or both, is the most
common one found in Canadian organizations.
Typically, companies compose an audit team of
staff, professionals from other companies in the
sector, and independent audit or consulting
firms. Varies typically refers to different audit
team compositions depending upon the specific
site being audited.
Of the 174 organizations that perform such
audits, audit team details are available for 141. Of
those 141, Table II indicates that 66 or nearly
half [47%] use both internal and external staff.
28% use internal only whereas 9% use external
staff only. “Varies” responses were given at
another 16%.
To date, then, a very small minority of all
audits in Canada are performed exclusively by
externally-staffed audit teams. Explanations are
diverse. Some organizations do not want an inde-
pendent audit done. Others have used outsiders
to establish programs, which are now carried on
by inside staff. Still others prefer a combination
of insiders and outsiders. Where possible, regard-
less of the mix of insiders or outsiders, the skill
sets represented on an audit team should include
environmental expertise, specialized knowledge
of the technology being assessed, law, engi-
neering and measurement or accounting.
Frequency of auditing
As Table II suggests, there are significant varia-
tions in the frequency of auditing. Among those
sectors where organizations that conduct audits
typically do so annually are tobacco companies
[2 of 2], non-alcoholic beverages [4 of 5], elec-
trical products [3 of 5], gold mining [7 of 14],
and telephones [2 of 6].
Data on frequency of auditing may be mis-
leading inasmuch as several companies schedule
audits at different facilities with different fre-
quencies. An answer of every 2–4 years may
reflect the need to do an audit more frequently
 TABLE II
Canadian experience with sustainable auditing

Sector Number of companies Composition of audit team Frequency of audits Public

progress
Studied With audit Note Internal External Both Varies No info Annual 2 Yrs 3 Yrs. 4 Yrs. Other No inf report
Number %

Accounting 08 0 0% 0 0 0 0 0 0 0 0 0 0 0
Auto mfg. 06 5 83% 3 0 1 1 0 2 0 0 0 3 1
Auto products 07 4 57% 0 0 1 3 0 0 0 0 2 2 0
Beverages 08 5 63% 0 0 4 1 4 0 0 0 1 0 1
Car rental 07 0 0% 0 0 0 0 0 0 0 0 0 0 0
Cereals 05 5 100% 1 0 2 2 1 1 0 0 0 3 0
Chemical 14 12 86% 3 0 9 0 2 4 4 0 1 1 9
Confectionery 08 2 25% 0 0 1 1 1 0 0 0 0 1 1
Construction 10 5 50% 0 0 0 0 5 1 1 0 0 1 2 0

Sustainability Auditing and Reporting

Courier 06 1 17% 0 0 0 0 1 0 0 0 0 0 1 0
Department stores 08 4 50% 2 0 0 2 0 1 0 0 3 0 0
Electrical prod. 09 5 56% 2 1 2 0 3 0 0 0 2 0 1
Entertainment 10 3 30% 2 0 0 1 0 0 0 0 0 3 0
Environmental serv. 08 5 63% 0 0 0 0 5 1 0 0 1 1 2 2
Fast food 10 6 60% 0 0 0 0 6 0 0 0 0 2 4 0
Financial institutions 10 6 60% 3 0 2 4 0 1 0 0 0 4 1 0
Forestry 13 11 85% 0 0 0 0 11 3 0 1 0 5 2 6
Funeral 03 1 33% 1 0 0 0 0 0 0 0 1 0 0
General insurance 08 1 13% 1 0 0 0 0 0 1 0 0 0 0
Gold mining 19 14 74% 3 4 7 0 7 1 0 0 4 2 0
Grocery chains 08 3 38% 1 0 1 1 0 0 0 0 2 1 0
Hardware 08 3 38% 1 0 1 1 0 1 0 0 0 2 0
Hotels & resorts 07 5 71% 2 0 3 0 1 1 0 0 2 1 0
Industrial products 08 6 75% 1 0 5 0 2 1 0 1 1 1 0
Iron & steel 09 5 56% 0 0 0 0 5 1 0 2 0 1 1 2
Life insurance 08 5 63% 1 2 0 0 3 0 0 1 0 4 0 0
Metal mining 09 9 100% 3 0 5 1 2 1 3 2 1 0 6
Petroleum 06 6 100% 3 1 2 0 0 0 2 2 0 2 5
Pharmaceutical 11 4 36% 1 0 2 1 0 0 1 1 2 0 3
Pharmacy chains 08 2 25% 2 0 0 0 2 1 0 0 0 1 0 0
Pipelines 07 7 100% 0 2 5 0 2 1 2 1 1 0 3
Power utilities 11 11 100% 3 0 6 2 1 0 0 1 4 5 9
Specialty retail 08 1 13% 0 0 1 0 0 0 0 0 0 1 1
Telephones 10 6 60% 3 0 3 0 2 1 0 0 1 2 1
Tobacco 03 2 67% 1 1 0 0 2 0 0 0 0 0 0
Transport 07 4 57% 1 1 1 1 0 0 1 0 1 2 0
Totals 305 174 57% 40 12 66 23 33 38 16 18 9 48 45 51
Percentages 100% 57%
Percentages 100% 23% 7% 38% 13% 19% 22% 9% 10% 5% 28% 26% 29%
Percentages 141 100% 28% 9% 47% 16%
Percentages 129 100% 29% 12% 14% 7% 37%

1503
Source: The Corporate Ethics Monitor, 1995–1997 (Vol. 7–9).
Notes: 1. Two of these were energy audits only. 2. Some sites only, not company-wide. 3. One of these was a waste audit only.
1504 David Nitkin and Leonard J. Brooks
at a troublesome facility, or one that takes appre-
ciably longer to review.
For those 129 companies where we can cal-
culate frequency of audits, the following can be
reported. The most common audit frequency,
company-wide for all sites, is every year: 29%
audit annually, 12% audit every 2 years, and 21%
do so every 3 or 4 years. However, a large
number of responses (48 or 37%) were grouped
as “other”. This includes such answers as
“periodic” (10), “irregular” (9), “as needed” (5),
“continuous” (3), and “on-going” (3).
Audit focus
The most elementary audits involve only an
energy audit or a waste audit, and are typically
compliance-based. More sophisticated audits
prepared for Canadian companies typically assess
all aspects of production, including environ-
mental policies, transportation of raw materials,
fabrication of products, distribution, waste
recovery, and related operations. Where possible,
such audits measure compliance with audit pro-
tocols and the company’s policies. The most
sophisticated audits look at life-cycle costs, do
not assume current technology as a given, and
seek to assess alternative products and services.
Such sustainable audits start from definitions of
a sustainable business and look at all aspects of
operations, existing and normative.
The Responsible Care Program5 is an out-
standing example of an audit approach developed
for a high-risk industry. Initiated in Canada’s
chemical industry, it is now found in 22 coun-
tries worldwide. Unlike other countries where
advocacy is the norm, the Canadian code
requires company compliance with six con-
stituent codes, including emergency preparedness
and transportation. The degree to which
Canadian chemical companies are willing to go
to “walk the talk” is now at a sensitive stage.
Most member companies have conducted audits
and are expected to have informed local com-
munities, had their audits independently verified,
and issued “worst case” scenarios. However, pre-
liminary data from The Corporate Ethics Monitor,
in the Spring of 1997, indicates that only 1 of 14
companies (Celanese) has completed site verifi-
cation and sharing results with all stakeholders
at all sites.
Reporting: Internal organization and communication
It is worth noting that, according to the analyses
in The Corporate Ethics Monitor, companies
who do not have a senior executive with full
time responsibility for environmental affairs are
unlikely to issue an environmental report. The
notion that everyone in an organization should
have responsibility for the environment appears
to be largely platitude: when no-one is specifi-
cally designated, no-one is accountable although
all are responsible.
Reporting: External
As noted in Table II, fewer than one in three
organizations (29% or 51 of 174) issues an envi-
ronmental progress report to the public. Much
rarer still is the organization that makes public
the full text of its audits. These data are even
more sobering when it becomes clear that in 10
of these 51 cases, the environmental report was
for the parent company’s international operations,
which may or may not have contained Canadian
data identified by geographical breakdown.
Resource companies are the most likely to
issue environmental reports. Those companies or
agencies that are in the forefront of issuing
progress reports are typically in such sectors as
power utilities [9 of 11], metal mining [6 of 9],
chemical companies [9 of 14], petroleum [5 of
6], and forestry companies [6 of 13]. As Table II
illustrates, there are numerous sectors where no
progress reports are publicly issued.
Where have, and will, leadership come
from?
Leadership of sustainability auditing sprang ini-
tially from self-taught executives, or the ranks of
independent consultants in Canada. Recently,
the large consulting firms that are attached to
 Sustainability Auditing and Reporting
chartered accounting firms, the group primarily
responsible for the audit of financial statements
in Canada, have developed environmental man-
agement and audit practices to advise their
clients. However, since the efforts of the
accounting and consulting professions in Canada
are still in the development stage, and since their
focus is compliance rather than integrity based,
their domination of the field during the next
decade is unlikely. Instead, the desire for organi-
zations to be ISO 14000/1 compliant could
provide the focus for sustainability audits during
the next ten years. Consulting companies like
Arthur D. Little retain an early-entry, competi-
tive advantage in assisting clients with such
auditing. Members of the Ethics Practitioners’
Association of Canada6 also provide consulting
services in this area.
Standard setting and benchmarking
There is a tradition of 80 years of accounting
literature and audit practice that defines practice
standards for accountants in Canada. Traditionally
there is a standard auditor’s report to the share-
holders that the Board of Directors is required to
lay before the annual meeting of shareholders. It
is an audit by an accountant, certified as to
expertise and ethical standing, of the organiza-
tion’s systems of internal control and of its finan-
cial statements that are prepared in accord with
generally accepted accounting principles. There
is no requirement, at present, for an environ-
mental report except on specific projects prior to
their being undertaken. If the organization raises
funds from the public, its financial statement
audit report is usually available, but the language
used in it is in a standard form known as
“boiler plate” and does not give specific details.
In addition to standard financial audit reports,
however, there is a growing literature on
“special reports”, which may take the form of
“Environmental Audits” or “Environmental
Progress Reports” each of which conveys a
different level of assurance.
There are, however, no generally-accepted
principles governing “special reports” or sus-
tainability audits that are becoming a new class
1505
of non-audited reports. Various industry associ-
ations, and notably the Canadian Institute of
Chartered Accountants and the Society of
Management Accountants of Canada, have issued
studies, reports and guidelines on the subject, and
have more in progress. For example, in 1992 the
Society for Management Accountants of Canada
(SMAC) published Accounting for the Environment,
an issues paper that called for the development
of an environmental strategy, an environmental
information system, adequate training and an
environmental performance measurement system
complete with impact analyses, compliance
audits, environmental scanning and internal and
external reporting.7 The SMAC went on to
release Implementing Environmental Strategies in
1995 and Tools and Techniques of Environmental
Accounting for Business Decisions in 1996. Little
evidence exists however on the extent to which
these initiatives have yet been put to widespread
use.
The Canadian Institute of Chartered
Accountants (CICA) has just issued the research
report Full Cost Accounting from an Environmental
Perspective8 which shows how to take corporate
costing beyond the normal financial statements
but leaves the establishment of guidelines for
member professionals to other committees and
future study. This further study is underway, but
if the CICA continues to follow the lead of
the U.S. standard-setting body, the Financial
Accounting Standards Board, future standards
will deal with information now in financial state-
ments and will ignore many of the external costs
and future impacts which are important from an
environmental perspective. Therefore, although
individual accounting/consulting firms have pub-
lished booklets on their environmental services
and perspectives9 the full force of the accounting
and auditing professions in Canada will not be
felt for at least five years and probably longer.
This estimated time frame could be shortened
if the credibility of professional accountants or
financial statements is called into question in a
way that focuses public attention. For example,
this might be precipitated if a corporation faces
bankruptcy due to unrecorded pollution clean-
up costs just after a “clean” audit opinion is given
on its financial statements. While this predica-
1506 David Nitkin and Leonard J. Brooks
ment may be due to the failure of the traditional
accounting valuations of environment resources
and impacts, it may also stem from a lack of
expertise and therefore quality assurance in the
area of sustainability auditing. For a discussion
of the need for quality assurance and ethics, and
what the related credibility means for the
accounting and auditing professions, reference
should be made to another paper given at the
Nijenrode Conference by A.J. Seenan (1997), or
to a source such as: Professional Ethics for
Accountants (Brooks, 1995, p. 65). Suffice to say
that the credibility of the accounting and audit
professions is essential to their future, and they
will move quickly to insure that erosion does not
take place.
The CICA has provided benchmarking data in
its study Environmental Reporting in Canada: A
Survey of 1993 Reports (1994), and has offered
its thoughts on why to report, how to measure
environmental performance, what to report and
what it may lead to in: Reporting on Environmental
Performance (1994). While these provide good
frameworks and background material, the
practice of sustainability auditing and reporting
has not yet changed significantly as a result. The
end result of these works is to facilitate: account-
ability to stakeholders beyond shareholders; for-
mulation and implementation of environmental
policy, objectives and targets; environmental
management analysis; and environmental perfor-
mance analysis. In the long run, these studies and
those of the SMAC will be quite influential.
Reactive leadership
There has been several innovative developments.
The Canadian Chemical Producers Association
has established the Responsible Care Program,
mentioned above, that has proven to be the
model for industry associations in 21 other coun-
tries. Canadian forest producers have developed
environmental reporting practices for their
industry, and these are steering their audit
processes. Other innovations would include
international forest stewardship guidelines and
International Council on Metals and the
Environment Community responsibility guide-
lines. These innovations have been responses to
disaster (Bhopal) or public pressure (forestry prac-
tices), and similar reactive developments are sure
to stimulate innovation in the future.
The ISO initiative
The International Standards Organization [ISO]
14000 series, for which Canada has international
responsibility, promises to be a continuing
catalyst. The ISO standards allow companies to
demonstrate that they have and are following
standardized production processes in place, but
they do not go as far as they could. Hopefully,
future iterations of ISO 14000 will include an
examination of eco-responsibility in terms of the
need for a product, or its desirability (or termi-
nation) when measured in terms of ecosystem
costs.
Conclusion
Sustainable auditing is neither mandated nor
common practice in Canada. There are a rela-
tively large number of environmental progress
reports in Canada. Some are very promising in
terms of stakeholder inclusiveness and attempts
to deal with sustainable development issues.
There is little standardization of such reports and
little independent opportunity to correlate
external reports with what is audited internally.
What are state-of-the-art practices in Canada
in sustainability auditing? Canadian companies
are in a period of experimentation. Many orga-
nizations are at an initial stage or a transitory
stage. Few organizations publicly release the
full texts of their audits. For many reasons,
legal and otherwise, companies prefer to follow
rather than lead in this area. The development
of national standards would enhance the process
significantly, but broad-based sustainability
auditing will not be advocated by dominant
professions for up to a decade. Until then, the
catalysts for sustainability accounting and auditing
may well come from offshore, from ISO and
European developments.
This evidence suggests that Canadian managers
 Sustainability Auditing and Reporting
and members of Boards of Directors are not yet
convinced of the advantages of sustainability
accounting and auditing for the development of
data on their activities, the inclusion of sustain-
ability in their strategic and operating plans, and
for day-to-day decision making on a highly orga-
nized basis. However, the direction in favour of
better management of environmental impacts is
clear and momentum is growing. For those with
patience, this ultimately bodes well for the devel-
opment of broad-based corporate social perfor-
mance management.
Notes
1
The Corporate Ethics Monitor, a bi-monthly
published by EthicScan Canada Limited., Toronto,
Ontario, Canada (website: www.ethicscan.on.ca; e-mail
ethic@concentric.net), is now in its tenth year of
publication.
2
The 1500 companies comprising the database
includes one thousand publicly traded companies, four
hundred private enterprises, and one hundred Crown
corporations, municipalities, agencies and commis-
sions.
3
The Task Force on the Churches and Corporate
Responsibility has offices in Toronto and publishes
an interesting annual report on their activities
(Tel. # 416-923-1758).
4
The Canadian Institute of Chartered Accountants
has recently published several documents giving
guidance in this area – see references – but they do
not yet address the creation and recording of long-
term values, focusing instead on the accuracy of short-
term profits.
5
For further information, see the Canadian
Chemical Producers Association of Canada docu-
mentation, or European Chemical Industry Council,
CEFIC: Responsible Care (1996) and Chemical
Industries Association, Responsible Care: An Industry
Commitment (1995).
6
The Ethics Practitioners Association of Canada/
Association des Practiciens en Ethique du Canada,
now three years old, has 34 members, both individual
and corporate. Its mission is to support ethical behav-
iour in organizations by enhancing the quality and
availability of ethics advice and services across Canada.
7
Accounting for the Environment, The Society of
1507
Management Accountants of Canada, Hamilton,
Ontario, Canada, 1992, 16–20.
8
Full Cost Accounting from an Environmental Perspective,
The Canadian Institute of Chartered Accountants,
Toronto, Canada, 1997, xxi, xxii.
9
See for example those published by Coopers &
Lybrand, Price Waterhouse and KPMG Peat
Marwick.
References
Brooks, L. J.: 1995, Professional Ethics for Accountants
(West Publishing Company, St. Paul, Minnesota,
USA), 315 pp.
Canadian Institute of Chartered Accountants: 1994,
Environmental Reporting in Canada: A Survey of 1993
Reports (Toronto, Canada), 204 pp.
Canadian Institute of Chartered Accountants: Full
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David Nitkin
EthicScan Canada Limited.
Leonard J. Brooks
Rotman School of Management,
University of Toronto.