Accounting has always been an important part of business; whether in the form of audited financial statements as we know today, or primitive accounting methods involving the use of clay tokens and bollae dating back thousands of years.

Financial and management accounting are both important tools in decision making, and offer a mechanism for providing accountability to shareholders and other stakeholders, on the stewardship and use of an organization's resources and its performance.

This need for accountability has traditionally focused on the economic or financial performance of the organization, considered to be a key indicator of success. And, indeed, the success of an organization can hardly be sustained unless it is financially viable.

There has however, been an increasing trend in accounting and reporting, where the focus is not only on economic or financial performance, but equally on social an environmental performance - Sustainability Accounting and Reporting.

The concept of 'sustainability', (which, by the way, I believe to be the most overused word of the 21st century, though important here) and sustainable development came on the scene back in 1987, with the publication of the Brundtland Report, which explained the concept as 'development that meets the needs of the present without compromising the ability of future generations to meet their own needs'. The thinking therefore, behind sustainability accounting is that organizations need to be accountable beyond their economic performance, and, social and environmental considerations are equally important factors.

With growing concerns worldwide about social and environmental challenges, climate change, increasing inequality, poverty and resource depletion, it is no surprise that resources like water, forests and ecosystems are increasingly being ascribed a financial value and seen as assets that need to be accounted for. The question now arises, how do we account for, and report on sustainability?

Sustainability accounting and reporting

In the financial accounting field there are well known institutions that work to bring about convergence within the industry, such as the International Accounting Standards Board (IASB), whose objective, as they put it, is to 'develop a single set of high quality, understandable, enforceable and globally accepted international financial reporting standards (IFRSs) through its standard-setting body'. Another such institution is the International Auditing and Assurance Standards Board (IAASB), again working towards 'facilitating the convergence of international and national standards. In doing so, enhanc[ing] the quality and uniformity of practice throughout the world and strengthen[ing] public confidence in the global auditing and assurance profession.'

When it comes to sustainability accounting and reporting, however, the field is far less convergent. Perhaps due to the nature of the social and environmental factors that need to be accounted for and reported on, or, maybe because the field is relatively young in comparison to financial accounting. Although, it should be noted, that the sustainability accounting and reporting field is not as young as one might think. Records on reporting by US Steel in the early nineteen hundreds included information on areas such as worker safety, employee housing and community development (Buhr, 2008).

There are a number of international organizations that have been working towards the promotion and standardization of sustainability accounting and reporting, though the focus of many of these initiatives tends to be on the reporting component; providing standards and indicators, rather than on techniques and methodologies to account for social and environmental factors. (Concepts like triple bottom line accounting and green economics; accounting for ecosystems, inter-generational equity and carrying capacity are all the subject of another twelve hundred plus words at a later date).

Perhaps one of the most well-known of these International Organizations is the Global Reporting Initiative (GRI), 'a non-profit organisation that promotes economic, environmental and social sustainability [and] provides all companies and organizations with a comprehensive sustainability reporting framework that is widely used around the world.' Not unlike its counterparts in the financial accounting field, its mission is 'to make sustainability reporting standard practice for all organisations'.

The GRI provides a comprehensive reporting framework that includes sector specific guidance as well as rated application levels (A, B and C) that define how many GRI standard disclosures have been reported on in a sustainability report. The application of GRIs for sustainability reporting is making its appearance in a few sustainability reports being produced in Trinidad and Tobago.

Another well-known organisation in the sustainability arena is accountAbility, which has published the AA1000 Series of Standards which are based on inclusivity, materiality and responsiveness. These provide guidance in relation to sustainability principles, sustainability assurance and stakeholder engagement and have also been adopted locally by organizations that pursue sustainability reporting in Trinidad and Tobago.

It is noteworthy at this point to mention that these examples noted and most other initiatives are completely voluntary and carry no legal requirement to report.

So the focus has been on reporting and encouraging organisations to not only report on financial information but to also to provide social and environmental information, which is equally important in being accountable to stakeholders. And, there has been an increasing trend both internationally and in Trinidad and Tobago toward these types of reports.

Arguably, there are at least three forces that are working toward this increasing trend. The first of these being 'coercive forces', where there is coercion from outside the organization to move toward sustainability reporting. This, for example, could be brought about by demanding consumer groups, civil society organisations or other stakeholders. The second is 'normative pressures', where shared norms and values of organizations cause them to adopt similar practices. The third is 'mimetic forces', where organisations start reporting on sustainability because other organisations are doing this, and they are concerned about reputational issues if they do not follow suit. (adapted Larrinaga-Gonzales, 2008).

It is perhaps because of this third force that critics will argue that sustainability reporting is just part of a broader public relations exercise; used to show what 'good' an organisation has been doing for the year. If approached in a comprehensive manner, however, sustainability reporting has proven to provide useful indicators to an organisation that very often also impact on the financial bottom line.

Whether you are a critic or a believer, it is hard to argue against the fact that the world today continues to face unprecedented social and environmental challenges, and these are not only impacting broadly on our planet, but also presenting unique dilemmas for organizations (public and private) operating in this unpredictable environment.

In Trinidad and Tobago, we are continually faced with social and environmental challenges that affect individuals and organizations alike; flooding, pollution, crime, inequity.

As organisations start to appreciate the interdependent relationship which they have with society and the environment, and understand that they need stable societies and environments for their very survival, perhaps they will start to value these as assets and also then, appreciate the need to be accountable for the impacts of their decisions and activities on these assets.

Perhaps only then, can there be a convergence of practice in the field of sustainability accounting and reporting, where some day, preparing audited sustainability reports will become as commonplace as preparing audited financial reports.