ECON1010 Lecture Notes - Life-Cycle Assessment, Triple Bottom Line, Corporate Social Responsibility
Lecture 10 - Sustainable Business
Friday, 11 May 2018
12:00 PM
<<L10 Lecture Sustainable Business(1).pptx>>
Corporate Social Responsibility
• CSR is a management philosophy that incorporates the broader public interest into business
planning and decision making
• Accounting plays an important role in CSR because:
o Environmental and social impacts are often business costs
o Accounting information is used to report on CSR activities and performance
Triple Bottom Line Reporting
• TBL deals with economic, environmental and social performance
• Economic Reporting
o Reporting on economic performance is the traditional role of the financial statements
o Businesses have to be economically sustainable to survive
o We evaluate economic performance from the business' financial statement
o TBL also reports on other wider economic impacts of the business, e.g. number of jobs
created, tax paid
• Environmental Reporting
o This includes a range of possible measures, or indicators, depending on the nature of the
business concerned
o Examples include amount and type of energy consumed, greenhouse gas emissions,
waste, land use
o PUMA EXAMPLE IN SLIDE SHOW
• Social Reporting
o This involves looking at how the business interacts with the community
o Is the business a good corporate citizen? Is the business socially responsible?
o This includes issues such as employee rights, employee health and safety, education,
philanthropy
o ROYAL BANK OF SCOTLAND EXAMPLE IN SLIDE SHOW
Sustainability Reporting
• Life Cycle Analysis
o LCA is used to access the potential and real environmental impacts during all stages of a
product's life
o The 5 stages of in product's life cycle is are raw material extraction and processing,
product design and manufacture, packaging and distribution, product use, product end
of life
o The aim is to design, make and market more sustainable products
o LCA usually involves 3 stages:
• An inventory of possible materials and energy required for a product
• An assessment of potential and actual environmental impacts
• A review of the product to assess and/or improve its sustainability
o This technique is useful for comparing products but it can be complex to capture all
relevant data and identify environmental impacts
• Material Flow Cost Accounting
o MFCA allows a business to trace input materials that flow through production process
and measure the output of those production processes in terms of finished products and
waste
o Often used as part of LCA
o MFCA identifies the costs of waste and emissions
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