ACCT1000 Lecture Notes - Lecture 4: Financial Statement, Professional Code Of Quebec, Social Capital
31 May 2018
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ACCT - Module 4
Business sustainability
- Growing environmental and societal awareness has put pressure on entities to
consider non-financial impact
- Entities need to account for all resources used (labour, material, energy, forests,
water, air, etc.) and all outputs produced (whether products/services, carbon
emissions, waste, etc.).
Key drivers
- Competition for resources
o Worlds populatio is otiuousl groig
o Rising living standards will result in both expanded markets for goods and
services and upreedeted deads for the plaets atural resoures
o Many once considered renewable resources are becoming finite when we
consider human demands are growing more quickly than the ability of
natural processes to replenish them
- Climate change
o Fossil fuel based economy
o Businesses need to plan for a policy that is increasingly hostile toward
carbon emissions and for the costs of adaptation to climate change
- Economic globalisation
o Integration of national economies into the global economy
o Brings opportunities for business, but with risk
o There is a local enforced standard, and companies must meet
international expectations
- Connectivity and communication
o Increase in connectivity has led to less time to both build reputations
and/or destroy them
o It is easy to trak opas sustaiailit perforae ad to idel
disseminate their perspectives
Business Sustainability Principles
1. Ethics
The company establishes, promotes, monitors and maintains ethical standards and
practices in dealings with all company stakeholders
2. Governance
The company manages all its resources conscientiously and effectively, recognising
the fiduciary duty of corporate boards and managers to focus on the interest of all
company stakeholders
find more resources at oneclass.com
find more resources at oneclass.com
3. Transparency
The company provides timely disclosure of information about its products and
services, and activities, thus permitting stakeholders to make informed decisions
4. Business relationships
The company engages in fair trading practices with suppliers, distributors and
partners
5. Financial return
The company compensates providers of capital with a competitive return on the
investment and the protection of company assets
6. Community involvement/economic development
The company fosters a mutually beneficial relationship between the corporation and
the community in which it is sensitive to the culture, context and needs of the
community.
7. Value of products and services
The company respects the needs, desires and rights of its customers and strives to
provide the highest levels of product and service values
8. Employment practices
The company engages in human resource management practices that promote
personal and professional employee development, diversity and empowerment
9. Protection of the environment
The company strives to protect and promote sustainable development with
products, processes, services and activities
Theories of business sustainability
Corporate social responsibility (CSR)
Refers to the responsibility an entity has to all stakeholders, including society in general and
the physical environment in which it operates.
Reasons?
- Entities act in a socially responsible manner because there is ultimately some
benefit to their profits
- Entities want to limit interference from governments or other groups
- Managers are motivated simply by the desire to do the right thing, and that
there is no economic motive behind acting in a socially responsible manner
Shareholder value
A corporation has many stakeholders, including shareholders (owners), employees,
creditors, suppliers, governments, and other interested parties (unions, environmental
groups). There is the fundamental question regarding whether an entity has a responsibility
to consider all stakeholders equally.
find more resources at oneclass.com
find more resources at oneclass.com
Document Summary
Growing environmental and societal awareness has put pressure on entities to consider non-financial impact. Entities need to account for all resources used (labour, material, energy, forests, water, air, etc. ) and all outputs produced (whether products/services, carbon emissions, waste, etc. Climate change: fossil fuel based economy, businesses need to plan for a policy that is increasingly hostile toward carbon emissions and for the costs of adaptation to climate change. Integration of national economies into the global economy: brings opportunities for business, but with risk, there is a local enforced standard, and companies must meet international expectations. Increase in connectivity has led to less time to both build reputations and/or destroy them. It is easy to tra(cid:272)k (cid:272)o(cid:373)pa(cid:374)(cid:455)(cid:859)s sustai(cid:374)a(cid:271)ilit(cid:455) perfor(cid:373)a(cid:374)(cid:272)e a(cid:374)d to (cid:449)idel(cid:455) disseminate their perspectives. The company establishes, promotes, monitors and maintains ethical standards and practices in dealings with all company stakeholders: governance.
