Sustainability Accounting

Sustainability Accounting (also known as social accounting, social and environmental accounting, corporate social reporting, corporate social responsibility reporting, or non-financial reporting) was originated about 20 years ago[1] and is considered a subcategory of financial accounting that focus on the disclosure of non-financial information about a firm’s performance to external parties such as capital holders, mainly to stakeholders, creditors and other authorities. These represent the activities that have a direct impact on society, environment and economic performance of an organisation. Sustainability accounting in managerial accounting contrast with financial accounting in that managerial accounting is used for internal decision making and the creation of new policies that will have an effect on the organisation's performance at economical, ecological and social (known as the triple bottom line or Triple-P’s; People, Planet, Profit) level.

Sustainability Accounting is a tool used by organisations to become more sustainable. The most known widely used measurements are the Corporate Sustainability Reporting and the triple bottom line accounting. These recognise the role of financial information and shows how traditional accounting is extended by improving transparency and accountability by reporting on the Triple-P's.

As a result of the triple bottom level reporting, and in order to render and guarantee consistency in social and environmental information the GRI (Global Reporting Initiative), was established with the goal to provide guidelines to organisations reporting on sustainability. In some countries guidelines were developed to complement the GRI. The GRI states that “reporting on economic, environmental and social performance by all organizations is a routine and comparable as financial reporting”.[2]