Economic Dimension of Sustainability Accounting
In the past, both large companies and SMEs were often ignoring environmental issues and their environmental footprint. Over the past few years, sustainability accounting has received increased attention and it is playing a crucial role in the SME sector, thus contributing to sustainable development through implementation of innovative practices to create inventive and original products and services. Companies are willing to become “greener” as many investors put a high value on environmental responsibility. However, one thing you should know about sustainability accounting is that many of a company’s costs can be significantly reduced or even eliminated as a result of various business solutions, ranging from operational changes and investments in new technologies, and leading to more innovative processes, products and services.
Sustainability accounting can lead to financial benefits as it provides various opportunities for a reduction of a company’s costs. For example, the financial status of a company can be improved and the operational costs can be reduced by replacing old and unsustainable practices through regularly monitoring the working process of the organization. Moreover, there are plenty of other opportunities that sustainability accounting is able to contribute to. The overall implementation of sustainability accounting practices can also give access to new clients and earn greater recognition of the company, which can then retain and attract new investors.
Generating benefits from sustainability accounting is not an easy task, but once it is adopted, it can bring long term prosperity to the company. It should be clear that engaging in Corporate Social Responsibility (CSR) and preparing a sustainability report do not provide immediate results, so when an organization decides to invest in reporting its sustainability, it has to be aware that the benefits will become more visible over time. Although sustainability accounting might be seen as challenging for most SMEs, it is very important to note that in the end, everything comes down to the reputation of the organization and the image that is being created among society. Sustainability accounting guarantees transparency and allows all activities of a company to be visible, which brings greater recognition in the market. Sustainability accounting adds value to a company by entirely changing the corporate culture and motivates people to act more responsibly in their day-to-day work. Thus, with the proper amount of investment in people and their knowledge, the organization can gain competitive advantage, giving the company the chance to become one of the key players in the market.