Introduction

Traditionally, (management) accountants were concerned with reducing economic costs and increasing organisational efficiencies to generate better profits and increase market value for shareholders. Today there is increasing focus on meeting the demands of a wider stakeholder group than just shareholders, this includes, suppliers, creditors, communities, society and of course consumers. Therefore, gaining an understanding of the demands and expectations of these stakeholders, and determining how the organisation can meet them, becomes a critical undertaking by management and management accountants. This chapter explores the changing environment of management accounting with respect to sustainability reporting and the critical contributions they make to developing solutions for organisational accountability. In this chapter, we attempt to provide accounting tools and frameworks that encourage (management) accountants to more actively contribute to the environmental accounting debate. Through accounting systems we are able to tell a story about the impact of businesses on the environment and allows businesses (and interested stakeholders) to better understand the consequences of this impact.

Chapter outline

After reading this chapter, you should be able to:

1. Understand the role of management accounting in documenting sustainability practices
2.  Understand externalised costs for which organisations are responsible
3.  Appreciate the role of sustainability value chains and its link to management accounting
4.  Consider triple bottom line reporting and sustainability-related KPIs
5.  Identify and understand environmental costs in organisations.