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As business moves into the new millennium, the old methods of reporting are proving to be no longer sufficient. New forms of corporate disclosure which integrate financial, environmental and social reporting, are starting to take shape, both internationally and in Australia. Triple bottom-line reporting is a path which points to practical benefits for companies themselves as well as their varied stakeholders. In this issue, Australian CPA looks at the path ahead. First, John Elkington explains the underlying principles and issues. ustainable development is a concept with which many people identify and sympathise, but if it is to become a global reality rather than remain a seductive mirage, governments, communities, companies and individuals must work together to improve their performance.
The sustainability agenda, long understood as an attempt to harmonise the traditional financial bottom line with emerging thinking about the environmental. bottom line, is turning out to be much more complicated than some early business enthusiasts imagined. Increasingly, we think in terms of a 'triple bottom line', focusing on economic prosperity, environmental quality, and - the element which business has tended to overlook - social justice. To achieve the balance implicit in the 'triple bottom line' concept, we not only need new fons of accountability but also new forms of accounting.
This does not mean that every aspect of a company's performance can - or should - be reduced to a 'common currency' of money values. But if we are to manage a given company's performance effectively, we need to be able to measure it. We must find accurate, useful and credible indicators of progress in terms of economic prosperity, environmental quality and social justice.
Sustainable value creation
Companies exist to create wealth, so the most direct contribution they can make to sustainable development is to create longterm value on an economically, socially and environmentally sustainable basis. A key 21st century challenge, in short, will be 'sustainable value creation'.
But how can we measure progress against the emerging economic, social and environmental performance indicators? One of the leading companies in this field is Shell UK; it is therefore a useful case study. But try to benchmark Shell's performance or that...