This document discusses sustainability accounting, which accounts for social, environmental, and economic impacts of decision making. It focuses on non-financial reporting and the triple bottom line of people, planet, profit. Sustainability accounting measures performance in these areas, evaluates companies' environmental/social/governance performance, and complements traditional financial accounting. It identifies risks/benefits and encourages stakeholder partnerships. Techniques include shadow pricing, life cycle analysis, and restating financial statements to reflect environmental, social, and economic value added. External impacts are also accounted for through scoping, boundary setting, valuation, and calculating sustainable profit.

2. CONTENTS
# DEFINITION
# NEED & USERS
# OBJECTIVES
# PRINCIPLES
# TRILPE BOTTOM LINE
# TECHNIQUES

3. DEFINATION
• Sustainability accounting is accounting for social ,
economic and environmental aspect of decision making.
• Sustainability accounting is a sub category of financial
accounting that focus on the disclosure of non financial
information about the firm.
• Sustainability accounting is also know as social accounting
, social and environmental accounting , corporate social
responsibility reporting etc.
• Sustainability accounting in managerial accounting is used
for internal decision making and the creation of new policies
that will have an effect on the organizations performance at
economic, ecological, and social (known as the triple bottom
line or Triple-P's; People, Planet, Profit) level.

4. • Investors
• Analysts
• Auditors
• Consultants
• Customers
• Companies

5. OBJECTIVES
• To measure performance towards
sustainability
• With conventional accounting
information, potential internal
users of sustainability information
can be distinguished from external
users

6. • To evaluate the environmental,
social, and governance
performance of companies.
• To inform development of an
integrated business strategy for
corporate management
• It is intended as a complement to
financial accounting

7. Purpose of Sustainability
Reporting

8. Benefits of sustainability
accounting
• Collect information on environmental
and socially related expenditure and
link them to financial benefits
• Show how environmental and social
external costs can decline over time
with commitment to sustainability
• Compliance with laws and
standards

9. • Highlight the social and environmental
risks associated with current financial
performance and aid risk management
• Identify which stakeholder relationships
present sustainability risks and benefits.
• Encourage partnership between
stakeholder organizations
Benefits ….

10. • Efficient governance and
management
• Potential cost savings
• Comprehensive risk management
• Brand management
Benefits ….

11. PRINCIPLES FOR
DEFINING THE REPORT
CONTENT
PRINCIPLES FOR
DEFINING THE REPORT
QUALITY
PRINCIPLES

14. Triple Bottom Line
TBL“ or "3BL",
Triple bottom line (abbreviated as TBL or
3BL) is an accounting framework with three
parts: social, environmental (or ecological)
and financial. These three divisions are also
called the three Ps: people, planet and
profit, or the "three pillars of sustainability".

15. • Triple bottom line accounting means
expanding the traditional company
reporting framework to take into account
not just financial outcomes but also
environmental and social performance.
• Thus the triple bottom line is based on
economic, environmental and social
measures of performance.

16. Some key links between
sustainability and business
performance are suggested by
the International Finance
Corporation (Focussing on the
“triple bottom line” 2005):

17. 1. Save costs by making
reductions to environmental
impacts and treating
employees well

18. 2. Increase revenues by
improving the environment
and benefiting the local
economy.

19. 3.Reduce risk by engaging
stakeholders.

20. 4.Boost their public
reputation by increasing
environmental efficiency.

21. 5.Develop human capital
through better human
resource management.

22. 6.Improve access to capital
via better governance.

23. 7.Create additional
opportunities from
community development
and environmental products

24. Economic Indicators

25. Environmental Indicators

26. Social Indicators

27. TECHNIQUES OF SUSTAINABILITY
ACCOUNTING
• SHADOW PRICE/SHADOW COST APPROACH-
Generate information on potential costs, benefits
and price changes. Calculates financial impact if
organization was sustainable.
• OTHER NAMES:-
Full cost accounting
Or
Data capture and measurement techniques
Or
Life cycle analysis

28. MULTI DIMENSIONAL ACCOUNTING
• TIMING-
It provides snapshot in time of the state of the
stock or it does show the flow of goods and
services rising from stock over a period.
• LOCATION-
It is within companies financial reporting
boundaries(internal) or outside(external).
• TYPE OF IMPACT-
environmental/social/economic(TRIPLE
BOTTOM LINE ACCOUNTING)

29. SUSTAINABILITY ACCOUNTING
• General name to get the prices right.
• Improved market based decision making
• External dimension of accounting for an
organization’s impact
• Example:
COSTS- petrol emissions from transport,
acid rain, climate change, adverse health
effects, reduced air quality etc.
BENEFITS- wider benefits to society by a
car run by petroleum,like, Ambulance; fire
brigade; truck transporting recycling
material.

31. CONVENTIONAL- PROFIT AND
LOSS ACCOUNT

32. RESTATEMENT OF PROFIT AND
LOSS ACOUNT:
• ECONOMIC VALUE ADDED- Restates the financial
flows in the P&L to show which different shareholder
groups benefitted from those flows. It shows the economic
value added to different stakeholders by organization's
activities.
• ENVIRONMENTAL VALUE ADDED- environment related
costs and benefits can be reflected by Environmental
Financial Statement (EFS). EFS is an aggregated cost-
benefit statement that attempts to collate and report, in a
single statement, total environmental expenditure and any
associated environmental savings.
• SOCIAL VALUE ADDED- the presentation of organization
wide socially related costs and benefits in Social
Financial Statement.

33. ECONOMIC
VALUE
ADDED
(INTERNAL)

34. ENVIRONMENTAL
VALUE
ADDED

35. SOCIAL
VALUE
ADDED

36. EXTERNAL FLOWS: EXTENDING
THE PROFIT AND LOSS ACCOUNT.
To prepare external accounts, an organization
must collect new information on external
environmental, economic, social impacts
relating to organization’s activities.
THERE ARE 4 STEPS IN PREPARATION
OF EXTERNAL COST ACCOUNTS:
1.Scoping impacts
2.Determining boundaries
3.Monetary valuation of impacts
4.The triple bottom line: calculating
sustainable profit

37. EXTERNAL
Environm-
ental
IMAPCTS

38. EXTERNAL SOCIAL IMPACTS
• Social costs and benefits related to employment
• Social benefits of corporate tax
• Social benefits of the product
ALCOHOL: ESTIMATING EXTERNAL
COSTS
• Cost to industry (absence, unemployment, premature
deaths)
• Cost of material damage from accidents.
• Costs of criminal activities.
• A range of international studies indicate that alcohol
misuse costs between 2% to 5% of a country’s Gross
National Product.
• The calculated alcohol misuse costs in England was
between 10.8 billion – 27 billion euros per year.

39. EXTERNAL ECONOMIC
IMPACTS
• Sustainability accounting includes detailed
economic impact of a company’s activities,
which may affect a range of stakeholders
in both beneficial and adverse ways.
• For example, positive impacts on local
suppliers and service providers via the
economic multiplier and negative economic
impacts on the local community form a
redundancy program.

40. ASSETS AND LIABILITIES: THE ROLE
OF THE BALANCE SHEET
Financial accounting recognizes following on the
Balance Sheet :
• Fixed Assets- assets which are held for long term.
• Working Capital- the inventories, debtors, cash and
creditors which are used in day- to- day operations.
• Long Term Liabilities- liabilities which will fall due in the
longer term, including debt which finances the business.
In Sustainability Accounting we add additional
information in assets and liabilities:
• ASSETS- Intangible Assets.
• LIABILITIES- Shadow liability
Shadow provision