Long response questions:from Gray (2006)

Accounting By: Hoggett, John Robert, 1948-, 9^thed. 2015.

Relate the disclosure of the Sustainable Development Goals to the current business issue of social and environmental accounting and accountability.

Link to article:https://ebookcentral-proquest-com.ezproxy.uow.edu.au/lib/uow/detail.action?docID=4804601

Gray (2006, p82) suggests that "there is a major disconnect between the implication of global data we have reviewed [on sustainability] and the partial and localised data chosen to constitute the social, environmental and sustainability reporting." He goes on to say that if "the global data speaks truthfully and, extrapolating, the mass of corporate activity is actually highly unsustainable, then companies need to reflect this so we can discount the empty rhetoric and turn pressure on to governments to undertake radical reconstruction." Gray, R. 2006 "Does sustainability reporting improve corporate behavior?: Wrong question? Right time?" Accounting and Business Research, Vol. 36, Supplement 1, pp65-88.

Required:

1.Explain what Gray means by the above statements.

Global data (see pages 67-71) would suggest that the world is in dire straits and nowhere near achieving sustainability. Sustainable development has been defined as:

...development which meets the needs of the present without compromising the ability of future generations to meet their own needs (UN World Commission on Environment and Development, 1987 as cited in Gray, 2006, p67).

While sustainability is a global and spatial concept, and difficult to apply at the organisational level (p67), Gray argues that we need to know something about the collective sustainability of economic units and economic activity as a whole. As such there is a need for some sort of sustainability reporting.

Gray has been researching and writing in this area for decades, and comes to the conclusion that existing sustainability reporting (or TBL reporting, or Social and Environmental reporting) is of little substance. He cites Greenpeace Business, 2005 (Gray, 2006, p 73)...

...the vast majority of this reporting is little more than a selective presentation of highlights. It is a rare business that presents a balanced warts-and-all analysis; it is rarer still to find one that is actually responsive to the shortfalls in social or environmental performance.

Further, in most cases these types of disclosures are public relations exercises, signals to investors about how management has managed risk (Gray, 2006, p80), or is only undertaken by business organisations with a 'business case' for disclosures (Gray, 2006, p79).

Gray suggests we need to move past the rhetoric of a "win/win" situation (in which business and sustainability can sit comfortably together) (Gray, 2006, p81) and get serious about sustainability and sustainability reporting. At the very least this could be facilitated by mandatory reporting and accountability (Gray, 2006, p81). Fundamentally, companies need to start disclosing the reality of the situation, and use this to pressure governments to undertake radical restructuring of economic organisation" (Gray, 2006, p82).

This requires a debate about the real sustainability emergency and the form of capitalism that is commensurate with sustainability (Gray, 2006, p82). He calls for a redefinition of "shareholder value to include something other than the making of even more money for people who already have too much. A shareholder value that embraced compassion, respect, trust, life, air, water, safety, nature, beauty, sunshine etc might be quite a nice idea?" (ibid).

2.Discuss the role, if any, that accountants can play in the disclosure of corporate activity especially as it relates to the issue of sustainability.