Essay on "Sustainable Business Development Sustainability Performance Reporting"
Essay 5 pages (1459 words) Sources: 5
[EXCERPT] . . . .
Sustainable Business DevelopmentSustainability Performance Reporting
The Introduction section of the paper discusses important issues regarding sustainability performance reporting. The paper continues with the Sustainability Performance Reporting that focuses on discussing some of the most important financial metrics that companies use their sustainability performance reports to stakeholders. The Conclusions section summarizes important aspects regarding the subject of the Sustainability Performance Reporting paper.
In their efforts to increase their market share and create competitive advantage companies must expand their strategy in order to include sustainable business development practices. There are several objectives that these companies expect to reach when intensifying their efforts regarding sustainable development. Some of them are obligated by laws and regulations to do so. This usually takes place in very polluting industries. Other companies are trying to increase investor capital. Therefore, they orient towards developing environmentally sustainable strategies that attract a large number of important investors. These investors want to see their money spent on activities that support environmental protection. This is because they want to improve their image to the public by associating it with green activities.
Such practices are also addressed by companies determined by their customers to increase their efforts in supporting the environment. As a result, they focus on improving their product development process and on assessing environmental factors when deciding to build production facilities. They also focus on d
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Sustainability Performance Reporting
It is important that companies that develop sustainability practices present their reports to different groups of stakeholders. The most important types of stakeholders that are interested in the progress made by these companies and their results in this field are represented by: investors, customers, and governments. Investors are interested in this because they want to know how their money is spent. In other words, they want to make sure that their money is efficiently spent on green activities they can associate their image with.
In addition to this, governments are also interested in sustainability performance reporting. This is because they establish different sets of regulations on environmental protection and want to ensure that companies comply with these regulations. Therefore, such reports help them in their control of such activities developed by companies (Szekely & Knirsch, 2005). Customers are also interested in these reports. They allow them to determine whether the company they are interested in meets their standards on environmental sustainability.
In this case, financial reporting is very important to stakeholders. There are several types of metrics used in financial sustainability reporting (Verdantix, 2011). The most important metrics are represented by: risk return ratio, investment performance, production costs, additional costs, level of operating costs, product prices, and others.
Risk return ratio
This financial indicator can be applied to private investors, institutional investors, and asset managers. It is suitable for direct and indirect investments. The importance of this indicator relies on the fact that investors are interested in the risk return ratio of the amounts of money they invest in different businesses (Lowe & Ponce, 2008). This indicator depends on several factors, like attitude towards risk, the investment strategy, and the period of time that investors establish when making an investment. The investment strategy can be growth or value oriented.
In most cases, investors try to identify investments with higher return at the same risk level, or investments with lower levels of risk at the same return. In the real estate industry, in the case of property investments it has been observed that investors tend to orient towards sustainable investments with risk return ratios that are similar to those of conventional investments.
Investment performance
This indicator can be reported to private investors, institutional investors, investment advisors, banks, fund managers, rating agencies, and others. The reason behind including this financial metric in sustainability reports to stakeholders relies on the fact that investors want to evaluate the economic success of their investment. Therefore, they need this indicator in order to measure the performance of their investment so that they can make better decisions regarding the size and type of their future investments in the company or business in case.
In order to better evaluate the performance of investments, the value of this indicator is usually compared to the value of other basic indexes. Investment performance or total return of investment reveals the cash flow determined by an investment towards the investor. However, it is important… READ MORE
Quoted Instructions for "Sustainable Business Development Sustainability Performance Reporting" Assignment:
“Financial Aspects Paper
Select an area of sustainability performance reporting that would incorporate financial metrics. Explain the metrics used and their importance in reporting sustainable business development progress to stakeholders. Provide an example to illustrate your point(s). Find 5 credible publication resources to support the information you develop in paper on the topic. Try to include one peer-reviewed article on the topic. Use only online sources and only free accessible web sites. You do not need to be *****"all inclusive*****" in the paper, narrow your scope and focus on a part or subject area that interesting. Thank you. *****
How to Reference "Sustainable Business Development Sustainability Performance Reporting" Essay in a Bibliography
“Sustainable Business Development Sustainability Performance Reporting.” A1-TermPaper.com, 2012, https://www.a1-termpaper.com/topics/essay/sustainable-business-development-sustainability/383782. Accessed 4 Oct 2024.
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