Business Sustainability Reporting & Analysis, 1e

by Dechow, Sloan

| ISBN: 978-1-61853-656-3 | Copyright 2025

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Business Sustainability Reporting & Analysis

As humanity faces growing environmental and social challenges, stakeholders in businesses are increasingly demanding information on sustainability impacts and risks. Businesses have responded with a dizzying array of reports and metrics that are often criticized as 'greenwashing'.

This book provides a critical analysis of current practices in business sustainability reporting and analysis. Topics covered include:

  • Dimensions of sustainability
  • The sustainability reporting ecosystem
  • Key sustainability metrics
  • GHG accounting
  • Sustainability reporting standards
  • ESG ratings
  • ESG activism

...and more.

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CHAPTER 1: Introduction (pg. 1-1)
1.1 The Emergence of Sustainability Reporting (pg. 1-1)
1.2 Defining Sustainability (pg. 1-2)
Sustainable Development Goals (SDGs) (pg. 1-3)
1.3 The Role of Sustainability Reporting (pg. 1-5)
Double Materiality (pg. 1-6)
Dynamic Materiality (pg. 1-7)
1.4 The Sustainability Reporting Ecosystem (pg. 1-8)
Consultants (pg. 1-9)
Standard Setters (pg. 1-9)
Assurance Providers (pg. 1-10)
Regulators (pg. 1-10)
Nongovernmental Organizations (pg. 1-10)
Data Aggregators (pg. 1-11)
Rating Agencies (pg. 1-11)
Index Providers (pg. 1-12)
Asset Managers (pg. 1-12)
Proxy Advisories (pg. 1-12)
1.5 Closing Words (pg. 1-13)
1.6 Questions And References (pg. 1-13)
Discussion Questions (pg. 1-13)
Real-Time Case Study Questions (pg. 1-14)
References (pg. 1-14)
CHAPTER 2: Sustainability Reporting Standards (pg. 2-1)
2.1 Introduction (pg. 2-1)
2.2 Conceptual Frameworks (pg. 2-1)
Objective of Standards (pg. 2-2)
2.3 Overview of the GRI Standards (pg. 2-7)
2.4 Overview of the SASB Standards (pg. 2-9)
2.5 Other Reporting Standards And Frameworks (pg. 2-11)
TCFD (pg. 2-11)
ISSB (pg. 2-12)
ESRS (pg. 2-13)
Other Sustainability Reporting Frameworks and Standards (pg. 2-14)
2.6 Closing Words (pg. 2-16)
2.7 Questions and References (pg. 2-16)
Discussion Questions (pg. 2-16)
Real-Time Case Study Questions (pg. 2-17)
References (pg. 2-17)
CHAPTER 3: Environmental Issues (pg. 3-1)
3.1 Introduction (pg. 3-1)
3.2 Economics of Environmental Governance (pg. 3-1)
Negative Externalities (pg. 3-2)
Common Pool Resources and the Tragedy of the Commons (pg. 3-5)
The Role of Sustainability Reporting (pg. 3-7)
3.3 Climate Change and Greenhouse Gas Emissions (pg. 3-10)
Reducing Greenhouse Gas Emissions (pg. 3-12)
3.4 Other Harmful Air Emissions (pg. 3-14)
Emissions Causing Depletion of the Stratospheric Ozone Layer (pg. 3-14)
Emissions Causing Localized Air Pollution (pg. 3-14)
3.5 Biodiversity and Ecological Impacts (pg. 3-15)
3.6 Water and Effluents (pg. 3-16)
3.7 Materials and Waste (pg. 3-18)
1. Waste Prevention. (pg. 3-19)
2. Waste Minimization. (pg. 3-19)
3. Waste Management. (pg. 3-19)
3.8 Closing Words (pg. 3-20)
3.9 Questions and References (pg. 3-21)
Discussion Questions (pg. 3-21)
Real-Time Case Study Questions (pg. 3-21)
References (pg. 3-21)
CHAPTER 4: Reporting on Climate Impacts (pg. 4-1)
4.1 Introduction (pg. 4-1)
4.2 An Introduction To GHG Accounting (pg. 4-1)
Reporting Principles (pg. 4-2)
Setting the Organizational Boundary: Equity Share and Control (pg. 4-2)
Setting the Operational Boundary: Scope 1, Scope 2, and Scope 3 Emissions (pg. 4-3)
A Simple Example (pg. 4-6)
Tracking Emissions Over Time (pg. 4-10)
Identifying, Calculating, and Reporting GHG Emissions (pg. 4-11)
1. Identify Sources (pg. 4-11)
2. Select Calculation Approach (pg. 4-11)
3. Collect Data and Choose Emissions Factors (pg. 4-11)
4. Apply Calculation Tools (pg. 4-12)
5. Roll Up Data to Corporate Level (pg. 4-12)
Accounting for Emissions Reductions (pg. 4-12)
Reporting and Verification of GHG Emissions (pg. 4-14)
4.3 Setting GHG Targets (pg. 4-15)
4.4 Reporting Frameworks and Standards (pg. 4-17)
GRI Reporting on Climate Impacts (pg. 4-17)
SASB Reporting on Climate Impacts (pg. 4-18)
TCFD Reporting on Climate Impacts (pg. 4-20)
ISSB Reporting on Climate Impacts (pg. 4-21)
ESRS Reporting on Climate Impacts (pg. 4-22)
SEC’s Climate-Related Disclosure Rules (pg. 4-22)
California Climate Disclosure Bills (pg. 4-23)
4.5 Recent Developments in GHG Accounting (pg. 4-24)
4.6 Questions References (pg. 4-25)
Discussion Questions (pg. 4-25)
Real-Time Case Study Questions (pg. 4-26)
References (pg. 4-27)
CHAPTER 5: Reporting on Other Environmental Impacts (pg. 5-1)
5.1 Introduction (pg. 5-1)
5.2 Other Harmful Air Emissions (pg. 5-2)
GRI Reporting on Other Harmful Air Emissions (pg. 5-2)
SASB Reporting on Other Harmful Air Emissions (pg. 5-3)
ESRS Reporting on Other Harmful Air Emissions (pg. 5-3)
5.3 Biodiversity and Ecological Impacts (pg. 5-4)
GRI Reporting on Biodiversity and Ecological Impacts (pg. 5-4)
SASB Reporting on Biodiversity and Ecological Impacts (pg. 5-4)
ESRS Reporting on Biodiversity and Ecological Impacts (pg. 5-5)
TNFD Reporting on Biodiversity and Ecological Impacts (pg. 5-6)
GRI Reporting on Water and Effluents (pg. 5-6)
SASB Reporting on Water and Effluents (pg. 5-7)
ESRS Reporting on Water (pg. 5-8)
5.5 Materials and Waste (pg. 5-8)
GRI Reporting on Materials and Waste (pg. 5-8)
SASB Reporting on Materials and Waste (pg. 5-9)
ESRS Reporting on Materials and Waste (pg. 5-10)
5.6 Supplier and Customer Environmental Impacts (pg. 5-11)
GRI Reporting on Supplier Environmental Impacts (pg. 5-11)
SASB Reporting on Supplier and Customer Environmental Impacts (pg. 5-11)
ESRS Reporting on Supplier and Customer Environmental Impacts (pg. 5-14)
5.7 Closing Words (pg. 5-14)
5.8 Questions and References (pg. 5-14)
Discussion Questions (pg. 5-14)
Real-Time Case Study Questions (pg. 5-15)
References (pg. 5-15)
CHAPTER 6: Social Issues (pg. 6-1)
6.1 Introduction (pg. 6-1)
6.2 Human Cooperation (pg. 6-1)
6.3 Overview Of Global Inequality (pg. 6-5)
6.4 Labor Practices (pg. 6-7)
Child Labor (pg. 6-7)
Forced Labor (pg. 6-8)
Freedom of Association and Collective Bargaining (pg. 6-9)
Training and Education (pg. 6-10)
6.5 Diversity and Inclusion (pg. 6-11)
Equality versus Equity (pg. 6-13)
6.6 Health and Well-Being (pg. 6-14)
6.7 Indigenous Peoples’ and Community Rights (pg. 6-15)
6.8 Closing Words (pg. 6-17)
6.8 Closing Words (pg. 6-18)
Discussion Questions (pg. 6-18)
Real-Time Case Study Questions (pg. 6-18)
References (pg. 6-18)
CHAPTER 7: Reporting on Social Impacts (pg. 7-1)
7.1 Introduction (pg. 7-1)
7.2 Labor Practices (pg. 7-2)
GRI Reporting on Labor Practices (pg. 7-2)
SASB Reporting on Labor Practices (pg. 7-4)
ESRS Reporting on Labor Practices and Positions (pg. 7-5)
7.3 Diversity and Inclusion (pg. 7-6)
GRI Reporting on Diversity and Inclusion (pg. 7-6)
SASB Reporting on Diversity and Inclusion (pg. 7-7)
ESRS Reporting on Diversity and Inclusion (pg. 7-7)
7.4 Occupational Safety and Health (pg. 7-8)
GRI Reporting on Occupational Safety and Health (pg. 7-8)
SASB Reporting on Occupational Safety and Health (pg. 7-8)
ESRS Reporting on Occupational Safety and Health (pg. 7-8)
7.5 Customer Welfare (pg. 7-9)
GRI Reporting on Customer Welfare (pg. 7-9)
SASB Reporting on Customer Welfare (pg. 7-10)
ESRS Reporting on Customer Welfare (pg. 7-15)
7.6 Indigenous Peoples’ and Community Rights (pg. 7-15)
GRI Reporting on Indigenous Peoples’ and Community Rights (pg. 7-15)
SASB Reporting on Human Rights and Community Relations (pg. 7-16)
ESRS Reporting on Human Rights and Community Relations (pg. 7-16)
7.7 Supplier Social Assessment (pg. 7-17)
GRI Reporting on Supplier Social Assessment (pg. 7-18)
SASB Reporting on Supplier Social Assessment (pg. 7-18)
ESRS Reporting on Supplier Social Assessment (pg. 7-19)
7.8 Closing Words (pg. 7-20)
7.9 Questions (pg. 7-20)
Discussion Questions (pg. 7-20)
Real-Time Case Study Questions (pg. 7-20)
CHAPTER 8: Reporting on Governance and Economic Impacts (pg. 8-1)
8.1 Introduction (pg. 8-1)
8.2 Overview of Corporate Governance (pg. 8-2)
Principles of Corporate Governance (pg. 8-4)
8.3 Reporting on Corporate Governance (pg. 8-6)
GRI Reporting on Governance (pg. 8-7)
Governance (pg. 8-7)
Strategy (pg. 8-7)
Stakeholder Engagement (pg. 8-7)
SASB Reporting on Governance (pg. 8-8)
ISSB Reporting on Governance (pg. 8-10)
ESRS Reporting on Governance (pg. 8-11)
8.4 Benefit Corporations and B Corps (pg. 8-11)
8.5 Reporting on Economic Impacts (pg. 8-14)
GRI Reporting on Economic Impacts (pg. 8-15)
SASB Reporting on Economic Impact (pg. 8-19)
ESRS Reporting on Economic Impact (pg. 8-19)
8.6 Closing Words (pg. 8-20)
8.7 Questions and References (pg. 8-21)
Discussion Questions (pg. 8-21)
Real-Time Case Study Questions (pg. 8-22)
References (pg. 8-22)
CHAPTER 9: Assurance Providers (pg. 9-1)
CHAPTER 10: Regulators (pg. 10-1)
CHAPTER 11: Non-Governmental Organizations (pg. 11-1)
CHAPTER 12: Rating Agencies and Index Providers (pg. 12-1)
CHAPTER 13: Asset Managers (pg. 13.1)
CHAPTER 14: Activist Investors and Proxy Advisories (pg. 14.1)
Patricia M. Dechow

Patricia M. Dechow

Patricia Dechow is the Robert R. Dockson Professor of Business Administration and a professor of accounting at the Marshall School of Business at the University of Southern California.

One of the leading and most highly cited accounting researchers in the nation, Dechow research interests include accounting accruals, understanding the quality of earnings and non-GAAP earnings exclusions.  She is also interested in understanding the role of corporations in supporting social movements. Her work has appeared in many journals and includes The Accounting Review, Review of Accounting Studies, Contemporary Accounting Research, and Journal of Accounting and Economics.  Dechow received the American Accounting Association’s Seminal Contribution to Accounting Literature Award in 2019, the AAA Distinguished Contribution to Accounting Literature awards in 2010 and 2015, and the FARS Distinguished PhD Mentoring Award in 2020.  She was inducted into the Australia Accounting Hall of Fame in 2022.  Dechow earned a bachelor’s degree at the University of Western Australia and a doctorate in accounting and finance from the W.E. Simon School of Business Administration at the University of Rochester.  She is an editor for the Review of Accounting Studies.  She has recently been involved in developing and teaching a course on Sustainability Reporting.  She is a member of the Executive Committee for the RRBM network (Responsible Research in Business & Management).


Richard Sloan

Richard Sloan

Richard Sloan is a professor of accounting, finance and business economics at the University of Southern California.

He has also served on the faculties of UC Berkeley’s Haas School of Business, University of Michigan’s Ross School of Business and University of Pennsylvania’s Wharton School. While at the University of Michigan, Professor Sloan was the founding director of the John R. and Georgene M. Tozzi Electronic Business and Finance Center. From 2006 to 2009, Sloan was a managing director in equity research at Barclays Global Investors (since acquired by Blackrock). Professor Sloan is a pioneer in the field of quantitative investing. He has served as a consultant to numerous firms in the investment management industry.

Professor Sloan’s research focuses on the role of accounting information in investment decisions. His research has received numerous awards, including the American Accounting Association’s Seminal Contributions to the Accounting Literature Award (2016), the American Accounting Association’s Distinguished Contributions to the Accounting Literature Award (2010) and the American Accounting Association’s Notable Contributions to the Accounting Literature Award (2001, 2009). He is the coauthor (with Russell Lundholm) of Equity Valuation and Analysis, now in its sixth edition. He is also an editor of the Review of Accounting Studies and a member of the Financial Accounting Standards Advisory Council. Professor Sloan holds a PhD in Accounting and Finance from the University of Rochester and a BCom (Hons) from the University of Western Australia. He is an FSA credential-holder.