The term corporate social responsibility (CSR) emerged in the 1990s. Today, this term has largely been supplanted by the term sustainability. The sustainability of a business refers of course to its longer term economic prospects, but also to social and environment sustainability. A CIMA (2010) report on sustainability highlights how some emerging market countries are more focused on sustainability reporting than many leading economies. According to the report, South Africa scored best on corporate level sustainability reporting among the BRICS 1 economies. This is attributed to South Africa’s broad corporate governance code, which encompasses themes like leadership, sustainability and corporate citizenship. The CIMA report provides some examples of what South African firms are doing. One textile company, Impahla Clothing, which is a supplier to sportswear giant Puma, has developed a rigorous sustainability report. Puma were so impressed with the report that they are asking all suppliers to voluntarily report in a similar way. Impahla Clothing is a private company, with 176 employees according to its 2009 sustainability report – which extends to more than 50 pages. The report provides performance data under headings like occupational health and safety, environmental management, governance and risk management and human rights. For small business, the company seems to be leading the way.

Questions 

1 Can you think of some basic management accounting techniques/principles which may be useful when incorporating sustainability into business decisions?

2 Do you think any sustainability initiatives directly impact profits?