Sustainability accounting has been considered to make a firm more transparent and therefore more accountable to their stakeholders (carol ann tilt). Sustainable accounting is the concept of including non-financial information that is related to the social, environmental and the impact of a company on the earth and the community it is in Reference This is also known as the triple bottom line as mentioned by Milton Friedman, and Corporate social Responsibility accounting. Sustainability accounting is recognised to be important by one of the largest accounting global professional body ACCA. ACCA (2004a) claim the importance of performance indicators and the use of third-party verification, and stakeholder involvement.
It is argued firms that following sustainable accounting can gain competitive advantage and enhance reputation Reference. Even if companies have to make a huge investment to implement sustainable development, the financial investment will be greater over the long-term and the company will benefit, the stakeholder and also the investors, and will, therefore, look more attractive to other external users which creates a more competitive advantage. It is also argued that sustainable accounting can enhance a firm’s reputation.
This is because consumers and investors are more conscious, environmentally, socially and economically. Investors are more willing to invest their money in sustainable firms, compared to those that are not as there are more economic benefits. However, on the other hand, it is argued that sustainable accounting takes time and is costly. This is because it takes a lot of time for information to be collated and to organise a develop reports. A firm may need to employ more staff for the demand of CSR reporting to be met. International journal of business and technology, claims that putting employees under pressure by increasing their workload can cause” poor health, absenteeism, decreased job satisfaction and an unstable emotional state”. However, in my opinion, I think that sustainable accounting is important because failing to comply to accounting sustainability will result in firms losing competitive advantage, a reputation as the firms may be regarded as ”untrustworthy” as their reporting may be considered unethical and therefore not comply with social, environmental and economic standards.