Sustainability and Biodiversity in Business

Introduction

In the present context, each of the businesses has made the recognition that longer-term development of sustainability needs a good performance of environment and social performance, including aspects of business dissertation help. It is argued that biodiversity is linked totally with a good environment, social, and economic performance. When businesses address environmental issues than they generally face risks associated with costs. In the present context, the addressing of the environmental issues could be taken as a competitive advantage to reduce waste, evade pollution and even provide better services and products (Loorbach & Wijsman, 2013). This study will give focus on sustainability and biodiversity in the business firm. This study will even describe the role of an accountant in sustainability and biodiversity wherein accounting theory will also be described in detail in this study. This study is significant as very little research is made over the biodiversity in the business but there are also challenges associated with the work. The lesser data had made it difficult for the research to attain detail knowledge over the topic wherein descriptive data had been collected using journals, books and articles.

Sustainability and Biodiversity

The concept of sustainability is linked to the idea of sustainable development. As per the United Nations Brundtland Commission, sustainability is the development that meets the needs of the present individuals without compromising the future generation’s ability to meet their own needs. It is sustainable growth, which encompasses a business model that generates value consistent with long term preservation and enhancement of environmental, social and financial capital. As per the Chartered Institute of Personnel and Development, sustainability in the organization is the principle of enhancing societal, economic and ecological systems within which a business operates (Loorbach & Wijsman, 2013). Sustainability implies a continuous focus on the social, economic and environmental performance. This concept has related to the growth of triple bottom line accounting. Organizational sustainability is highly linked to organizational culture rather than specific procedures and policies. It is noted that the organization is developing a sustainability policy. Still, such policies are linked with developing a culture of sustainability using policies that highlight the significance of the environmental, social and financial performance. Corporate social responsibility is found to be internalization by a company of social and environmental effects through pro-active prevention of pollution and assessment of social impact so that there is the anticipation of harm and benefits are optimized (Lambooy & Levashova, 2011). Corporate social responsibility leads to social justice in the workplace and human rights in the host countries.

Business is linked with survival and for its survival, it needs to generate profits. Biodiversity is the species variety in an ecosystem which permit the balance of life on earth to make sustainability. Biodiversity and the life support system which is provided are generally understood poorly. It takes into consideration all the ecosystem services wherein society and economies are highly dependent but is overlooked in the corporate world. The devastation from the damage of biodiversity is increasing the issues with the EU’s business and biodiversity platform which leads the charge (Overbeek & Harms, 2011). It is analyzed that there is a dangerous decline in nature, which is even called transformative change, which saves the biological system.

Sustainability and Biodiversity in Trade

Sustainable economic growth is one of the major priorities for each of the companies to expand, transform the economy and attain development advantages. However, if the growth is left unchecked, then it can possess a damaging impact on the environment as well as natural resources, which would act as a negative externality for the attainment of longer-term objectives. Since the world population, as well as production, is increasing continuously, the major issues are faced by both living and non-living resources, which endanger the lives of the current and future generations (Adrain, 2015). Sustainable economic growth will thus become sustainable when it is friendly with the environment as well as with people.

Sustained speed of growth of the economy, which is even sustainable, is the means to prosperity for the global community. Sustainability is the enlightened approach and central pillar for the trade, environment and development. Trade could be taken as an enabler to attain environmental goals. The investment and trade in biodiversity linked products are increasing in a pacer manner to reduce biodiversity’s overexploitation, which even enables the creation of sustainable economic sectors, which leads to growth and sustainable trade, consumption pattern and production. In the present context, there is wider recognition in the business regarding economic and financial success, which is linked directly or indirectly with social and environmental performance. Although, not as mainstream thought but each of the companies are giving attention towards the corporate social responsibilities (Lambooy & Levashova, 2011). This practice has helped the company to address mainly three dimensions of sustainability which includes social, economic as well as environmental aspects which are also considered as the triple bottom line. There are various companies like ING bank which have made adoption of the slogan, which includes planet, profit and people into the promotion of such an approach. The corporate development is mainly linked with sustainability, which includes sustainable business, sustainable development and sustainable finance. Moreover, it is also stated that biodiversity is not the addition of corporate social responsibility but is an issue in which companies need to take it as an integral part of corporate social responsibilities and sustainable programmers.

However, biodiversity also leads to issues that are a part of the environmental management needs of companies. For most of the companies, the environmental issue is generally linked with risks. When the company doesn’t adequately address the biodiversity than the position of the company in the marketplace as well as profitability could even be threatened (Adrain, 2015). There could be risks and challenges associated with a legal license to make its operation, make disruption in its supply chains, decline the brand image, a boycott from the consumers, and the non-profitable campaigns. Apart from that, it is also reviewed that there can be a higher chance that fines, and third-party claims would be charged for the damage of the environment and future liabilities of the environment (McKinsey, 2011). The biodiversity risk also includes the lower rating of the company in the financial market and a decline in staff’s morale and reduction of productivity.

The management of biodiversity risk is one of the key parts of the business. When the risks of biodiversity are managed effectively, then risk could be changed into a mutual advantage for both biodiversity and business, it is not tough for companies to make the integration of biodiversity issues into newer operations and projects. For instance, the energy sector could relatively link biodiversity with the framework which could be applied in production and exploration which notably possess a social and environmental influence on assessment. Various companies are addressing biodiversity aspects to maximize opportunity. Group biodiversity standards for operations are being published using clear strategy and action plans. The restructuring of the investment practices towards the triple bottom line of sustainability and towards a new portfolio of biodiversity business investments.

Account Contribution to Sustainability and Biodiversity

Accounting for sustainability is important for greening corporate and is subjected to growing literature. The accounting for biodiversity is also essential for managers mainly on those sectors which affects the natural habitats. There is increased demand of the natural resources and even increased competition leads to increased risks which would lead to vulnerable and undistributed ecosystems. The protection of the ecosystem is vulnerable and undistributed ecosystems. These ecosystem protections are one of the critical sustainability problems and the loss of biodiversity is deplored widely. The address of the biodiversity and sustainability issues however influence the perception of the stakeholders (McKinsey, 2011). the reporting on biodiversity influence generally determine the corporate image and the information in the sustainability report even helps in bring greater compliance and transparency with reporting standards. It is stated that those organization which practice sustainability are more viable in repairing of image, marketing ethics and even normalization of the corrupt practices. corporate accounting mainly refers to justifications of the performance and actions towards stakeholders for whom the organizations are accountable for. Even though, Accounting for biodiversity stay understudied, major issues is represented which needs to be reviewed for increasing transparency and actions control and for seriousness in problems of biodiversity (McKinsey, 2011).

The accounting profession is a response to the new market opportunity which includes new demands which result in nature of business activities accountants gives transparency which is significant and required for the stability of the financial system and even for short term investments to sustain the growth of the economy(Van Tulder & Van der Zwart, 2006). Accounting is termed as a natural starting point wherein measuring pollution, global warming, and resource depletion would correct the failure of the market. It would drive a sustainable economy along with greenwashing. Business generally performs in an effective manet when reporting is done on sustainability matter, which is more likely linked with long-term risks and even builds resilience in business models (TEEB, 2010). Generally, it is seen that accountants perform corporate reporting to cover the long-term risks. The financial performance is not only enough for determining how a company would develop long-run profit. The non-financial information, which includes sustainability information, executes an essential role in solving the short term which recently dominated analysis and valuation of finance. It is the accountant who could assist the company in connecting and integrating non-financial and financial information. It is also an accountant who focus on long term value creation and corporate governance. Although companies are the main drivers in the change of economy and it possesses a role in geopolitics and capital, the accountant helps in making business more sustainable and diversified (Van Tulder, & Van der Zwart, 2006). They bring sustainability in the strategy, decision making and reporting process of the company.

Furthermore, the accountant also gives independent assurance to mitigate the needs of the stakeholders for corporate information. They possess skills and is abide by the global standards to enhance the trusts. Accountants enable the business to attain their sustainability by acknowledging areas for the enhancement of the internal decision-making process.

Accounting Theory

Positive Accounting Theory

Positive accounting theory, which is also known as a practical approach, looks upon the current happening in business, which is linked with cold and hard statistics. Such an approach is used regularly in bookkeeping and collection of data. It is the positive accounting that scrutinizes the real-world company’s transactions and even compares incoming with outgoings to make identification of discrepancies. This approach permits the accountants to have a look over whether the business makes or loses the money. The theory gives the accountants with a framework that predicts how the company accounts for the transaction, which goes forwards. As per this theory, a company assists individuals to manage their finances (Mintz, 2014). When corporate growth permits the company to enhance shareholders' dividends over older dividend payments, than positive accounting theory would state that corporate growth increases the stockholder dividends.

Positive accounting theory has increased the understanding of different accounting phenomena as well as issues. It has even made a linkage between stock return, management financial incentives and accounting number. This theory focusses on management’s motives for the financial reporting choices by the usage of economic models and statistical processing when it possesses agency costs and asymmetry information. It even tries to have an in-depth explanation over the accounting choices as a part of the overall needs of the firms to decline the costs of capital and other various contracting costs, which applies methods and techniques through economics (Overbeek & Harms, 2011). The opportunistic attitudes and manager’s behavior and its impacts on the accounting policy are investigated in positive research which led to empirical studies on the earning management. The positive accounting studies check if manager change accounting methods or accrual measures to minimize the costs of violating the covenants of bonds, which is written according to accounting numbers to enhance the values of earning- based bonus according to compensation contracts and even make the reduction of the likelihood of implicit taxes. The positive researcher has established newer significance from the literature of economics which helps in analyzing implications of efficient market hypothesis for disclosure regulations and even it investigates stock price effects in accounting activities.

Normative Accounting Theory

Normative accounting theory is unlike positive accounting, which guides policymakers on what needs to be done through theoretical principles. It gets started with theory and make the deduction of the policies (Kolk & Van Tulder, 2010). Normative theory executes the events in the future whereas positive accounting looks at the previous data. It is commonly applied in the firm’s marketing plans, which aims to add to what future companies will look financially and even advice on the ways to plan events. This theory figures out about the principles applied to each of the situations, the normative accounting even gives various choices. A normative accounting theory describes accounting management, accounting procedure, and financial reports into considerations (McKinsey, 2011). This theory is viewed as the special deductive theory’s cases. The deductive theory, which begins with the assumption of goals and deduces the accounting process, is thus labeled as normative theories. Thus, it can be stated that there are two major elements in normative theory, which includes deduction and goal assumption.

Green Accounting theory

The growing seriousness of environment and social crisis in past two decades regarding green accounting have increased due to serious development to reduce stronger criticism of conservative accounting which ignore social and environmental objects which are linked with corporate entities in the process of accounting. Green accounting theory brings a major shift in the accounting and corporate philosophy. Although, other accounting theory and information have always been accused of being triggered for the increase in the social and environmental crises, the development of green accounting underlie changes and transform conservative accounting practice towards the green accounting practices(Patelis, Keenan & Pryce, 2011). Green accounting is a part of environmental and social accounting which review that accounting practices are highly environmentally friendly. Green accounting integrates the financial accounting, environmental and social accounting in the accounting process to generate relevant, complete and reliable information of accounting and even benefit parties in making of the decisions to evaluate the corporate entity (Thornton, 2013). Green Accounting is a new branch of science in accounting which possess wider nature than social, environmental, social and sustainable accounting. This accounting brings objects, reality, actions and transactions which occur in human environment. The Accounting for land, plants, forests. Air, atmosphere, carbon, corporate social responsibility, sustainability development, biodiversity and other are all part of the green Accounting (Thornton, 2013). The green accounting means accounting which loves, soothes, greens and even preserve the corporate business and profits as it takes all aspects of environment and society in the process of accounting.

Green Accounting theory and practice in Corporate organization

According to Overbeek & Harms (2011), the development of green accounting has emerged through practices and accounting development is a pragmatic affair. Accounting procedure is developed without any theory and the accounting’s origin doesn’t safeguard the discipline from attaining general theory to direct the practices. The green accounting theory doesn’t suggest regarding no development before practice as the practice is termed as the desire to guide the actions to attain predetermined ends (Patelis, Keenan & Pryce, 2011). It is even believed that theories and ideas are important in enlightening as well as offering direction to the pragmatic accounting tasks. The green accounting needs to be constructed, practiced and even dedicated not for corporation interest and for stakeholders but even for interest of stability of natural environment and society welfare. The green accounting is even seen from perspective of religiosity and spirituality and stated that green accounting love and soothes the universe and human and is even termed as Love accounting. The practice not only attained from beliefs and ideas but even determine them (Adrain, 2015). The relationship is present between the accounting practice and theory as difficult and impossibility prevails while performing accounting. It is thus stated that Green accounting is essentially a newer form of accounting which not only gives emphasis on the accounting process like transactions, financial events but also on the transactions, social events and on environmental events. In fact, the accountants should also develop the habit of making usage of green accounting to attain success.

Conclusion

Biodiversity and sustainability play a major role in securing a reputation and gaining profitability. Although there is a very less internal interest of companies over biodiversity, greater attention is given to the external parties regarding sustainable performance. Companies are found capturing the attention of the stakeholders on environmental and social issues by publishing sustainability reports where it shows its commitment and outline activities which it has taken to safeguard environmental pollution, prevention of human rights, and various other factors. The main barriers which prevent investment in biodiversity are the shortage of information and well as uncertainty regarding the activities’ impacts. It is found the companies don’t produce detail information on biodiversity. The companies must build transparency over the data as it can assist the investors as well as companies in generating effective business planning. There is a major role of the accountant in serving biodiversity and sustainability in business as they possess the capability to acknowledge the data and ensure that business attains resilience. The usage and application of green accounting system could be highly effective in solving different sustainability and biodiversity issues.

Recommendation

Since the accountant plays a major role in embracing sustainability challenges, it is the responsibility of the accountant to give guidance to the organization towards attaining sustainability and enhance biodiversity. It is recommended that an accountant should identify the trends which influence strategy, performance and business model of the organization and integrate the natural and social problem of capital. It is also recommended to assists the benefits by dealing with social and environmental problems. The accountant should even organize an internal system to ensure things to be measured and managed and even should link strategy for the creation of stakeholder’s values. They should even drive effectively by the reduction of waste and controlling the expenses and giving credibility to data, which is produced using effective governance. If the accountant performs their duty in a dedicated manner, then it can save the planet.

References

Lambooy, T., & Levashova, Y., 2011. Opportunities and challenges for private sector entrepreneurship and investment in biodiversity, ecosystem services and nature conservation. International Journal of Biodiversity Science, Ecosystem Services & Management, Vol. No. 7, No. 4, pp. 301-318.

Loorbach, D., & Wijsman, K., 2013. Business transition management: exploring a new role for business in sustainability transitions. Journal of Cleaner Production, Vol. No. 45, pp. 20-28.

Mintz, S., 2014. Accounting for the Public Interest, Perspectives on accountability, professionalism and role in society. London: Springer.

Overbeek, G., & Harms B., 2011. From sponsor to partner: NGO–business alliances that support nature conservation in the Netherlands. Journal of Integrative Environmental Sciences, Vol. No. 8, No. 4, pp. 253-266.

Patelis, C.N, Keenan, J. & Pryce, V., 2011. Green Business, Green Values, and Sustainability. Routledge. New York.

Thornton, D.B., 2013. Green Accounting and Green Eyeshades Twenty Years Later. Critical Perspective on Accounting. Vol.24. pp 438-442.

Van Tulder, R., & Van der Zwart, A., 2006. International Business-Society Management – Linking corporate responsibility and globalization. London and New York: Routledge.

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