Page 26 - PakistanAccountantOct-Dec2017

CA Signature Qualificationture Qualification Signa P CA that Empowers to Leadthat Empowers to Lead PAKISTANAKISTAN have emerged and reported by the newly formed Institute for of Commerce's Charter for Sustainable Development and the Social and Ethical Accountability (ISEA). ISEA was founded as a Pronouncements from the World Business Council for Sustainable cooperative venture between Non-governmental Organisations Development fail to address the deeper questions about total (NGOs), universities, businesses and consultancies to encourage resource allocation, methodology and best practices to deal with and codify best practices in social accounting. eco-justice issues and instabilities appearing in businesses. Probably, the best way to envisage the emerging best practice of social accounting and reporting is to think of the social account as In today’s fluctuating and highly comprising three layers of information. These three layers are: uncertain political and commercial ▪ Descriptive data about the organisation’s stakeholder environment, sustainability will relationships: This includes information as employee numbers, pay by category of employee, community involvement initiatives certainly prove to be the most and provision of facilities for customers. Mostly this information is important policy issue governments, included in the annual report. business entities and society will ▪ Information relating to the accountability of the have to grapple in the near future. organisation: This relates to reporting the extent to which the company is meeting current legal, ethical and industry standards, for example, it may include accident rates and sickness leaves, More pertinently, for accounting and reporting, both the numbers of disabled employees, noise levels, fair trade conditions European Union (EU) and the UN have explicitly addressed the and assessments of compliance with the company's own mission role that accounting procedures and reporting will have to play if statement. An obvious element of this is the sort of data being corporations are to cope with the sustainability challenges. The EU currently produced in the better environmental reports. Fifth Action Program on the Environment (towards sustainability) has signaled its desire for accounting to redefine its concepts, ▪ Stakeholder dialogue information provides the third layer rules, conventions and methods so that the full cost of consuming of information: This data relates to the processes undertaken and using environmental resources are calculated and included by the organisation to consult and listen to all its stakeholders in the product cost and its ultimate price. It is believed that this and provide public feedback on what the stakeholders had will lead to economic and efficient approach towards resource to say about the company, its ethical positioning, community allocation and hence, will assist in the pursuit of sustainability. responsibility and provision of reliable information about its activities. The Global Reporting Initiative (GRI) has developed a leading sustainability reporting framework for the private sector and Sustainability Accounting & Reporting: In today’s fluctuating public agencies to promote sustainability practices through and highly uncertain political and commercial environment, appropriate and useful reporting. However, we have a long way to sustainability will certainly prove to be the most important policy go before detailed and systematic accounting and reporting for issue governments, business entities and society will have to sustainable development can become a common practice. grapple in the near future. There are no current requirements that companies should report on the extent to which their activities are The UN Conference on Trade and Development has instigated a in harmony with the demands of sustainable development. range of research projects intended to explore how accounting might contribute to a move towards sustainability. The most Principles – Content of the Report recent of these projects are summarised in International and Accounting Reporting Issues 1995 Review, which outlines the lack Content of progress towards accounting for sustainability and offers a number of explorations for potential future growth to deal with related challenges. Many countries have already worked on the Stakeholder Sustainability Materiality Completeness concept that needs to be adopted for sustainable growth in future. Inclusiveness Context ▪ Cover topic and ▪ The reporting ▪ Coverage of the ▪ The report Conclusion Indicators reflecting organisation material topics, should present Environmental, social accounting and reporting are becoming organisation's should identify Indicators and the organisation's increasingly relevant and mere reports based on financial figures significant its stakeholders definition performance in a economic, and explain in of the report wider context of will not serve the purpose. Whilst not always popular with environmental, and the report how it boundary. sustainability. companies, the increasing importance of environmental issues, the social impacts, has responded to ▪ Reflect significant re-emerging awareness of the social dimensions of organisations, ▪ Topics which their reasonable economic, the growing importance of stockholding as a concept and would substantively expectations and environmental, and the absolutely essential imperatives of sustainability are all influence the interests. social impacts. assessments ▪ Enable ensuring that we must embrace these new forms of accounting and decisions of stakeholders to and reporting. Recent years have seen not only an increasing stakeholders. assess the reporting acceptance for these new reporting approaches, but also energetic organisation's and innovative experimentation by far-sighted organisations. performance in the reporting period. This concept, in light of the above elaborated facts, can easily be Current environmental reporting and management practices adopted and considered in Pakistan by the entrepreneurs and have only the most tenuous connection with sustainability and corporate sector, as this country has already been in depth of do not ensure that a company is moving towards sustainability. environmental and social issues due to the industrial sector and Even current guidelines issued by the International Chamber the general prevailing circumstances. October - December 2017tober - December 2017 24 T24 The Pakistan Accountant he Pakistan Accountant Oc