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Acca p1 chap 15  social & env issues
Acca p1 chap 15  social & env issues
Acca p1 chap 15  social & env issues
Acca p1 chap 15  social & env issues
Acca p1 chap 15  social & env issues
Acca p1 chap 15  social & env issues
Acca p1 chap 15  social & env issues
Acca p1 chap 15  social & env issues
Acca p1 chap 15  social & env issues
Acca p1 chap 15  social & env issues
Acca p1 chap 15  social & env issues
Acca p1 chap 15  social & env issues
Acca p1 chap 15  social & env issues
Acca p1 chap 15  social & env issues
Acca p1 chap 15  social & env issues
Acca p1 chap 15  social & env issues
Acca p1 chap 15  social & env issues
Acca p1 chap 15  social & env issues
Acca p1 chap 15  social & env issues
Acca p1 chap 15  social & env issues
Acca p1 chap 15  social & env issues
Acca p1 chap 15  social & env issues
Acca p1 chap 15  social & env issues
Acca p1 chap 15  social & env issues
Acca p1 chap 15  social & env issues
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Acca p1 chap 15 social & env issues

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  • 1. Chapter 15
    Social & environmental issues
  • 2.
  • 3. Sustainability
    Meet present need without compromising future needs
    Long term mtce of systems according to env, eco, social concerns.
    Sustainability is an attempt to provide the best outcome for human beings and env. Both now and for the indefinite future.
  • 4. Importance of Sustainability
    Gain awareness of org’s actions on the env
    Nowadays co’s feel more responsible and accountable to limit damage caused to the env
    A.k.a: Environmental footprints
    Sustainable development implies intergenerational equity
    CSR reports give details of env & sustainability actions
    Sustainability – includes economic & social concern
    Sustainability also include the concept of Triple bottom line developed by John Elkington
    TBL shows full cost of development, i.e , Economic, Social & environmental.
    Sustainability relates to the org i.r.oplannnig for LT growth, thus ensuring that the org will still operate in the foreseeable future.
  • 5.
  • 6. Effects of economic activity
  • 7. Environmental footprint
    Org operates at a cost to the Env- negative externalities.
    E.F – Attempt to evaluate the size of a co’s impact on the env in 3 aspects
    1)resource consumption
    2)harm to the env- eg pollution, emissions
    3)resource consumption &pollution emissions – qualitative and quatitative evaluations.
  • 8. Environmental footprint
    Quotient approach
    Subjective Approach
  • 9. Quotient Approach
    Objective Approach.
    Sustainability measured : Amt of resource available v/s actual use of resource.
    - Has quantifiable measures of social & env footprints.- same as Tri Bottom line.
    Progress towards sustainability can be measured by analysing , e.g , water usage over time…
    Sustainability = usage < production
  • 10. Subjective approach
    Measures intentions of org to achieve goals & objectives.
    Progress achieved is not easy to quantify
    Progress can be made , eg waste reduction
    But org cant determine the exact amount and effect of this waste reduction.
  • 11. Social footprint
    Evaluation in 3 areas:
    1) social capital
    2) human capital
    3) constructed capital
    Eco activities must be sustainable in all 3 areas.
    Sustainability achieved when social needs of org are met.
    Social capital- Social networks & mutually held knowledge to take effective actions.
    Human capital – Personal health , knowledge , skills , human rights , ethics
    Constructed capital – Physical infrastructures in society ; e.g roads
    Anthro capital
  • 12. Accounting for Sustainability
    - 2 methods to account for sustainability : Full cost accounting and Triple bottom line .
  • 13. Full cost accounting
    Calculate total cost of Co’s activities , incl : env, eco & social costs.
    Aim of FCA- include all costs , even those incurred outside the org.
    Include all the costs of an action/ decision , into the costing system.
    So now the product costing will contain both financial and non financial data.
    Look for other examples
  • 14. TripleBottomLine accounting
    Expands traditional reporting framework
    Includes env & social perf over and above traditional eco & financial perf.
    Consider Triple P’s : People, Planet , Profit.
    Org need proper tools to measure success and monitor progress.
    People- these are stakeholders of the Co. Actions of the co from the viewpoint of different user groups
    Planet- Attempt to reduce ecological footprint. Limit env damage. Co wont be involved in resource depletion.
    Profit- Normal , traditional bottom line. Aim is to maximise profit to maximise shareholders’ return. A TBL org will balance/synergise profit objective with 2 other objectives.
  • 15. Internal management systems
    EMAS- economic management & audit software.
    Focus on disclosure of env systems
    Help to improve co’s env perf
    Co need to produce a regular public env stmt
    Accuracy & reliability of info is checked by independent verifier – to ensure credibility & recognition
    ISO 14000 is a pre-requisite before implementation of EMAS.
    EMAS require org to implement an Env mgmt system( ems)
    4 important elements in EMAS scheme:
    1) Legal requirement
    2) Dialogue/ reporting
    3) Improved environmental performance
    4) employee involvement
  • 16. Internal management systems
    ISO 14000
    Focus on compliance with internal environmental systems
    Series of stds dealing with env mgmt, supported by audit programme
    ISO14000 provides a basis for EMAS
    ISO14000 focus in internal control systems, but provide stakeholders with assurance of good environmental mgmt
    There are a Number of required to be fullfilled before obtaining iso accreditation
  • 17. Benefits of compliance with ISO or EMAS
    Reduced cost in waste mgmt
    Savings in consumption of energy & materials
    Lower distribution costs
    Improved supply chain
    Improved corporate image/ integrity/ image/accountability in front of stakeholders
    A framework for continuous improvement of co’s environmental performance
  • 18. Social & environmental audits
    Social audit
    - process where org assess & demonstrate social , eco, env – benefits & limitations.
    - measure how much org achieve shared values set in mission stmt.
    A process for env audit
    S.A provides info , over and above traditional fin reporting
    S.A links TBL with FCA
    An important factor in S.A is the involvement of external stakeholders.
    S.A evaluates org’s footprint within a given accounting period from the external perspective.
  • 19. Elements of Social audit
    Stmt of purpose
    External view - external stakeholders’ view to form opinion on the org’s position- outside/in approach.
    Internal view – views of directors, staff.. To assess ways of working and rewards . Also to ensure mgmt & i.c.s can achieve stated purpose & objectives.
    Review & planning- audit team manages social audit. Also the performance will be measured to be included in next year’s audit planning.
  • 20. Social audit report
    Overview of the co
    Salient features of the fs
    Overview of products with negative env impacts
    Co’s stance wrt: salaries, job security , policies on discrimination .
    Social impact of the Co in terms of the community, social work
    env impact from co’s activities/ operations
  • 21. Environmental auditing
    AIM
    assess org’s impact on the env
    Help to implement env stds – emas & iso14000
    It provides basic data for env accounting
    Integrate env perf measures into core financial processes to generate cost savings
    Reduce env impact through improved mgmt of resources
  • 22. Environmental auditing
    3 elements to consider:
    1) agreed metrics- what should be measured?
    2) performance measured against the metrics
    3) reporting on the levels of compliance / variance.
    Env audit leads to env action plan
    Main areas in env audit: waste mgmt, emissions, ground/water protection, surface water protection, energy consumption, protection of env sensitive areas(ozone layer), mgmt of contracts.
  • 23. Environmental accounting
    Supports integration of env perf measures
    Social & env auditing provide meta data / empirical evidence of the achievement of social & env objectives
    Social & env auditing makes env accounting possible.
  • 24. Benefits of Env accounting
    Cost savings
    Environmental preservation
    Good corporate governance
  • 25. Examples of measuring impact on env
    Env accounting – monitor water usage
    Social footprints – choose suppliers using sustainable sources of raw mats, following adequate social & env practices
    Env footprints – reduce waste , eg co2 emissions

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