User:Rachelhannahlee/sandbox

Article evaluation
The article that I chose to evaluate is titled "Sustainability accounting" and is directly tied to the topic I am interested in for my literature review. I read and evaluated the article according to the following questions: Yes, everything in this article was relevant to the article topic. The article was organized in a cohesive and relevant manner, beginning with the history of sustainability accounting and then delving into the methodologies, organizations and initiatives, and outlook. Due to the cohesiveness of the article, there was nothing that distracted me. Yes, the article is neutral. The article does a good job mentioning methodologies and organizations without attributing a personal opinion to these methodologies and organizations. While the article as a whole does a fairly good job of representing methodologies and organizations outside of the United States, there are some notable regions not mentioned. For example, there is no mention of the sustainability accounting practices of Asian countries such as Japan or South Korea. Unfortunately, some links results in an error page in which the reference cannot be found. An example of this can be found in the seventh citation, titled "Industry as a partner for sustainable development" published by the Association of Chartered Certified Accountants (ACCA). For the citation links that do work, the links support the claims made in the article. No, there are some facts that lack a reference. For example, the last sentence of the first paragraph that reads "The topic is fairly new and being led in Europe" needs a citation. For the facts that do have references, they are appropriate and reliable. Many of the citations are references to published articles from peer-reviewed journals. The citations to peer-reviewed journals seem to be fairly neutral sources. For example, the fifth citation is from a journal titled "Journal of World Business" and the sixth citation is from a journal titled "Accounting, Auditing & Accountability Journal". Many of the citations seem to be older, with many sources being published in 2012. The article could benefit from more recent, updated sources. Additionally, the article does not mention the Sustainable Development Goals, which are goals set by the United Nations to be accomplished by 2030. These goals were created in 2015. Although there is a separate Wikipedia page for the Sustainable Development Goals, I believe that it would be useful if it was mentioned in this article as these Sustainable Development Goals overlap with sustainability accounting practices. The only conversation that exists for this article is in regards to edits made and instructions for reviewing the edits and reporting errors. The article is part of two WikiProjects: WikiProject Business / Accounting (rated Start-class, Low-importance) and WikiProject Environment / Sustainability (rated Start-class, Mid-importance).
 * Is everything in the article relevant to the article topic? Is there anything that distracted you?
 * Is the article neutral? Are there any claims, or frames, that appear heavily biased toward a particular position?
 * Are there viewpoints that are overrepresented, or underrepresented?
 * Check a few citations. Do the links work? Does the source support the claims in the article?
 * Is each fact referenced with an appropriate, reliable reference? Where does the information come from? Are these neutral sources? If biased, is that bias noted?
 * Is any information out of date? Is anything missing that could be added?
 * Check out the Talk page of the article. What kinds of conversations, if any, are going on behind the scenes about how to represent this topic?
 * How is the article rated? Is it a part of any WikiProjects?

Week 3 - Add to an article: Sustainability Accounting in Introduction Paragraph
"Sustainability accounting is often used to generate value creation within an organization."

Week 4 - Possible Topics
1.) Sustainability Accounting 2.) Balanced Scorecard
 * Lack of discussion concerning the different methods in which companies are implementing sustainability accounting within their organizations.
 * Lack of discussion regarding the reasons why companies pursue sustainability accounting.
 * Lack of discussion about the financial benefits of incorporating sustainability accounting.
 * Lack of discussion regarding how it ties with a company's sustainability accounting efforts.
 * Lack of discussion identifying specific models on how to improve the balanced scorecard.

Week 5 - Improving an Existing Article: Sustainability Accounting
What can be improved: The style/tone of the article is not reflect the encyclopedic tone used on Wikipedia. A majority of the information provided by this article needs to be updated to include new frameworks and initiatives for sustainability accounting. Additionally, as mentioned in the week 4 critique of the article, there is a lack of discussion regarding the methods, reasons, and benefits of sustainability accounting.

Contributions to selected article: I will add a section detailing the different methods that companies are using to measure their sustainability efforts. I will also discuss how these sustainability measurements are tied to overall corporate goals. Additionally, I will add a section discussing the different motivations that companies may have to practice sustainability accounting. Finally, I will also add a section regarding the benefits of sustainable accounting (financial and non-financial).

Bibliography: Possible sources to add to the article include:
 * Adams, C. and Frost G. (2008, December). Integrating sustainability reporting into management practices. Accounting Forum, 32(4), 288-302. doi.org/10.1016/j.accfor.2008.05.002
 * Ameer, R. and Othman, R. (2012, June). Sustainability Practices and Corporate Financial Performance: A Study Based on the Top Global Corporations. J Bus Ethics, 108(1), 61-79. doi.org/10.1007/s10551-011-1063-y
 * Brown H., Jong M., and Levy D. (2009, April). Building institutions based on information disclosure: lessons from GRI’s sustainability reporting. Journal of Cleaner Production, 17(6), 571-580. doi.org/10.1016/j.jclepro.2008.12.009
 * Gray, R.H. (1994, February). Corporate Reporting for Sustainable Development: Accounting for Sustainability in 2000AD. Environmental Values, 3(1), 17-45. doi.org/10.3197/096327194776679782
 * Möller, A. and Schaltegger, S. (2015, October). The Sustainability Balanced Scorecard as a Framework for Eco-efficiency Analysis. Journal of Industrial Ecology, 9(4), 73-83. doi:10.1162/108819805775247927
 * Perrini, F. and Tencati, A. (2006, September). Sustainability and stakeholder management: the need for new corporate performance evaluation and reporting systems. Bus. Strat. Env., 15(5), 296-308. doi: 10.1002/bse.538
 * Rodriguez, A., Cotran, H., & Stewart, L. (2017, June). Evaluating the Effectiveness of Sustainability Disclosure: Findings from a Recent SASB Study. Journal of Applied Corporate Finance, 29(2), 100-108. doi.org/10.1111/jacf.12237
 * Schaltegger, S. and Burritt, R. (2010, October). Sustainability accounting for companies: Catchphrase or decision support for business leaders? Journal of World Business, 45(4), 375-384. doi.org/10.1016/j.jwb.2009.08.002

Week 6: Draft of Improved Article: Sustainability Accounting
Revised Section: Methodology - Frameworks: this section was edited to include information regarding methods and frameworks for sustainability reporting

Frameworks
Sustainability accounting continues to develop. It is therefore of importance that companies understand the scenery of reporting frameworks, standards and guidelines that may affect the form and content of their reports. There are several organisations that offer services to companies that want to change the traditional financial statement disclosure for sustainability reporting.

In mostly all countries around the world, there are currently no governmental requirements for companies to prepare and publish sustainability reports. Companies that have started to adopt this new method of reporting have faced new challenges in reporting due to the lack of experience. Failing to report accordingly to the guidelines and frameworks provided (see OECD and GRI) would lead them to potentially reduce their credibility of published information.

The GRI, OECD and UNCSD (United Nations Commission on Sustainable Development)are some of the main actors in integrating a policy framework for better integrating the three dimensional level of sustainability by decoupling economic growth from environmental pressures.

The GRI is a multi-stakeholder organization that is committed to developing and maintaining the "Sustainability Reporting Guidelines." The goal is the continuous improvement of sustainability reporting, this is only a protocol that approaches the application levels, there are three levels of reporting A, B and C, but these are not yet legally ratified fundamentals and are only used to assist companies with their sustainable reports.

On the one hand the UNCSD focuses only on the environmental dimension of the sustainability accounting.

On the other hand, the OECD (Organization for Economic Co-operation and Development) focuses only in two frameworks: the analytical and accounting frameworks.

Analytical frameworks
Analytical frameworks are important for linking information from different areas. Various types of frameworks are being used nowadays depending on the purpose of measurement. These frameworks seek to: Some examples of analytical frameworks are; Pressure – State – Response (PSR) model which is based on one of its variants Driving Force – Pressure – State – Impact – Response used by the European Environment Agency (EEA) or the Driving Force – State – Response.
 * Integrate the economic, environmental and social dimensions of sustainable development
 * Have sound foundations and to maintain key information needed to improve sustainable development measurements
 * Clarify relationships between different indicators and policies.

One such analytical framework is the sustainability balanced scorecard model. Using the popular balanced scorecard framework as its basis, the sustainability balanced scorecard model requires new data for sustainability, which can be obtained through eco-efficiency analysis. Eco-efficiency analysis observes the causal relationship between economic value creation and environmental impact added through two forms of assessment: lifecycle inventories and lifecycle impact. These assessments connect the balanced scorecard to corporate environmental accounting systems by joining different modeling processes. This method observes the relationships between the social, environmental, and economic dimensions.

Another analytical framework that monitors and tracks corporate performance is the sustainability evaluation and reporting system (SERS). Developed by the Research Centre of Bocconi University on Risk, Security, Occupational Health and Safety, Environment and Crisis Management (SPACE), SERS was developed to address the challenges faced by organizations when managing various stakeholder relationships. SERS compiles various management tools (e.g. key performance indicators, environmental reporting, and social reporting) to create an inclusive model. SERS is composed of three modules: the overall reporting system (which is composed of the annual report, the social report, the environmental report, and a set of integrated performance indicators), the integrated information system, and KPIs for corporate sustainability. SERS is flexible, allowing it to be applied to companies across different industries, sizes, and countries. SERS also allows for the comprehensive monitoring of qualitative and quantitative information to aid in overall corporate goals. For example, a metric could compare the total value of waste generated during the year to the value added by a process.

Accounting frameworks
On the other hand, the accounting frameworks seek to quantify information in the three dimensions of sustainability accounting. The System of National Accounts (SNA) has proven that measuring sustainable development with the conventional system of financial reporting is inadequate. The accounting structure imposes a more systematic approach that is not too flexible in comparison to the standards and frameworks that offer the GRI and OECD among others. Accounting for sustainability therefore requires an extension of its standard framework. The OECD offers two different approaches to the accounting framework for sustainability accounting. Measuring environmental-economic-social interrelationships needs a clear understanding of the relationships that exists between the natural environment and the economy. It is not possible without understanding the physical representation. The physical flow accounts are helpful in showing the characteristics of production and consumption activities. Some of these accounts focus on the physical exchange between the economic system and natural environment.
 * 1) measuring environmental-economic-social interrelationships
 * 2) Wealth-based approaches

Wealth-based approaches to sustainability refer to the preservation of stock of wealth. Sustainability is observed as the maintenance of the capital base of a country and therefore potentially measured. A number of environmental changes are contained also in these financial statements that are measured during an accounting period of time.

The GRI offers advanced material to help organisations of all types to create their accountability reports. This published material lead organisations through the reporting process with main idea of becoming more sustainable in their practices in everyday business.

Specific techniques to measure information in sustainability accounting include : The Inventory Approach focuses on the different categories of natural capital and their consumption and/or enhancement. This approach identifies, records, monitors, and then reports on these different categories. These categories are analyzed according to specific classifications, including critical, non-renewable/nonsubstitutable, non-renewable/substitutable, and renewable natural capital.
 * 1) Inventory Approach
 * 2) Sustainable Cost Approach
 * 3) Resource Flow/Input-Output Approach

The Sustainable Cost Approach results in a notional amount on the income statement that quantifies the organization’s failure to “leave the biosphere at the end of the accounting period no worse off than it was at the beginning of the accounting period”. In other words, this amount represents how much it would cost an organization to return the biosphere to its natural state at the beginning of the accounting period.

The Resource Flow/Input-Output Approach attempts to report the resource flows of the organization. Rather than explicitly reporting sustainability, it focuses on resources used to provide transparency. This approach catalogues the resources flowing into and out of the organization to pinpoint potential areas of improvement. New Section: Motivations and Benefits of Sustainability Accounting

Motivations and Benefits
Schaltegger and Burritt propose six main motivations for practicing sustainability accounting : Möller and Schaltegger add that another motivation is to assist in decision-making. They argue that making decisions solely based on financial information is superficial at best. There are certain business areas that financial data cannot precisely evaluate, such as customer satisfaction, organizational learning, and product quality. Therefore, a mix of financial and nonfinancial info can help make well-informed decisions.
 * 1) Greenwashing
 * 2) Mimicry and industry pressure
 * 3) Legislative pressure
 * 4) Stakeholder pressure and ensuring the "license to operate"
 * 5) Self-regulation, corporate responsibility and ethical reasons
 * 6) Managing the business case for sustainability

Ultimately, shareholders want to see more sustainability reporting because it translates to increased corporate financial performance. This is because sustainability requires a long-term vision, which is reflected in strategic planning. Strategic planning is manifested in long-term visions and a wider range of responsibilities toward its stakeholders. Companies that place emphasis on sustainability practices have higher financial performance, as measured by profit before taxation, return on assets, and cash flow from operations, than their counterparts.

Revised Section: Summary and outlook - added criticisms of sustainability reporting. Also fixed grammar issues.

Summary and outlook
Nevertheless, the development of regulatory frameworks is getting closer in several countries; accountants will need to broaden their knowledge and to establish a common dialogue with social and ecological professionals. The formation of independent transdisciplinary sustainability teams to prepare and audit sustainability accounts would add credibility to the process.

Like the sections above illustrated, sustainable accounting results in different interpretations and intended uses of accounting. The development of a pragmatic set of tools for corporate practice is progress. Future research needs to address the real challenge facing corporate management to develop pragmatic tools for a well described set of business situations. The needs include the decision and control needs of corporate managers, whether or not it is the case that they are responsible for environmental, social or economic issues associated with corporate activities. The trade-offs and complementary situations need to be identified, analysed and accounting that provides a basis for movement towards corporate and general sustainability must be developed.

To fall short of a convincing conceptualization will leave sustainability accounting as a broad umbrella term, with little practical usefulness. The linkage between sustainability accounting and sustainability reporting needs to be extended as well. In this context, sustainability reporting remains at an unfinished stage of development and presently, is more of a buzzword than a well defined approach. The debate remains open to challenge this goal on the premise of sustainability, its operationalisation and its accountings.

In view of these aspects Geoff Lamberton provides a promising framework for the various forms of accounting. It draws together the five general mayor themes evident in social and environmental accounting research and practice, including the GRI Sustainability Accounting Guidelines. He depicts a comprehensive sustainability accounting framework which displays the complex interconnections between the various components and dimensions of sustainability. It balances the need for integration of the variety in information, measurements and reporting with the differentiated unitary information effects between the dimensions of sustainable development. The multiple units of measurement include narratives of social policy and procedures as well traditional accounting principles and practice. Assumptions underpinning the specification of this framework are: It is unrealistic to expect business to voluntarily commit the resources required for full sustainable accounting implementation. For financing the implementation of sustainability accounting and reporting one option would be to use environmental taxes to raise revenue and to discourage negative environmental impacts. Once the sustainability accounting system is established tax rates could be linked to (sustainability) performance outcomes to encourage the transition to sustainability at the organizational level.
 * 1) the objective(s)  of the sustainability accounting framework and the reporting model;
 * 2) the  principles  underpinning the application of the model;
 * 3) techniques  like data capture tools, accounting records and measurements;
 * 4) reports  used to present information to stakeholders;
 * 5) and qualitative attributes  of the information produced and reported.

A promising trail in similar way may be the concept of the community welfare economics (German: "Gemeinwohl-Ökonomie") by Christian Felber. More like a framework for sustainability accounting it is a framework or an alternative way of economics and the society in general. It suggests that business should measure its contributions of economic success according to the benefits reimbursed to the society as social and ecological factors. Similar to tax principles, the business performance is specified by an accounts of points (representing the contributions to overall well-being) and therefore the company receive (tax) benefits or support in other various form, or even not.

A further interesting example is provided by the Sustainability Flower which was developed in 2009 by an international group of prominent pioneers and innovators of the organic movement. The Flowers performance indicators were defined on the basis of the GRI Guidelines and looks to unite four dimensions of sustainability (economic life, societal life, cultural life and ecology with six sub dimensions) in a model.

A further promising approach toward the measurement of human, social and natural capital including environmental quality, health, security, equity, education and free time is made by the Buddhist foundation and the Bhutan Government toward operationalising the objective of Gross National Happiness. These innovative projects may demonstrate that an alternative cultural perspective is needed as well to inform an accounting that is capable of making a genuine contribution to sustainability. The future direction of sustainability accounting and sustain economic development should continue to display the essential quality of diversity. Humankind has much to lose if this transition does not take place.

Despite the promising approaches to sustainability reporting, there are still concerns regarding the effectiveness of such reports. Rodriguez, Cotran, and Steward highlight the SASB as one such report. Under SASB, certain sustainability metrics have been standardized to help investors evaluate corporate risk profiles of companies. In 2016, SASB conducted a study analyzing the current state of disclosure by observing the practices of the largest ten companies (by revenue) in each of the 79 industries. The study showed that sustainability disclosure in SEC filings varies amongst industries. This variability is likely driven by characteristics unique to the industry, such as the regulatory environment. Additionally, the study found that while most industries possess high levels of disclosure, the quality of the disclosures are low.

Adams and Frost found a similar result in a study examining three Australian and four British companies. Adams and Frost were concerned with the completeness and authenticity of sustainability reports and the motives of the managers issuing them. The companies observed in the study have been practicing sustainability reporting for several years and are considered to be adopting best practices for sustainability reporting. Specifically, Adams and Frost examine the KPIs developed in these companies to measure performance and how these KPIs are implemented in the decision-making process and performance management. The study showed that challenges faced by companies during the KPI development process varied widely, from adapting for different geographic regions and cultures to creating targets. Lastly, the study also showed that when information was not advantageous to the organization, responsibility to the stakeholder is undermined. This suggests that an increase in governmental involvement may lead to adoptions that will in turn improve corporate performance. Furthermore, the increasing demand by shareholders for non-financial information is expected to serve as an impetus for greater transparency, such as the use of standardized reporting metrics. Despite the positive correlation between sustainability and financial performance, transparency must improve to meet the needs of the shareholders.

While the creation of sustainability frameworks and measurements to improve the communication between businesses and shareholders is valuable, they must still be improved.