Sustainability and Accounting

Sustainability and accounting

The article “Cleaning Up” discusses how companies can use management controls systems to implement sustainably measures that can bring profits to a company the company. In today’s economic environment, there is a perception that there is a trade off between profits and corporate responsibility. This view limits the future business growth and innovation of a company. The article uses General Electric and Proctor & Gamble to further illustrate how sustainability initiatives can be implemented using management control and management accounting systems that benefits all stakeholders.

Management control systems and management accounting systems play a role at three levels of company: Strategic thinking, managerial processes, and operations. The article states that once a company outlines its sustainability goals and strategies, MCS highlights sustainability as a corporate priority by evaluating, measuring, and compensating employees based on sustainability goals. MCS also breaks down an organization’s sustainability targets and objects, which is further broken down to be meaningful for individuals and business units. This allows everyone involved in the company to be apart of achieving sustainability goals.

In the 1960’s P&G realized the need for social and environmental sustainability and in 1999, developed strategic objectives to meet the needs of their stakeholders and social environmental issues. The company began to communicate the importance of sustainability and it also set up a centralized organization structure, the Global Sustainability Department. The department was composed of experts who provided the company’s individual business units of sustainability matters, identified emerging sustainability issues, and helped business units incorporate sustainable development into their businesses. Using Objectives-Goals-Strategies-and Measures, P&G can assess, valuate activity, and progress towards the company’s...