We had a blast and learned a lot at our panel last week. Thanks to the 2011 Annual Meeting of the American Accounting Association, I knew the sustainability topic was becoming more popular and our experience during this event proved insightful. Our discussion didn’t just touch the surface of corporate sustainability; people asked real questions and got real answers from experts. Here are a few thoughts I’d like to share.

First, the panel consisted of top sustainability leaders who spend their days working in the field and evangelizing the value of sustainability reporting. The panelists included: Kris Brands (Regis University), Liv Watson (XBRL International), Raef Lawson (IMA), Shannon Diederich (Sigler Communications), and Lara Hussain (Texas Instruments).

Next, as the real benefits of sustainability reporting gain recognition, the movement is gaining more support. Not only CEOs of companies, but also investors are starting to see that a company’s value can be greatly impacted by its corporate sustainability responsiveness. Some investors (mostly pension funds) are taking the issue very seriously by not investing in companies with poor social responsibility records.

As of now, sustainability reporting is voluntary, but many are working to make it a mandate. The International Integrated Reporting Committee (IIRC), an organization that heavily promotes integrated reporting, believes this type of reporting demonstrates linkages between the organization’s strategy, financial performance and the social, environmental, and economic context in which the company operates. When implemented, integrated reporting gives both investors and stakeholders the ability to see how the organization is performing and will even be able to predict future performance.

In the near future we will have to answer the key question: should corporate sustainability continue to be voluntary or should it be mandated? More groups are deeming the need for a mandate saying it’s necessary and not an option. I guess we’ll have to wait and see what Congress decides to do, but for now, continue in your efforts to reduce waste. Give your investors and stakeholders the key information they need to view your company’s corporate sustainability accomplishments in depth.

Finally, if you want to start implementing sustainability at your company, take these three steps:

#1) Get your management accountants more active in incorporating policies to get the ball rolling.
#2) Create a cross-functional team responsible for getting initial “buy-in” from all departments.
#3) Monitor what respective departments are doing to help the company achieve its sustainability goals.

For more information on implementing sustainability at your company check out the Ceres Roadmap for Sustainability.

Patrick

The American Accounting Association (AAA) held its annual meeting last week in Denver. The meeting was attended by almost three thousand accounting professors and accounting professionals with an interest in accounting academics. The conference serves as a premier forum to share information and ideas for accounting higher education. Rivet and I participated in two programs that were very well received.

The first program was held during the Conference on Teaching and Learning in Accounting (CTLA) cutting edge technology program track: How to Integrate XBRL Analysis and Tagging Software in Accounting Courses. The session covered XBRL’s short history, the SEC Reporting Mandate, XBRL corporate applications, and showed how Rivet’s software, particularly CrossView, can be used in accounting courses. Most of the audience had a limited understanding of XBRL until the “Ah-Hah” moment about the power of XBRL swept over the audience. It was like the wave at a Denver football game as the professors realized XBRL’s potential in the accounting curriculum. Rivet’s Raul Varela and Jeff Burns presented a hands-on demo of CrossView Preview, Rivet’s interactive data viewer, which allows you to interact with XBRL filings and also view information exactly as the SEC sees it. This tool is ideal for downloading financial information from SEC filings for financial analysis. A Crossfire Software demo was also shown to explain how easy it is to tag data for the SEC mandate and to perform financial ratio and business analytics for internal financial reporting analysis.

The second program was held during the Strategic and Emerging Technologies Section: Sustainability Reporting: Measuring the Benefits of Going Green. Rivet’s CEO, Patrick Quinlan, moderated this panel. The discussion focused on the emerging importance of sustainability reporting to supplement financial reporting in organizations by creating an integrated report that measures ESG (Environmental, Social, and Governance) performance along side financial performance. The panel participants were Liv Watson (XBRL International), Raef Lawson (IMA), Shannon Diederich (Sigler Communications), Lara Hussain (Texas Instruments), and me. Liv lead a lively debate about organizations that create a green public relations persona while spewing waste out the back door of their factories and damage the environment. The panel discussed how to address this problem and whether the current practice of voluntary corporate sustainability reporting would motivate organizations to pursue business strategies that balance the concepts of people, planet, and profit.

The importance of raising the awareness of sustainability issues in accounting courses is important because future generations will be dealing with its issues. I suggest a mandate like a green Dodd-Frank Act would probably be necessary in the US to achieve sustainability reporting.

While the sustainability movement gains new followers every day, its voluntary global adoption will always be tied to its impact on a company’s financial bottom line. One of the chief benefits of sustainability reporting is how it can be used to integrate financial and non-financial data to deliver a more holistic view of the business.

When this view includes corporate financial performance, as well as corporate environmental, social and governance (ESG) behavior, it provides a confidence boost for savvy investors. Also, it shows company shareholders that the organization has a sustainable, long-term business focus. Accurate information allows stakeholders to see the entire scope of the company’s financial and non-financial data. Thereby, changing the way companies view corporate responsibility and its impact on their bottom line.

I will be moderating a panel at the 2011 Annual Meeting of the American Accounting Association in Denver on August 10, 2011 at 4pm on this key topic. The panel will consist of top sustainability leaders who will discuss integrated sustainability and financial reporting more in depth, and your questions and comments are welcome.

Panelists include:  Kris Brands (Regis University), Liv Watson (XBRL International), Raef Lawson (IMA), Shannon Diederich (Sigler Communications) and Lara Hussain (Texas Instruments).

See you there!

Patrick

Both public and private companies are starting to take an active interest in how  sustainability reporting can help them better connect and communicate with their stakeholders. How often do you think of how your company’s actions affect your city, industry, or even the world? An A.T. Analysis found that companies who were actively committed to corporate sustainability practices during the financial crisis achieved above-average performance during the same period.

Companies such as Dell, IBM and Nike have embraced the initiative to not only create corporate responsibility programs, but to report their findings to the general public. While large companies, such as the ones  just mentioned, have made a powerful impact with increased corporate responsibility, smaller companies can make as big an impact by working together. Truth is you don’t have to have to have a global presence or a huge budget to start taking small steps today. Focusing on social responsibility and sustainability is something that companies of all sizes can do. In fact, sustainability can help your company save money, and find new sources of revenue all while improving your brand image.

While sustainability reporting and increased corporate responsibility have been around for years, (see the efforts the Global Reporting Initiative has done on the subject) the technology to standardize and share this information with a large audience has always prohibited widespread adoption.  Well, times they are a changin’.

If you are a public company in the U.S, you have by now started using eXtensible Business Reporting Language (XBRL) to mark up all of your financial documents, increasing transparency and overall public usability of this data.  The benefits of XBRL - quick analysis, standardized data and increased comparability and transparency – are not just limited to financial information.  In fact, the Global Reporting Initiative along with Deloitte have already begun converting long standing corporate sustainability metrics into this emerging technology format.

We’ll cover this topic more in depth at our 2011 Annual Meeting of the American Accounting Association panel – August 10, 2011 at 4pm. If you’re in Denver, come join us! I will introduce the panelists in my blog next week.

- Patrick