Essay on Incorporating Sustainability Issues in Financial Reporting

            In recent years the corporate social responsibility (CSR) & sustainability approaches have gain popularity in the organizations because the organizations have realize that through these activities their efficiency and performance increases. In retail industry sustainability approaches not only allow corporation to provide best services to the customers but also allow them to protect the environment. Due to the increase in suitability activities of the corporation it is important to include the sustainability issues within the financial & accounting reports. The Financial reports provide the information about the profitability, efficiency and liquidity position of the corporation. They normally does not discuss the suitability issues (Haskin and Burke 2016).

        In the business studies the intuition usually taught how the profit and financial performance of the corporation can be enhanced. The financial studies provide information regarding increasing the value of company’s securities and managing other financial activities. However over the years it has become important to include environmental and social aspects into the studies so that the financial students have clear idea about these activities and how the sustainability issues can be mentioned in the financial reports. Since sustainability approaches have their own costs including the information of the sustainability activities in the report will also enhance the credibility of the reports (Haskin and Burke 2016).

        In retail industry the suitability issues matter a lot because they are directly linked with the satisfaction of the customers. Therefore the retail industry implement various activities to increase customer satisfaction and protecting the environment. When the sustainability activities are going to be included in the financial reports than huge amount of individual will get awareness about the corporation sustainability activities and how it is providing benefit to the society. It means that the value of the business will enhance and the corporation will get the opportunity to increase its sales.

        The benefit of including the sustainability issues in the financial reports is that it will provide significant amount of information to the investors and stakeholders of the corporation. The investors will get the idea about the suitability activities and how the corporation is providing maximum benefit to the society. The credibility of the financial reports will further increase and the corporation will able to justify the cost that occurs in the suitability activities. Overall there are many advantages which the retail corporations can achieve by including the sustainability issues in the financial & accounting reports (Camilleri 2015).

        The issues which the corporation can face after including sustainability information in the report include excess time which will be incurred in the preparation of the report. It is obvious that first all the information regarding the sustainability activities has to be gathered and then will be analyzed to check its validity and reliability. After that it will be included in the report. Moreover the employees have to be guided regarding how information will be included in the report. It means that the not only the process is time taking but also increase the cost of the reporting process as well. However if the cost benefit analysis of this situation is done then it can be said that the benefit of including sustainability information in the financial reports is way more than its cost (Camilleri 2015).

        If all the above discussion is summarized than it is evident that in retail industry sustainability approaches not only allow corporation to provide best services to the customers but also allow them to protect the environment. Due to the increase in suitability activities of the corporation it is important to include the sustainability issues within the financial & accounting reports.

  References of Incorporating Sustainability Issues in Financial Reporting

Camilleri, Mark Anthony. 2015. "Valuing Stakeholder Engagement and Sustainability Reporting." 18: 210–222.

Haskin, Daniel L., and Megan M. Burke. 2016. "Incorporating Sustainability Issues Into The Financial Accounting Curriculum." 9: 49-56.