rolling out sustainability accounting dimitar zvezdov centre for sustainability management, leuphana...
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Rolling out sustainability accounting
Dimitar Zvezdov
Centre for Sustainability Management, Leuphana University
Scharnhorststr. 1, 21335 Lüneburg, Germany
Presented at the
Seventh International Environmental Management Leadership Symposium
Rochester, USA, 2 – 3 May 2011
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Structure
Status of corporate sustainability accounting research and practice
What comes next
Specifics of SA roll out
Conclusion
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Status of corporate sustainability accounting research and practice
Existing literature focuses on examples that point out the linkage between sustainability management and corporate (financial) performance (e.g. Klassen & McLaughlin 1996; Bennett et al. 2011a)
Increasing recognition of potential benefits (e.g. Porter & van der Linde 1995; Schaltegger & Wagner 2006)
Identifies what the practice is (e.g. Bennett & James 1998; Bartolomeo et al. 2002; Bennett et al. 2011b)
But also what challenges exist (e.g. Burritt 2004, Gray et al. 2002) Does it pay, is it worth Who / what functions and departments should deal with certain issues How do companies measure and communicate externalities etc.
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Challenges that appear related
Approach more sustainability issues
Involve more people
Integrate more sustainability information in day-to-day activities
sustainability management and sustainability accounting moving from project based to day-to-day business activities; from a single department to the whole structure; from single site to the whole company
Etc.
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Status of corporate sustainability accounting research and practice
Initial speculations of a potential link between business and social and
environmental performance
Recognising the potential linkage between business
and social and environmental performance
sporadic, isolated experimental sustainability
projects
Observing good practice
Rolling out sustainability management
accounting
time
Sources: Bennett et al. 2003Bennett et al. 2011a forthcoming; Schaltegger et al. 2011 forthcoming
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Corporate information pyramid
Production Technology Procurement HR
Planning and decision making systems
Analysis and information systems
Control and reporting systems
Value-driven accounting systems
Qualitative operational systems
Sources: Hufschlag 2010; Scheer 1990
Corporate sustainability accounting
Sales
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Roll out: various definitions Example of a term that comes from practice and not from science (Worren
et al. 1999)
(Marketing) launch (e.g. a new product) taking place in a series of stages over an area, each stage involving an increased number of outlets
(Merchandising) full introduction of a new product to the entire market after a successful test introduction.
A staged series of activities that often accumulate meaning as they occur. Computer products: describe a series of related product announcements that are staged
over time. Public relations campaigns use the term to describe the revelation of a major company
theme, event, or other message over a period of time calculated to lead to ideal results. the installation staging (e.g. of new equipment) is sometimes called a rollout.
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The importance of roll out management
Secures a smooth transition from project basis to regular operations
Reduces project costs through managing quality and efficiency
Bridges management challenges with content challenges
Etc.
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The importance of roll out managementProject Regular operations
Objectives Outputs – tangible; relatively easy to describe, define and measure; tending towards objective.
Outcomes – often intangible; difficult to quantify; benefits often based on changes to organizational culture and behaviors; introducing new capabilities into the organization; tending towards subjective.
Scope Strictly limited; tightly defined; not subject to change during the life of the project.
Not tightly defined or bounded; likely to change during the life cycle of the program.
Duration Relatively short term; typically three to six months. Relatively long term typically eighteen months to three years.
Risk profile
Project risk is relatively easy to identify and manage. The project failure would result in relatively limited impact on the organization relative to program risk.
Program risk is more complex and potentially the impact on the organization if a risk materializes will be greater relative to project risk. Programme failure could result in material financial, reputational or operational loss.
Nature of the problem Clearly defined Ill-defined; often disagreement between key stakeholders on the
nature and definition of the problem.
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Sustainability accounting roll out:What needs to be considered
Organisational aspects – with particular considerations of sustainability accounting
Content-related aspects – with particular considerations of the roll-out process
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Organisational aspects
Professional project management (e.g. Hufschlag 2010) Not sufficient to have environmental/sustainability experts Not sufficient to have “all-rounders“ Be able to explain to everyone why they need to get involved and how
they need to get involved (setting up hotlines)
Motivating senior management (after Homma & Bauschke 2010) Senior management needs to be involved beyond “sounds great! We
might consider the option next year” Not in an easy position: principals and agents at the same time (Hill &
Jones 1995) Senior management has the authority to delegate tasks, and Can motivate employees
Organisational aspects (2)
Involving staff (Homma & Bauschke 2010) Actually quite fortunate with sustainability People don’t like to be told what to do (except from their direct boss) Explaining clearly what is needed and why it is needed Providing sufficient support and assistance, so that the involved don’t
feel as if they are bothering the project management whenever they need support
Slide 12 of 13
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Content-related aspects
Information flows: information providers and users at the same time
Infrastructure: Organise and prepare the infrastrucure, as the existing is often unsuitable
Future-oriented information: influencing performance rather than observing it
Bridging information systems: linking monetary and physical data
Securing information quality: growing amounts of information make it impossible for existing functions to analyse information quality
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Conclusion and discussion
Based on both assumptions and observations: roll out is the next step in sustainability accounting research and practice
Challenge that needs to be approached with sufficient expertise and preparation
Further research needed to uncover the specifics and provide examples of good practice in this phase