Accounting: Business Reporting for Decision Making 7th Edition by Jacqueline Birt Solution manual
1.20 Outline the nine principles of business sustainability performance as put forward by Epstein and Roy (2003).
The following table presents the nine principles of business sustainability performance as outlined by Epstein and Roy (2003).
| Principles of business sustainability performance | ||
| 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 of its resources conscientiously and effectively, recognising the fiduciary duty of corporate boards and managers to focus on the interest of all company stakeholders. |
| 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 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 restore the environment and sustainable development with products, processes, services and activities. |
| Source: Epstein and Roy 2003, ‘Improving sustainability performance: specifying, implementing and measuring key principles’, as cited in Epstein 2008, p. 37. | ||
1.21 Outline some ways that accountants could contribute to the sustainability efforts of organisations.
In 2015, IFAC President, Olivia Kirtley, stated: ‘Accountants working in the public and private sectors have a significant role to play in supporting and making the decisions that guide an organisation’s ability to be resilient.’ The IFAC suggests eight practical ways for accountants to make a difference and fulfil their role as business partners.
- Identify and connect key trends and impacts to the organisation’s strategy, business model and performance.
- Integrate significant natural and social capital issues into decision-making processes.