Abstract
This chapter offers a blueprint for the integration of financial, environmental, social, and governance reporting, an emerging practice that has profoundly changed the way organisations develop strategic plans, approach decision-making, measure success, and manage risks in the twenty-first century. Overlooked in the act to prepare a traditional balance sheet are the 80 % of a company’s assets and liabilities, including social and environmental, that conveniently fall outside the scope of modern accounting. In this chapter, we ask the question, why have we continued to take an “unbalanced” approach? We envision a future when a balanced sheet, renamed the value statement, captures the financial, social, and environmental conditions of a firm over multiple periods of time and this information is further supported by a statement of change in stakeholder’s equity (rather than stockholders’ equity). By quantifying assets, liabilities, and performance related to all forms of capital, businesses worldwide are leveraging Integrated Bottom Line (the analysis and disclosure of financial, social, and environmental assets and liabilities to internal, and external stakeholders of a firm) to achieve long-term value creation, innovation, and competitive advantage. IBL goes beyond an accounting practice to become a catalyst for sustainable management solutions, risk management, and stakeholder engagement. To help demonstrate this transformation of performance measurement, the information within this chapter reviews the evolution of integrated reporting, the need for more involvement from accountants to go beyond a myopic focus on the bottom line to enabling shared value through evidence based management, and a review of enabling organisations. The chapter concludes with a call to action for business schools and business organisations to work together at the intersection of integrated reporting to develop solutions for tomorrow’s measurement problems.
To get all businesses involved in solving the world’s toughest problems, we must change the accounting rules.
Peter Bakker, President of the World Business Council on Sustainable Development, at the United Nations Conference on Sustainable Development, Rio + 20, 2012
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Sroufe, R., Ramos, D. (2015). The Un-balanced Sheet: A Call for Integrated Bottom Line Reporting. In: O'Riordan, L., Zmuda, P., Heinemann, S. (eds) New Perspectives on Corporate Social Responsibility. FOM-Edition. Springer Gabler, Wiesbaden. https://doi.org/10.1007/978-3-658-06794-6_13
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