Sustainability is applied ethics.

Author:Seay, Sharon S.


The Brundtland Report (1987) defines sustainable development as the "development that meets the needs of the present without compromising the ability of future generations to meet their own needs." Implicit in this definition is an expanded responsibility set for companies toward society with the inclusion of stakeholders, sustainability, business ethics, and transparency in the business model (Frias-Aceituno, et al. 2013). In recent years, an increasing number of companies issue Sustainability Reports, Citizenship Reports, or Corporate Social Responsibility Reports (CSR) to complement traditional financial reporting. Currently, there is increasing investor interest as well as other stakeholders' interest in this type of qualitative information. Sustainable investment funds have appeared over the last few years (Koellner, et al. 2005). Customers frequently demand to know if products have been sustainably produced, preferring higher-priced green products to lower cost alternatives where environmental, social, and governance issues are not considered in production decisions.

Society and the market have changed, placing more value on corporate governance, social, and environmental concerns and altering corporate strategic goals. Sandrijn Weites of ABN AMRO stated, "Sustainability is a boardroom topic. It's not something you do because it's nice. The time of the fast buck is over for responsible companies; the number one priority now is sustainable growth. Our horizon has become not just the next quarter, but the next quarter of a century." He suggests challenging corporate assumptions. He suggests, "Business managers with day-to-day profit and loss responsibility have a short-term focus. Professional accountants in business need to hold a mirror up to these people and start asking questions. A profit of $180,000 may be a loss of a million dollars a year later. You need to get people thinking about the consequences."

Sustainability is much broader and more encompassing than just environmental responsibility. Corporate sustainability must consider all company activities and stakeholders necessary for the company to create value and ensure its long-term survival and viability. Responsibilities to company employees, customers, suppliers, the community, the environment, and to future generations must be considered. This is a holistic perspective on sustainability, with a long-term focus. Such a perspective requires a business model where the rights of all stakeholders must be considered and balanced vs. exploitative business models.

This paper posits that sustainable management and accounting are in fact applied ethics. Some companies currently reporting on sustainability entitle their report as a "Good Citizenship Report." Good citizenship, safeguarding the environment, giving back to the community, promoting workforce health and safety, and 'doing the right thing' are all examples of ethical behavior. Sustainability reporting focuses on corporate accountability or stewardship. Accounting as a profession has often been characterized as the watchdog of business, ensuring reporting that is fairly presented, reflecting economic reality. Accountants and auditors are bound by their professional code of ethical conduct to protect the public interest. Accountants and auditors are ethical detectives holding businesses to ethical standards of honesty, neutrality, completeness and representational faithfulness. So grounded, accounting is the provider of one of the essential checks and balances on commerce. This paper explores the role of accounting and auditing from an ethical perspective, positing that accounting is applied ethics. Accountants and auditors are the gatekeepers of business ethics. Contemporary ethical models are applied to the accounting profession and to sustainability. Sustainability is viewed through the lens of contemporary ethical theory, stakeholder theory, and accountability theory. Our research posits that sustainability is applied ethics.



In the religious model, a supreme being, God, sets standards and guidance for right and wrong. The Judeo-Christian ethic provides moral imperatives as: be honest, respect human life, do good to others, respect individual rights and property, and so forth (Seay, 2010). While the global business marketplace within which multi-national firms trade may include companies and countries where the Judeo-Christian principles do not govern, religion does provide society's broadest based ethical framework and can account for acts such as fair labor laws, environmental governance, and workplace safety.


This ethical theory focuses on actions and ignores consequences. The emphasis is on duty. Accountants and auditors are bound by their duty...

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