Sustainability in Managerial Accounting - Essay Example

Sustainability in Managerial Accounting 20th April, Sustainability in Managerial Accounting Randolph and Masters (2008) that in ecology, the term “sustainability” is used to refer to how the biological systems normally remain productive and diverse. Healthy long-lasting forests and wetlands are a few examples of sustainable biological systems. According to Garrison, Noreen, and Brewer (2015), the idea of sustainability is based on the principle that individuals and their societies are made up of economic, environmental, and social systems that are normally in constant relations and that should be kept in balance or harmony if the society is to go on functioning to the benefits of its various inhabitants in the current community and the future.

A balanced community is one that is able to endure into the unknown future, offering decent ways of life to its society members; hence a sustainable society views the planet in a wider context considering both space and time. The term “sustainability” can be used interchangeably with corporate social responsibility as it puts into consideration social responsibility, economic viability, and environmental responsibility. Sustainability, therefore, ensures stewardship of the natural resources, and safeguarding of the physical environment and encompasses business systems, behaviors, and models that are essential for enduring value creation (Willard, 2012).

Sustainability is important in managerial accounting as it enables members in businesses, governments, and industries to add value to their diverse associations by serving individuals in integrative roles in value-creation processes, linking the company strategies to sustainability, providing measurements, reporting and accounting skills and evaluating opportunities and risks (Epstein,2008). Garrison et al. (2015) recommended that sustainability reporting should be incorporated into the balanced scorecard by including environmental and social performance measures.

The social performance measures are significant as they center on the organization’s community service, employee satisfaction and safety, and philanthropic investments. The environmental performance measures focal point is the organization’s water and energy use per unit of output and their disposal performance and waste generation. Willard (2012) noted that individuals in public accounting practices are able to add value to their customers by offering services that are related to sustainability reporting and accounting, advancement of sustainable strategies in business, and assurance.

The management of various organizations has a role to support sustainability by ensuring that their businesses take into consideration social and ecological performance together with their financial performances. The management that adopts green performance and value reporting is able to establish competitive edges in the marketplaces hence attracting more customers and therefore improving their productivity. Randolph and Masters (2008) noted that the role of the managers is to embed sustainability in the core business so that they can have a balanced approach athwart the community, customer, environment, and individual parts of the business.

The top management should delegate the day-to-day problem-solving tasks to the lower-level leaders as they concentrate on bigger issues such as the implementation of sustainability programs. Sustainability will affect companies positively as we continue in the 21st century as the business risks will be reduced and it leads to improvement in a business's strategic position and financial performance. Epstein (2008) noted that the enterprises that are ahead in obtaining the utmost business values from the sustainability programs are those that identify that, in 21st-century organizations, sustainability is a critical mission just like other fundamental functions such as employee safety, quality, or customer service.

The organizations must therefore ensure that sustainability programs are implemented and monitored to enable the business to be successful. References Epstein, M. (2008). Making sustainability work: Best practices in managing and measuring corporate social, environmental and economic impacts. Sheffield, U.K.: Greenleaf Pub. Garrison, R. Noreen, E., & Brewer, P. (2015). Managerial accounting (15th ed.). New York, U.S.: McGraw-Hill/Irwin. Randolph, J., & Masters, M. (2008). Energy for Sustainability: Technology, planning, policy.

Washington, D.C.: Island Press. Willard, B. (2012). The new sustainability advantage: Seven business case benefits of a triple bottom line. Gabriola Island, B.C.: New Society Publishers.