Sustainability Flashcards
What is Triple Bottom Line Reporting?
Triple bottom line is a concept that was introduced almost 25 years ago and it seeks to broaden the focus on the financial bottom line, to include social and environmental responsibilities.
It measures an entity’s degree of social responsibility, its economic value, and its environmental impact.
What are the three components of triple bottom line reporting?
- Economic (Profit):
- Profit
- Return of Investment - Social (People):
- Impact on the community
- Donations/Support to the communities
- Equity and access to social resources - Environmental (Planet):
- Land use/Rehabilitation
- Impact on land/air/water/natural resources/human wealth
What is expected from entities when reporting using the triple bottom line?
It requires businesses to measure, disclose and to be accountable to internal and external stakeholders of performance against specific environmental, social and economic goals as well as how they are incorporated into the business’s strategy.
Why is it important to report sustainability information?
The goal is to identify, record and report costs and activities that have an environmental and social impact across the supply chain.
Examples include:
- Environmental costs and impacts of operations on the environment.
- Details of dangerous materials.
- Pollutants emitted into the environment.
How does a business become sustainable?
A business can become sustainable if it can continue for the long term by creating wealth for shareholders without causing harm to society and the environment.
What is sustainable development?
Is the development which meets the needs of the present with no adverse implications for the future.
It involves understanding the connections between sustainability and business to deliver long-term profitability without compromising Social Justice and the environment.
What are the key drivers for sustainability? (4)
- Competition for resources: Population growth, finite resources (water, energy, forests, ecosystems).
- Climate Change: fossil fuel based economy and concentration of greenhouse gases are driving extreme weather patterns.
- Economic Globalization: companies operating and sourcing in multiple countries with wide disparities in environmental and social standards.
- Connectivity and Communication: Reputation can be built and destroyed in seconds and is increasingly disaggregated across multiple social networks.
The UN Sustainability Goals:
Look at slide 8 of the first PowerPoint presentation.
What are the two approaches to reporting on the triple bottom line?
- Sustainability Reporting:
Using the GRI (Global Reporting Initiative) Standards for sustainability reporting. - Integrated Reporting which contains a sustainability report:
It makes use of the King IV Code of Corporate Governance.
Guidance from the IIRC (International Integrated Reporting Council) can also be used along with the King IV.
What does GRI stand for?
GRI- is an independent international organisation that has pioneered sustainability reporting since 1997.
Why use GRI Standards when reporting?
Read slide 6 of PowerPoint 3.
What is an Integrated Report?
It is a concise communication about how an organization’s strategy, governance, performance and prospects, in the context of its external environment, lead to the creation of value in the short, medium and long term.
An integrated report benefits all stakeholders interested in an entity’s ability to create value over time, including employees, customers, suppliers, business partners, local communities, legislators, regulators, and policy-makers.
Integrated Reports contain both financial and non-financial information on:
- how an entity’s current operations create long-term value.
- how the connections between the entity’s various activities function and how the different parts contribute value.
What is the difference between integrated reporting and sustainability reporting?
An integrated report is mandatory where as a sustainability report is voluntary.
A sustainability report may form part of an integrated report but an integrated report will not form part of a sustainability report.
What is the difference between integrated reporting and sustainability reporting?
An integrated report is mandatory where as a sustainability report is voluntary.
A sustainability report may form part of an integrated report but an integrated report will not form part of a sustainability report.
An integrated report comments on whether the impacts that have been identified in a sustainability analysis will have a positive or negative effect on the company’s value, whereas sustainability reporting, reports on impacts that affect all stakeholders, thus it is much broader in its application.
An integrated report needs board sign-off which encourages companies to ensure that the finance team is involved in the making of an integrated report, whilst a sustainability report in most cases DOES NOT.
