strategies and resources for integrating sustainability in the introductory accounting courses karen...
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Strategies and Resources for Integrating Sustainability in the Introductory Accounting Courses
Karen W. BraunWendy M. Tietz
History of our sustainability journey…Three years agoThird editionLast yearThis year
Sustainability defined…“Meeting the needs of the present
without compromising the ability of future generations to meet their own needs”
-based on UN Brundtland Report
“The possibility that humans and other life will flourish on Earth forever.”
-John Ehrenfeld
“Do unto others, including future generations, as you would have them do unto you”
-An expansion of the Golden Rule.
Importance to business leaders
93% of CEOs believe sustainability is important to their company’s future success
96% of CEOs believe sustainability should be fully integrated into strategy and operations of a company
Often cited business reasonsCost savings (“Eco-efficiency”)Innovation/ Product developmentConsumer concernsCompetitive advantageBrand/reputation managementRisk reductionEmployee motivationInvestor relationsIncreased regulatory requirementsEthics (‘the right thing to do’)
Measurement & ReportingYou can‘t manage what you can’t
measureFor:
◦Internal change management◦External stakeholders
Global Sustainability Reporting
Global 100 companies◦ Nearly 100% of
European◦ 83% of U.S.
Global 250◦ 95% report
U.S. Sustainability Reporting (2011)Fortune 500
◦ 57% reportS&P 500
◦ 53% reportCompanies that
do NOT report are now in the minority
More than double 2010
Rising pressure from capital markets
Foreign stock Exchanges◦ London◦ Paris◦ Johannesburg
40% of U.S. shareholder proxies in 2011 were ESG issues
NASDAQ- June 2012 “urging” but still voluntary
Investors want ESG Information
1,100 institutional investors with >$30 trillion of assets under management are signatories
ESG info. taken into consideration “as part of fiduciary responsibilities”
How to report? Leading framework80% of the reporting
Global 250 companies
65% of the reporting S&P 500 companies
Over 5,000 globallyRequired for
NASDAQ Sustainability index
Integrated reportingAnnual Report Sustainability
report
International Integrated Reporting Committee (IIRC)
Pilot program:◦ All Big 4, Grant
Thornton, CFA Institute
◦ Over 80 companies
◦ 30 institutional investors
Consulting and Assurance ServicesBig 4 dominate
both - Verdantix
survey
Calls for Sustainability EducationCEO study:
◦ Formal educational institutions, including business schools, should be….increasing the knowledge and mindsets of future leaders and workers with respect to sustainability.
AACSBOne objective:
“to promote a greater role for education on sustainability practices and CSR in business schools”
Pathways Commission (AAA and AICPA)
Learning experiences should:◦ “reflect global trends
in business”◦ “develop a global
mind set in students”◦ “incorporate engaging
materials that demonstrate the role accountants play in society” including “questions and problems that need solving.”
Stewardship Function of Accounting“The responsible
overseeing and protection of something considered worth caring for and preserving.”
Stewardship and Accounting
Focus on triple bottom line impact of a company:◦ Economic◦ Environmental◦ Social
A broader and more holistic view of accounting’s role of providing relevant information to decision-makers.
Accounting Curriculum & Sustainability
Lay ground workStart creating a
sustainability mindset
Emphasis on high-level critical thinking
Broad-based for non-accounting majors, too
Topic specific coverage◦ Audit: Assurance
Services◦ Tax: tax credits◦ Corporate Financial:
Carbon credits◦ Systems: Materials
Flow Accounting systems.
◦ Cost: EMA
Introductory Upper level
Approaches:
Part of the reporting aspect of accounting
Awareness of GRI report
Link GRI indicators to course topics
Sustainability mindset with respect to:◦ Cost measurement◦ Planning◦ Decision making◦ Performance
EvaluationConnection between
business activities and accounting
Introductory Financial Introductory Managerial
Criteria for Selection of ResourcesStandard course
topicsShort time
requirementReal company
applications
Supplement to our text content
Short readings in each chapter
Numeric homework problems related to sustainability
Chapter 15 on Sustainability
Website houses resourcesSustainability resources website
General resourcesArticlesList of blogs and
news sitesTED talk links
Map of GRI Performance Indicators to Financial Accounting Topics
Course Topic GRI report componentIntroduction to financial accounting/reporting
General discussion of CSR & GRI Performance Indicators
Reporting accounting information to external users
Economic Performance Indicators in general
Cash, short-term investments, and internal control
Society Performance Indicators - S02 (Risks related to corruption), S03 (% of employees trained in anti-corruption), S04 (actions regarding incidents of corruption)
Receivables
PR8 (Customer privacy - # of breaches) and (related to sales) PR5 (practices related to customer satisfaction, including results of surveys measuring customer satisfaction)
List of GRI reports and linksRecognizable
companiesRatings A+, A,
B+, BAppropriate for
classroom discussion or assignments
Other financial acctg resources
CSR indicesWhat’s your footprint?
Company videosActual
companiesEngaging
studentsShort (< 5 min.)
for use inside of class
Debriefing & Discussion
Video example – Secret Lives of Eggs
The secret life of eggs
Shown in conjunction with ABC
What is the cost of this activity to ◦ The company?◦ The environment?◦ Society?
Cost/Benefit: What costs might increase as a result of the proposed change?
PodcastsAssigned for
outside of classCeresSustainability
News & Entertainment
Debrief & Discuss
Topical PowerPointsTopical primers
◦ Business case for Sustainability
◦ E-waste◦ Waste audits◦ Life-cycle of paper
bills◦ GRI◦ LEED certification
One caveat
Ex: Business case for sustainabilityCost savings (“Eco-efficiency”)Innovation/ Product developmentConsumer concernsCompetitive advantageBrand/reputation managementRisk reductionEmployee motivationInvestor relationsIncreased regulatory requirementsEthics (‘the right thing to do’)
Current events in the newsEnvironmental
Leader daily email (5-10 leading stories)
Post on course management platform
Assign for extra credit or quiz or exams
WebsitesGRIFueleconomy.govCompare
◦ Fuel Economy ($)◦ Environmental
impact◦ Safety
Use as a basis for ◦ Projecting cash flows◦ NPV, payback
period
Short classroom activitiesCritical thinkingSmall group
discussionOne per topic
area
Example: Laptop budgeting activityFind
sustainability initiatives of any company
Were specific dollar amounts disclosed?
What budgets would be affected by these initiatives?
Translating plans into budgets…
Example: Job costing activitySupply-chain
assessment is on the rise.
What sustainability-related information could be collected on the Job Cost Record w/r/t:◦ DM◦ DL◦ MOH
Example: Outside of class activityPersonal waste
auditKeep track for 2-
3 daysEstimate costWho bears cost
and how?Cost to society
and environment.
Example: GRI report discussionLink to Kimberly-
Clark 2011 GRI report
Questions appropriate for in-class or online discussion
Student feedback- 15 resources used during semesterMost memorable
“take-aways” from course◦ 25% included
sustainabilitySurvey
◦ 88% agreed resources helped them connect sustainability to the role accounting plays in measuring, analyzing and reporting business activities
RecapCEOs view it as
importantSustainability reporting
is increasing Investors/markets are
wanting ESG dataBusiness education is
being called forDovetails with
stewardship function of accounting
Introductory accounting classes can help develop a sustainability mindset
Link will be emailed to youWebsite toolkit
http://tinyurl.com/cmzgvl3
Questions?Contact information:[email protected]