Question

Relate the disclosure of the Sustainable Development Goals to the current business issue of social and environmental accounting and accountability.

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Gray (2006, p82) suggests that "there is a major disconnect between the implication of global data we have reviewed [on sustainability] and the partial and localized data chosen to constitute the social, environmental and sustainability reporting.” He goes on to say that if “the global data speaks truthfully and, extrapolating, the mass of corporate activity is actually highly unsustainable, then companies need to reflect this so we can discount the empty rhetoric and turn the pressure on to governments to undertake radical reconstruction.”

Required: Explain what Gray means by the above statements. Discuss the role, if any, that accountants can play in the disclosure of corporate activity especially as it relates to the issue of sustainability.

Gray, R. 2006 “Does sustainability reporting improve corporate behavior?: Wrong question? Right time?” Accounting and Business Research, Vol. 36, Supplement 1, pp65-88.

Answer 1

Ans

The analysis of the global sustainability data as released by United Nations and World Bank is showing that emissions of green house gases from industries and automobiles is reaching alarming levels. It is highlighting the pollution of rivers and water bodies by the industries like Tanneries, chemicals and steel.

However the sustainability reports being prepared by all Multi National companies in these sectors are showing big positive changes these industries are doing voluntarily through their corporate social neosensibility.

Thus Gray reports the huge difference between the global reports and the reports being prepared by the industries for their local regions.

Therefore there is a big role for independent social and environmental accountants who will impartially conduct the impact of business activities on the social and environmental surroundings and that will raise consciousness and help in regulation of industries who are only paying lip service to the cause.

Social Accountants can study the impact of the business scientifically using the latest technology and record the primary data so that it can be presented in a court of law if required. Industries can then be graded as per their environmental impact based on the reports of these accountants.