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Business leaders say they must measure what they seek to manage.  In recognition of this basic assumption, companies need to take action on significant new facts about their presence in the economic marketplace: (1) the rate at which they consume resources—resources such as water, soil, biodiversity, clean air—now exceeds the pace of renewal for these input factors; (2) the actual risks that firms are exposed to include non-financial aspects including demographic change, environmental modifications, and alteration in climate; (3) stakeholders increasingly demand that the full-cost impact of company operations/existence be disclosed forthrightly by management.

 

Corporate reporting should clearly identify SDG-related performance goals right alongside  the standard financial targets that management expects to achieve.  Unfortunately, while commonly accepted measures of economic outcomes are well-established, the reporting of social, environmental, and sustainability results is not.  Companies should report what impact they seek to have on the SDGs.  Then, they must disclose whether the objectives that were set have been met.  Reporting of that type necessitates measurement; neither the model for such measurement nor the collateral disclosure has yet to be fully developed.

 

This research seeks to assist in the emergent broadening of disclosure standards that stretch beyond mere financial results.  Adding new metrics in the environmental, social, and governance (ESG) areas will allow companies to send more transparent messages about their effect on the people and planet portions of the inimitable “triple bottom line†reporting paradigm.

corporate reporting, social accounting measurement, sustainable development goals, United Nations SDGs