Accounting for Sustainability Flashcards

Flashcards on Accounting for Sustainability

Sustainability practices

Any pursuit that prolongs the use of, reduces, or eliminates resources being consumed in performing transactions to achieve an individual or organizational objective.

Management accounting

Helps organizations understand the costs next to the benefits brought about by sustainability practices.

Sustainability and Economic Profit

Using fewer resources or using them smarter has fundamental economic benefits in the medium to longer term.

External cost

The extent to which organizations knowingly or unknowingly cause the incurrence of costs owing to the second- and third-order effects of their actions.

Sustainability value chains

Have been developed to better capture the true costs incurred and value contributed by organizations.

Sustainability indicators

By identifying target levels of performance and relating them to performance indicators, organizations form perceptions of their actual performance and drive desirable behaviors.

Triple bottom line reporting (TBL)

A system that proposes that in order to better understand an organization’s performance, a consideration of its financial performance must be judged against its social and environmental impacts.

Social (Triple Bottom Line)

The degree to which societies within physical, financial, and influential proximity of an organization have been impacted by its operations.

Environmental (Triple Bottom Line)

The degree to which natural environments have been impacted by an organization’s operations.

Prevention costs

Costs expended to reduce or eliminate the likelihood that environmental problems will arise in the future.

Appraisal costs

Investments in technologies or practices to monitor an organization’s environmental exposures.

Internal failure costs

Expenditures incurred to address problems that arise within the company, arising from negative sustainability-related events affecting any company resource.

External failure costs

Costs incurred to alleviate broader societal and environmental impacts caused by an organization.