Corporate Accountability and Triple Bottom Line Reporting, written by Martin E. Taylor, Ph.D., CPA, of The University of Texas at Arlington, provides guidance to corporations that wish to issue Triple Bottom Line or Sustainability Reports.  

For purposes of this Portfolio, “Triple Bottom Line” (TBL) refers to a methodology under which an enterprise reports not only financial results but also its success in promoting social and environmental values. This methodology views an enterprise as having three (triple) bottom lines: economic, social, and environmental.  

This Portfolio describes the relationship between the TBL and Corporate Social Responsibility (CSR). 

Historically companies have reported primarily on issues of economic impact. However, stakeholders and the public increasingly scrutinize how companies can minimize harm resulting from their activities by following socially and environmentally responsible paths. Companies increasingly are expected to report on the environmental and social implications of their business as well as on their delivery of economic value. 

This Portfolio explains and traces the development of Triple Bottom Line/Sustainability reporting. Topics include:  

• Introduction to Triple Bottom Line Reporting;
• Examples of misfortunes that have occurred when corporations do not adequately plan for environmental and social risk;
• The metrics of Triple Bottom Line Reporting;
• Key organizations associated with Sustainability and Triple Bottom Line Reporting;
• Examples of Company Social and Environmental Reports; and
• Auditing and Accountability in Triple Bottom Line Reporting.

This Portfolio provides companies with information on the importance and benefits of Triple Bottom Line reporting. Topics include organizations that are developing metrics to measure corporate social responsibility, examples of how corporations are dealing with Triple Bottom Line reporting, and the necessity of integrating Triple Bottom Line reporting into an enterprise's culture.  

Corporate Accountability and Triple Bottom Line Reporting allows you to benefit from:

• Hundreds of hours of original research on specific tax planning topics from leading practitioners in this area.
• Invaluable practice documents including tables, charts and lists.
• Guidance from world-class experts.
• Real-world and in-depth analysis that lets you explore various options.
• Time-saving access to relevant sections of tax laws, regulations, court cases, IRS documents and more.
• Alternative approaches to both common and unique tax scenarios. 

This Portfolio is included in the Accounting Policy & Practice Series, a comprehensive series of titles which explain, explicate, and offer commentary on a wide range of accounting and financial management topics, including revenue recognition, income taxes, leasing, business combinations, debt instruments, risk management, internal controls and more. 

Detailed Analysis

I. Introduction to Triple Bottom Line Reporting

A. Objective of the Portfolio

B. Introduction to Triple Bottom Line Reporting

C. Corporate Social Responsibility and Globalization

1. Conflicting Views on Globalization

2. Emerging Challenges of Globalization

D. The Corporate Reporting Model and Sustainability

1. An Alternative Reporting Model

2. An Example of Conflicting Views on Environmental Issues

3. Defining Environmental and Social Responsibility

E. Organization of the Portfolio

II. The Importance of Corporate Social Responsibility

Introductory Material

A. Union Carbide and the Bhopal, India Tragedy

1. Bhopal According to Union Carbide

2. The Other Side of the Bhopal Story

B. The Exxon Valdez Oil Spill of 1989

C. Johnson & Johnson: A Role Model for CSR Transparency

D. Nike-Moving Forward With CSR

E. The Statistical Association Between CSR and Traditional Financial Performance

III. The Metrics of Triple Bottom Line Reporting

Introductory Material

A. The Global Reporting Initiative Guidelines

B. Economic Performance Indicators

1. A Model for Financial Reporting Improvement

2. The Enhanced Business Reporting Consortium

3. Institute of Chartered Accountants in England and Wales

4. ASB Statement of Standard Operating Practice

C. Environmental Performance Indicators

1. The Carbon Disclosure Project

2. World Business Council for Sustainable Development and the World Resources Institute

3. U.S. Environmental Protection Agency, Government Accountability Office, and Securities and Exchange Commission

4. The Disclosure of Environmental Liabilities and the Financial Accounting Standards Board

5. The Concept of Eco-efficiency

6. International Federation of Accountants Guidelines

7. Accounting Standards Board Statement of Standard Operating Practice and Environmental Indicators

D. Social Performance Indicators

1. ASB Statement of Standard Operating Practice and Social Indicators

E. Conclusion: Reporting the Triple Bottom Line of Economic, Environmental and Social Issues

IV. Key Organizations Associated with Sustainability and Triple Bottom Line Reporting

Introductory Material

A. Coalition for Environmentally Responsible Economies

B. United Nations Global Compact

C. Global Reporting Initiative

D. Organization for Economic Cooperation and Development

E. U.N. Norms on the Responsibilities of Transnational Corporations and Other Business Enterprises With Regard to Human Rights

F. American Society for Quality and the Baldrige Quality Measures

1. Malcolm Baldrige Quality Award

G. International Standards Organization

H. AA1000 Assurance Standard

I. Social Accountability International

J. Dow Jones Sustainability Indexes

1. Sustainability Investment

2. Dow Jones Sustainability North America Index and Dow Jones Sustainability United States Index

3. Dow Jones Sustainability World Index

4. Dow Jones STOXXSM Sustainability Index

K. The Equator Principles

L. The Sullivan Principles

M. International Labor Organization

N. Business for Social Responsibility

O. Business in the Community

1. Corporate Responsibility Index

P. The Global 100

Q. Worldwide Responsible Apparel Production

R. The Forge Group

V. Examples of Company Social and Environmental Reports: Triple Bottom Line Reporting by Two Highly Sustainable U.S. Companies

Introductory Material

A. Baxter (Health Care Equipment and Supplies)

1. Content Indicators

2. Social Indicators

3. Economic Indicators

4. Environmental Indicators

B. Hewlett-Packard Company

1. Illustration of How Hewlett-Packard Company's 2005 Global Citizenship Report Uses GRI Guidelines

VI. Auditing and Accountability in Triple Bottom Line Reporting

Introductory Material

A. Internal Assurance

B. External Assurance Standards

VII. Conclusion: The Triple Bottom Line in Perspective

Introductory Material

A. Defining Corporate Accountability

B. Implications of the Proposal

1. Accounting Is a Form of Ethical Communication, Not a Sub-Discipline of Finance

2. Triple Bottom Line Reporting Is an Idea Whose Time Has Come

3. Accountants Must Promote, Initiate, and Referee Dialogues

4. The Goal of Accounting Education Should Be to Teach Students How to Facilitate the Expansion of Corporate Accountability

C. Conclusion

Working Papers

TABLE OF WORKSHEETS

Worksheet 1 List of Acronyms

Worksheet 2 IG Example 3: Market Share

Worksheet 3 IG Example 4: Average Revenue Per User (Customer)

Worksheet 4 IG Example 7: Percentage of Revenue From New Products

Worksheet 5 IG Example 9: Products in the Development Pipeline

Worksheet 6 IG Example 11: "Customer Churn"

Worksheet 7 Hewlett-Packard Company, Management's Discussion and Analysis of Financial Condition and Results of Operations

Worksheet 8 Excerpt from Note 17: Litigation and Contingencies, Hewlett-Packard 2004 Consolidated Financial Statements

Worksheet 9 Excerpt from Note 8: Litigation and Environmental Matters, Abbott Laboratories 2004 Consolidated Financial Statements

Worksheet 10 Ciba Specialty Chemicals: Water Received

Worksheet 11 Ciba Specialty Chemicals: Energy Requirement

Worksheet 12 Ciba Specialty Chemicals: Global Warming Contribution

Worksheet 13 Ciba Specialty Chemicals: Total Emissions of ODS

Worksheet 14 Ciba Specialty Chemicals: Waste Generated

Worksheet 15 Ciba Specialty Chemicals: Dependence on ODS

Worksheet 16 IG Example 12: Environmental Spillage

Worksheet 17 IG Example 14: Waste

Worksheet 18 IG Example 16: Employee Health and Safety

Worksheet 19 IG Example 17: Monitoring of Social Risks in the Supply Chain

Worksheet 20 IG Example 18: Noise Infringements

Worksheet 21 Starbucks Corporation 2004 Corporate Social Responsibility Report

Worksheet 22 U.S. Corporations Reporting Under GRI

Worksheet 23 OECD Guidelines for Multinational Enterprises

Worksheet 24 OECD Member Countries with Date of Ratification

Worksheet 25 Proposed ISO Standards

Worksheet 26 JPMorgan Chase Announces Environmental Policy

Worksheet 27 List of BSR Member Companies

Worksheet 28 Correlation Between Business In The Community and GRI Indicators

Worksheet 29 The Global 100 Top 3 in 2005

Worksheet 30 The Global 100 List for 2005

Worksheet 31 External Environmental Auditing Function: Xcel Energy

Worksheet 32 Independent Verifier's Report: Starbucks Coffee Company

Worksheet 33 Final Verification Statement (External): Coca-Cola Company

Worksheet 34 Stakeholder Review: Nike, Inc.

Worksheet 35 External Assurance Report: Co-operative Financial Services

Worksheet 36 Assurance Report: Nova Nordisk

Worksheet 37 External Auditor Report: BP, Inc.

Worksheet 38 Stakeholder Sustainability Report: GAP Inc. 2003 and 2004

Worksheet 39 Assertion and Criteria Regarding Sustainability Report Processes: 3M Company

Worksheet 40 Report of Independent Auditors: 3M Company