Introduction to the Research
Discuss about the Diversity And Corporate Response To Sustainability Initiatives.
In the current business industry, sustainable management and development has taken the center stage of organizational success. In a systematic study, Lee, Fraser, and Fillis (2018) denote that small and large scale organizations are not only focused on the success of their businesses. Care is also given to how the business benefits the environment and the community. In other words, focus is given not only on profit making but the society and environment are also considered. In another study, Essig (2018) denotes that even though companies’ benefits from various facets of business development such as economic progress and advancement in technology, they often face criticism on the environmental and societal challenges they create. It is referred to as a triple bottom line concept involving the environment, economy, and the society. These aspects often translate to people, profit, and planet. As a result, most organizations can no longer focus only on financial gains as the achievement without considering the impacts it can pose on the environment.
According to Choi and Ng (2011), most organizations have negative impacts on the environment in a level that varies from one company to another depending on the product or services the company offers. The same study denotes that the ruthless and continuous depletion of the natural resources as well as the exploration of the societies where they are located and operates in generating their revenue results to negative sentiments from the stakeholders. When not considered or managed, there is high possibility that the organization can be dismissed and operations brought to a standstill. In other words, these organizations are currently forced to find ways or adopt strategies that can help in mitigating the impacts. This has resulted into the adoption of more environmentally related strategies to mitigate these impacts. In many cases, these initiatives are communicated though sustainability as pointed out by Swaim, Maloni, Napshin, and Henley (2014, p. 45).
Even though concern is given to the environment, many organizations fail to financially support the procedures and steps required to achieve financial support towards achieving the required level of sustainability. As a result, most organizations either fails to start or do not go through to the end once the necessary strategies are adopted. In a systematic study, Essig (2018) denotes that there are several reasons why failure occurs at this level irrespective of how good are the strategic objectives adopted for the process. Therefore, this study is focused on the need of economic and accounting research necessary to achieve effective sustainability initiatives.
- Structure of Justification of the Proposal
The current business environment is complex and competitive. With advancement in technology, change in the consumer preferences, issues related to environmental and societal concerns, and sustainability efficiency, Sanders, Myers, Gawron, Simmons, and Turok (2018) denote that companies are currently adopting policies that will ensure they remain competitive and effective in the market. The same study denotes that organizations are more focused on tracking social development initiatives with the aim of achieving different goals. For instance, focus is given to enhance the ability of tracking progress against objectives and set targets, and developing greater awareness of broad issues towards environment. Luthra, S, Mangla, S, Chan, F, & Venkatesh (2018) also denotes that it ensures it meets the compliance requirements towards the governance of the its license of operation. They are also focused on enhancing their reputation, identify cost effectiveness, improve the workplace and the moral of the staff, as well as achieving an all-round credibility from greater transparency as pointed out by Zerbini (2017, p. 90)
Problem to be solved by the study
Despite these efforts, full consequences to conduct business is not reflected in the financial statements and accounting reports for most organizations. Corbett, Webster, and Jenkin (2018) identifies that in many cases, organizations are measuring the level of their success and profit making by excluding the bulk of transactional costs from the environmental and social aspects. At the same time, Unerman (2018) points out that the existing limitations on financial reporting methodologies and frameworks in the societal and environmental transactions are not clearly understood. It is because they are inadequately identified or even not reported in a consistent framework in case it is reported. Therefore, there is a need for effective study and analysis on the necessary accounting and economic research in ensuring organizations achieve effective sustainability initiatives. This hence forms the basis for the justification of this study.
- Problem and Research Objectives
The main aim of the study is to evaluate and have a clear understanding on the concept of sustainability initiatives adopted by large scale organizations in respect to accounting and economic research therein. To achieve this aim, the study will focus on the following objectives;
- To investigate the different sustainability initiatives adopted by large scale organizations
- To evaluate the understanding of the management and other stakeholders on the need of accounting and economic research towards sustainability strategies within their respective organizations.
- To establish an effective role of accounting and economic research in pursuing the United Nations Sustainability Development Goals.
- To establish a clear framework for effective understanding of sustainable development
- To outline recommendations that should be taken in adopting sustainability accounting in different organizations.
- Research Questions
In respect to the above objectives, the study will focus on answering the following questions;
- What is the level of understanding of the management of different organizations in the general concept of accounting and economic research?
- What are the sustainability initiatives adopted by the organizations?
- What are the accounting and economic reports adopted by organizations towards sustainability?
- Hypothesis of the Study
According to Essig (2018), the primary weakness of gross domestic product in economic research is that it minimally considers environmental damage and sustainability initiatives. In a study, Sanders, Myers, Gawron, Simmons, and Turok (2018) point out that the challenge of accounting and economic research is ensuring effective development and collaboration frameworks that explicitly converse sustainable valuation procedures as well as the inclusion of different ethical procedures aimed at value to the environment. As a result, the hypothesis for this study will be;
- Null Hypothesis: The aspect of including sustainability initiatives faces challenges as it is complex to measure environment damage
- Alternative Hypothesis: The aspect of including sustainability initiatives does not face any challenge as it is complex to measure environment damage
- Significance of the Study
In the current business arena, concern to the environment has taken a central stage for most organizations. Therefore, sustainability initiatives are mentioned in every stakeholder’s meeting as a goal of the business, governments, and non-profit organizations. However, measuring the level or degree to which the organizations are being sustainable or achieving sustainable growth is complex and challenges many organizations. In a systematic study, Chang and McIlkenny (2017) pointed out that sustainability initiative is one of the major goals for the United Nations Sustainable Development (UNSD). The study is hence focused on providing a resilient knowledge and understanding on the strategic options that can be adopted by the organization in achieving human development and environmental ambitions. For scholars focused on accounting and economic research, the study will provide a clear overview of the relevant accounting practice as well as the principles and concepts of initiatives towards sustainability accounting and research.
- Expected Outcomes
In response to the aforementioned challenges facing the economics of the organization towards achieving a sustainable initiative, this study will provide a drive towards economic accountability and transparency practices. It will proved recommendations to small and large scale organizations to ensure both financial and non-financial data is included in the reporting and management of sustainability initiatives. In many cases, different scholars in different aspects of sustainability initiatives have carried out studies as pointed out by Essig (2018, p. 97). However, little attention has been given on the necessary accounting and financial research to achieve the targeted sustainability goals and initiatives for both small and large scale organizations. The study will thus provide an accounting framework that offers economic guidance to achieve social, environmental, and financial performance at once.
Objectives of the study
For those with responsibilities in the organizations such as the management and leadership in both small and large scale organizations, the study is expected to introduce sustainability accounting as a practical and legitimate response to ensure there is ease of accounting and economic research in achieving sustainability goals within the organizations. In other words, the result is intended to resonance for both economic research and accounting for managers with the responsibility of implementing sustainability policies within the organizations. It will also offer explanatory tools for research on how the economies of scale towards research on sustainability initiatives can be achieved with the aim of assisting on how they can prioritize in the future actions of the organizations as supported by Essig (2018, p. 90). The study will hence add on the knowledge and data base on published information regarding economic and accounting research towards sustainability initiatives within different organizations. In other words, it will act as a resourceful information on studying the evaluation of sustainability policies and initiatives towards the evolving accounting practices as well as in understanding concepts and principles of sustainability initiatives in accounting research.
In considering the sustainability goals of organizations, focus is given not only in creating economic value but also providing services and goods that can enhance the living standards. WarshawskY (2016) also identifies actively engaging in mitigating different social and environmental challenges that they cause though their production activities as a vital sustainability aspect for different organizations. Therefore, there is a need to have a clear understanding on the proactive management sustainability initiatives that can help in delivering an improved service delivery not only to the business but the environment as well.
Sustainable development highlights the importance of making decisions that recognize the connections between actions and effects on the environment, the economy and the society Essig (2018, p. 90). It as well involves long-term thinking with respect to the kind of legacy to be left to the future generations. Corbett, Webster, and Jenkin (2018) acknowledge that short term goals cannot be neglected in favor of preservation and protection, hence economic development cannot be stopped. For economic development to fit within the planets ecological and natural resource boundaries, across connection is required (Corbett, Webster, & Jenkin 2018, P. 262). When senior officials from 179 governments met in 1992 at Reo de Janeiro after watching a series of potentially catastrophic events unfold across the globe, that is; the leak of a poisonous gas from a chemical plant at Bophal, the Chemobyl disaster, the hole in the Antarctic ozone layer, leaking chemical dumps, growing fears regarding chemical contamination and conflicts over the decreasing
The society, business and environment are the key players for sustainable development as pointed out by Swaim, J, Maloni, M, Napshin, S, & Henley (2014, p. 90). Economic factors such as industries and companies compromise the business aspect of the sustainable development. The government, citizens and non-governmental organization make up the social aspect. Finally, environment is considered the stakeholder. The business and society can be seen as part of the natural environment. The societal groups raised the environmental and social issues while business actors raise the economic issues. Globalization has led to all the dimensions of sustainable development becoming equally important to both the society and business. Integration of sustainability performance to business practices enables companies to reduce risks and increase profitability. The environmental and social performances motivate companies to practice environmentally and socially sustainable development along with economic development.
Hypothesis for the study
For sustainable development, Orenstein and Shach-Pinsley (2017) denotes that there are relevant sustainability initiatives, documents and agendas at different level. Most of the sustainability initiatives focus on economic, social or environmental sustainability. Depending on the agenda, the initiatives may focus on either 2 or 3 dimensions. Different environmental, social economical and initiatives and documents are relevant to sustainable business development and the core missions. Many of the sustainability initiatives started as macro-level initiatives. Corbett, Webster, and Jenkin (2018) denote that a macro level initiative addresses broader sustainability debate at regional, national and global level. Global level initiatives are increasingly becoming important due to globalization and multi-national enterprises.
Environmentally sustainable development is well recognized and has well defined policies and become a start point for the global and national environmentally defined policies as pointed out by Lee, Fraser, and Fillis (2018, p. 7). Many policies have now broadened the concept of sustainable development initiatives to cover both the economic and socially sustainable initiatives. The main purpose of initiatives is to provide standards and guidelines to businesses for developing policies; measures, reporting, and implementation of corporate responsibility and improve corporate environmental, social and economic management.
According to Essig (2018), one cannot manage what cannot be measured and sustainability indicators are the main tools used in measuring sustainability in sustainable developments. Financial stakeholders, non-financial stakeholders, the public, buyers and biosphere are main driving forces in the pressure for business environmental performance measurements. Sustainability initiatives include the sustainability indicators which refer to the understanding of what needs to be done, what we need to achieve and how far we are from where we want to be. The indicators alerts one of the problems involved and recognizes ways of solving them before they become a disaster. There are different characteristics of sustainability indicators at all levels:
The indicators are intended to measure the 3 dimensions of sustainable development that is environmental, social and economic. All indicators can be used to measure economic, environmental and social dimensions. More emphasis is on the environmental factors. Most companies use the corporate responsibility reports to include information on economic, environmental and social performances. Corbett, Webster, and Jenkin (2018) provide a summary of different types of indicators and their research on applicability to environmental, social and economic issues. Descriptive indicators describe the states, pressure and impact of responses while qualitative and quantitative indicators describe the statement facts of the situation. They apply to environmental, social and economic issues in sustainability developments. Another indicators is performance, it measures the actual situation with targets and compare to the progress made towards achieving the set targets during the initiatives that are measured. Accounting indicators is also used for the purpose of both internal and external reporting. Its main focus is on transportation tracking, liability management and efficiency in waste production and disposals. Another indicator used is economical which values the external environmental and social costs for the sustainability of the initiative. These indicators evaluate the performance of the organization and are very important in determining the degree of sustainable initiative.
- Quantitative and qualitative indicators
Drive towards economic accountability and transparency practices
There are similar economic, environmental and social accounting frameworks that measure the different framework that measures input and output of basic accounting using metrics. Indicators may measure the turnover, available employees and emissions of gases in the environment. However, Essig (2018) states that sustainability issues such as social aspects are not quantifiable require qualitative descriptions. It makes the social indicators to defer from environmental and economic indicators. For example, it is hard to quantify aspects such as happiness which are in sustainability developments. Quantitative and qualitative indicators can be used best to encompass significant issues of sustainability (Ben-Amar, Chang, & McIlkenny 2017, p. 369).
- Absolute and relative indicators
Absolute figures provide information on the size of an impact, value or achievement and the contribution to overall effect of the sustainability development (Carpenter 2013). Relative figures allow comparison between absolute figures in contribution to the overall sustainable development. These indicators measure the eco-efficiency, socio economic and environmental performances. There are three types of these indicators which include productivity, intensity ratio and percentages. The productivity indicators refer to impact of value. The increase in ratio value indicates and improvement in amount of value received. The intensity ratio refers to impact per unit of the value and a decline in the ratio indicates performance improvement. Percentage refers to two like units of the value of the economic, environmental and social sustainability development. The eco-efficiency links the dimensions of the sustainability development for example the economic and environmental impact.
According to Romero, Lin, Jeffers, & DeGaetano (2014), a conceptual framework aimed at guiding practitioners and researchers in accounting research and sustainability initiative is a vital first step as a research agenda for this study. In another review, D’Souza and Taghian (2017) denotes that there are various notions of organizational practices towards sustainability and the role of accounting research but there is a lack of a common language. Such a framework is vital in directing emerging areas of accounting research for many facets of organizational management. Therefore, this study will adopt a descriptive research methodology.
Zeemering (2014) denotes that descriptive research is essential for researchers with the desire to learn more about a concept in regard to the perception of the participants. In the process, observation, survey and case study analysis is adopted with the aim of depicting accurate participation and data collection. Observation involves watching the subject in its natural environment (Ballou, Casey, Grenier, and Heitger 2014, p. 5). Therefore, the study will adopt the three aspects of descriptive study to collect valuable information. The method will also be essential in formulating the secondary objectives on the various aspects affecting the sustainability initiatives of the organization.
Through descriptive statistics, the study will report summary of data from other reviews on the concept of sustainability initiatives with the aim of identifying the challenges facing organizations and the strategies to solve the challenges in the process of adopting sustainability strategies. Data reports on mode, median, mean, percentages, and variances will be used in comparison of different reviews, an aspect that will also assist in identifying possible research gaps that call for more studies.
Practical response towards achieving sustainability goals
For this study, observational study, interviews and surveys will be used to collect relevant data about economic and accounting research dynamics in the process of adopting sustainability strategies within the target organizations. The data collected will be used for analysis on the basis of the research questions and objectives. The results will also help in recommending effective strategies that can be adopted by both small and large scale organizations to help in meeting their environmental and societal goals in the process of working towards achieving their business objectives. According to Choi and Ng (2011), corporate social responsibility is currently treated as an integral part of success for every organization with the desire to remain competitive in the global business environment. The study will then conduct a survey using open-ended questionnaires targeted to the human resource officials of different organizations. The questions will focus on collecting data on the sustainability initiatives adopted within their respective organizations as well as possible economic research challenges that comes with it.
The study will focus on descriptive statistics as a justified method of categorizing the facets of the study into description, improvement, prediction, and explanation. These facets are essential in meeting every stage of the research process, an aspect that will be effective in accepting or rejecting the hypothesis. It is also essential as the experimental, casual-comparative, experimental, and correlation aspects will be used in the stage of data analysis to find out the effective answers to the research questions. The primary research method for this study will also adopt the use of content analysis as well as field studies due to the different notions of what is involved in integrated reporting. The strategy will help in analyzing the actual reports in regard to different sustainability approaches organizations adopt as well as the economic impacts that results from the strategies adopted.
In a systematic study, Choi and Ng (2011) point out that descriptive statistics is essential for yielding rich data that can be used to adopt very vital recommendation in solving a challenge. In this case, it is clear that organizations are no longer focused only on the profit they get from their business. Environmental concern has taken a center stage as they are forced to finds solutions to the environmental challenges they cause to the environment. Using descriptive statistics is justified as it categorizes the facets of the study into description, improvement, prediction, and explanation. These facets are essential in meeting every stage of the research process, an aspect that will be effective in accepting or rejecting the hypothesis. It is also essential as the experimental, casual-comparative, experimental, and correlation aspects will be used in the stage of data analysis to find out the effective answers to the research questions.
In another study, Toole and Carpenter (2013) point out that measuring trends in every data process is essential in making comparisons to ensure effectiveness and accuracy of study. For this case, data comparison will help in understanding the trends of sustainability initiatives adopted by different organizations and the possible challenges in relations to economic research. The comparison will also be vital in ensuring such trends helps in adopting strategies that can be timely and objective while considering possible developments that comes with it.
Conclusion
As mentioned earlier, there is a need for comparison of data as well as results from different case studies from other scholars in the similar line of sustainability. In other words, there is a need for the study to draw comparisons between the respondents and statistically identify the different opinions from the survey results. At the same time, SPSS for statistical analysis will be used to analyze quantitative data and measure the different statistical variables that are relevant to the study. For the case of quantitative data, cases study analysis will help in understanding the sustainability aspects that have been identified by other scholars while studying different facets of the same topic.
Like in many other studies, some challenges are expected in terms of standardization of the research. Chang and McIlkenny (2013) denote that what seems to be a streamlined process of study needs to be researched and addressed as they often do not necessarily span to be the actual implementation. In other words, it is often challenging to translate the research work into the actual interpretation and implementation at different stages as supported by Jenkin (2018). This is expected to occur at the design, data collection, and analysis stages.
In the process of study, there is a need to adopt survey questions through questionnaires and interview with targets to specific organizations. However, getting institutions to accept a study process that targets at their overall performance is often a problem as most of them might be afraid of the consequences that may follow. This study tends to be sensitive as it focuses on the environmental aspects of the organization in testing and evaluating the economic effectiveness of the sustainability initiatives the organization adopts.
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