Voluntary Sustainability Reporting: A Case Exploring Ethical, Regulatory, and Strategic Considerations

CASE DESCRIPTION The primary subject matter of this case concerns ethical, regulatory, and strategic considerations that may arise relating to voluntary sustainability reporting by business organizations. The case explores the issues from the perspective of accounting professionals and corporate decision makers involved in the reporting process and presents ethical dilemmas that must be addressed. Secondary, the case provides opportunities for students to gain knowledge and understanding of an important global reporting trend and to research standard-setting and regulatory efforts relating to the development of sustainability reporting standards and guidelines. The case has a difficulty level of four to five and can be taught in approximately 40 minutes. The case can be assigned as an individual or group project. Approximately two hours of outside preparation is necessary for students to address all the questions in a group setting. The case can be utilized in an upper division accounting course to help students gain awareness of an important global reporting trend and to enhance students' understanding of ethical issues that may arise relating to sustainability reporting. The case can also be utilized in an accounting ethics course focusing primarily on ethical concerns of accounting professionals, or in a graduate course focusing primarily on the research and analytical aspects of the case. This case and the related independent questions can be utilized to enhance students' understanding and awareness of ethical issues and related professional and regulatory requirements, as well as their analytical, research, and communication skills. CASE SYNOPSIS Sustainability reporting has become an important global reporting trend. While in some countries, sustainability reporting is required by public companies, in the U.S., reporting is largely voluntary. Currently, the majority of large U.S. companies and some small and midsize companies voluntarily issue sustainability reports. Even though global sustainability reporting guidelines such as those issued by the Global Reporting Initiative (GRI) exist, and new guidelines such as those currently being developed by the U.S.-based Sustainability Accounting Standards Board (SASB) are emerging; the scope, detail, and format of the information presented in formal sustainability reports vary considerably among companies. Many companies choose to report information only on selected environmental and social issues and provide primarily qualitative information. Accounting professionals can provide important support for sustainability reporting, but may encounter ethical dilemmas that need to be addressed. This case focuses on ethical concerns encountered by a new staff member of the sustainability reporting group of a fictitious company. The case scenario includes highly optimistic projections relating to environmental issues made by the company's sustainability director that pose concerns for the new staff member. The case enhances students ' awareness of the sustainability reporting trend and the potential ethical concerns that may arise, and requires consideration of pertinent professional ethics rules and analysis of related factors. The suggested assignments include a set of ethics-related questions and a set of questions requiring additional research and analysis of sustainability-related standards, career-opportunities for accounting professionals, and the benefits and challenges for reporting companies. The case can be utilized in an accounting ethics course or in another upper division financial or graduate accounting course, and may enhance students ' analytical, research, and communication skills, as well as their awareness of related ethical issues and knowledge of professional ethics rules. BACKGROUND In its 1987 report, the World Commission on Environment and Development (also referred to as the Brundtland Commission), formally defined sustainability development as a "development that meets the needs of the present without compromising the ability of future generations to meet their own needs" (United Nations, 1987, 37). …