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Sustainability Accounting and Contemporary Issues


Accounting is a vast topic for discussion as it involves numerous smaller ones, all of which are interrelated. Therefore, accounting cannot be researched without understanding its complex structure and its impact on different spheres of public life, interactions with government, and people’s income levels. Consequently, it affects national economies and even the international economy because it influences people’s and government’s ability to make purchases, in other words, be economically active.

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The topics of the peer-reviewed articles scanned for this essay can be divided into several groups. The reviewed journals included Behavioral Research in Accounting, Journal of Public Budgeting, Accounting and Financial Management, Journal of Cleaner Production, and Accounting, Auditing & Accountability Journal. These journals were rich in articles concerning modern problems of accounting and the prediction of its future. Most reviewed articles were related to environmental accounting issues and business responsibility regarding society. Therefore, sustainability accounting as a uniting topic mentioned above was chosen for this essay. Moreover, the reviewed articles touched on management accounting, performance measurement, ethical conduct in accounting, and corporate governance. Although the topics of articles can be grouped, the conclusions that authors make may differ drastically.

Sustainability accounting can be related to as an obligatory aspect of the modern economy. The fact that tendencies that reflect people’s desire to help each other and maintain comfortable living conditions and social interactions emphasize that society has reached a new step of evolution. This step is characterized by uniting to achieve common goals, being responsible for actions, and implementing new ways of providing conditions for future generations. Being responsive to the challenges of the current turbulent economic, political and social conjuncture predetermines the probability of reaching success nowadays. Therefore, governmental structures and companies have to face the necessity to improve their performance following the new requirements constantly.

History of the Issue

Concerning sustainability accounting, it has not existed for a long time now. This particular dimension of accounting has appeared a few years ago and complies with the modern tendencies to maintaining the responsibility and reliability of all the economic agents. It is necessary to be familiar with the structure of sustainability accounting to understand its purpose and implications in practice. Sustainability accounting includes the issues that the phenomenon of sustainability touches on and interprets them from accounting.

Sustainability concentrates on the effective use of various resources to meet the present needs, considering the future repercussions of present humanity’s activities, and ensuring that future generations would be able to meet their needs. Sustainability mainly concerns environmental issues, social equity, and economic development, but there are more detailed aspects (“Take action for the sustainable development goals”, n. d.). Hence, sustainability accounting includes such gaining popularity issues as environmental accounting, accounting social responsibility of business, and even brand accounting as well as other similar types of it (“Take action for the sustainable development goals”). The width of the issue can be explained by the variety of social and economic interactions that people and organizations perform daily, along with the complexity of humanity’s influence on the environment and different processes. Thus, it is already clear that sustainability accounting and its parts play a crucial role in developing social relations and the economy.

Environmental Accounting

Environmental accounting first became a topic for comprehensive discussion in the 1970s, when the world became concerned about preventing the environment from further damaging. The development of environmental accounting took four stages from the 1970s to the present moment. The present stage of environmental accounting development can be characterized by the high quality of scientific research of the issues related to the topic and the availability of mechanisms to influence economic processes and business behavior. Moreover, the speed of information spreading has grown drastically since the beginning of environmental accounting’s development, which is why public attention has become a significant triggering force of changes.

Social Responsibility Accounting

The next dimension of sustainability accounting is the social responsibility of business. Social responsibility accounting touches on the interactions and interrelations of society and organizations. Social responsibility accounting was first mentioned in the 1960s and initially spread in the U. S. (Zyznarska-Dworczak, 2020). Social responsibility accounting is aimed at measuring the social benefits that a business initiates and provides. Therefore, with the popularization of the concept of business being a part of the community and therefore having an obligation to respond to its needs, social accounting has gained weight.

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The assumptions on which the concept of social responsibility accounting is based are the following. Firstly, the business has obligations to its surrounding community (Karunakaran & Chinnappa, 2021). Thus, it should react timely and relevantly to the events in this community and translate the image of a unit being ready and able to provide help. Moreover, the level of comfort in interactions of the society members with organizations should be maintained on a high level to ensure the trust between business and people.

The second assumption is related to the continuous development of business structures. To be more exact, companies should contribute to their employees’ understanding of the importance of helping solve problems of the local community despite the possessed resources (Karunakaran & Chinnappa, 2021). In other words, every action, even a minor one, can trigger positive effects, so people should help each other as much as the organizations should help society. Consequently, such an approach allows stimulating the organizations to help the society from the inside – by accepting the suggestions of employees’ initiatives or creating programs that involve many participants and introducing them to personnel.

Economic Development Accounting

The third aspect of sustainability accounting is the connection to economic development. This mainly refers to the companies and their operation performance but can also be applied to the government. For instance, Karunakaran and Chinnappa (2021) claim that effective accounting controls and accounting practices will tend to have a stimulating effect on the flow of foreign and domestic private capital. Therefore, accounting has a powerful influence on the condition of the economy. Moreover, high-quality accounting is vital to improve transparency as it stimulates the coordination of domestic and international investment which makes it a factor of economic development (Zyznarska-Dworczak, 2020). Hence, accounting, in general, should improve under the modern tendencies to maintain its strong influence over the economy and ensure that it is positive.

Sustainability Accounting as a Whole

Sustainability accounting was first mentioned as a significant way of accounting’s development in the early 1990s. The concept was discussed and developed; it took much time to evaluate its importance and make predictions for further improvements. World Summit on Sustainable Development that took place in Johannesburg in August 2002, where the Sustainable Accounting Guidelines were presented, marked the beginning of a new era in accounting (). Therefore, the different concepts of accounting and different perceptions of its purpose were gathered together and included in one massive concept of sustainability accounting.

Initially, methods of sustainability accounting were introduced by Gray in 1993. Gray stated that there were three methods of sustainable accounting – sustainable cost accounting, natural capital inventory accounting, and input-output analysis. However, there are two more methods of sustainability accounting nowadays that were introduced later and include full-cost accounting and a triple bottom line method. Therefore, sustainability accounting consists of five methods total, although its meaning is broad.

The importance of the issue is inevitable for several reasons. First, economic development has always been one of the most significant global issues. Second, the connection between business and the community of its employees and consumers is an integral part of social life nowadays. Thus, the clarity and benefit of these relations should be ensured by stating the obligations of the business. Finally, humanity has been trying to deal with ecological problems to save the environment for decades, and the only practically beneficial decision was that the issue could be addressed only if people unite. Therefore, implementing rules for businesses and the government to maintain a particular environmental condition is a solution to massive influence. Generally, sustainability accounting is a complex issue that still has not found a perfect implementation algorithm but is helpful for business, society, and the state.

Literature Review

There is a wide range of studies on accounting in general and its particular aspects or stages of evolution concerning the previous research. Accounting maintains one of the most demanded business-related topics because it improves constantly and never stops to require more changes. Therefore, new features of accounting are considered to have a significant influence on the performance of the companies and the wealth of the state. Sustainability accounting can be analyzed from different perspectives and points of view. Thus, researchers often connect it with some changes in the economy or business sphere to provide a comparative analysis of the conjuncture and assess the changes’ effect. Furthermore, the existing literature mainly covers the innovations that have touched on the business and the governmental solutions to some problems implemented with the use of accounting. Overall, the number of studies on the topic is vast enough to evaluate the issue from different perspectives.

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The most critical issue regarding sustainable accounting is its compliance with modern tendencies. Tiwari and Khan, in their research, reviewed the influence that Industry 4.0 has over the business and its processes (2020). This study also includes assessing Industry 4.0 and the conditions it provides from the perspective of comfort for implementing measures aimed at reaching sustainability goals (Tiwari & Khan, 2020). The form of the research was in-depth group discussions, and two focus groups were analyzed during the study (Tiwari & Khan, 2020). The research has revealed that Industry 4.0 does not provide solutions to all the problems faced on reaching sustainability goals, although its conditions are comfortable for implementing various innovations and introducing changes.

One more study was devoted to sustainability, accounting, and digitalization at the same time. The purpose of the research by Klymenko et al. (2021) was to reveal the ways Norwegian companies comply with the necessity to provide responsible and sustainable accounting. The study has shown that companies adapt differently, but generally, the employees agree with the requirement to have a sustainability policy and are willing to participate in the company’s sustainable activities (Klymenko et al., 2021). Digital technologies contribute drastically to the implementation of sustainability principles because they provide an opportunity to optimize the amounts of resources used and allow the workers to avoid dangerous processes (Klymenko et al., 2021). Consequently, technology’s role in changing organizations and, mainly, accounting processes is crucial, and they should be used up to the practical limit.

Another research reflecting the topic of sustainability accounting refers to scholars who actively participate in sustainability-related activities towards the issue. Cho et al. (2020) conducted the research using a questionnaire to reveal the professors’ preferences of the North American community in emphasizing particular aspects of sustainability. The study’s main result was insights on the scholars’ academic life, which is crucial because they are the people who predetermine the view on the sustainability of young people and future generations. Academics highlighted such difficulties they face in their professional life as the “lack of recognition by… accounting community”, which refers to the articles they publish in peer-reviewed journals (Cho et al., 2020, p. 6). At the same time, the majority of respondents claimed that the most satisfying thing about their job is the ability to contribute to the peer-reviewed development of sustainability accounting and its spreading (Cho et al., 2020). Therefore, there is a controversy between the professors’ desire to research sustainability accounting and telling about it to their students and the fact that the results of these studies can be left unnoticed.

Another article that is interesting for understanding the topic concerns stakeholder engagement in sustainability accounting. The study by Hörisch et al. (2020) aimed to research the stakeholders’ involvement in sustainability accounting and reporting. The study reviewed the Stakeholder theory and described the variability of stakeholders’ impact on the business (Hörisch et al., 2020). Moreover, the study has shown that “organizations require the cooperation of their stakeholders to identify the social and environmental issues as they perceive them” (Hörisch et al., 2020). Therefore, the role of business’ stakeholders is crucial for maintaining the relevant responsibility policy and addressing the most urgent issues, which directly affect the reputation of the company.

In addition, there is one more article on stakeholders’ interests realization through sustainability accounting. The study by Ismayilov et al. (2020) reviewed Ukrainian sustainability reporting assessments and compared them with European and international ones. The study has shown that there should be measures to develop the sustainability accounting evaluation system in Ukraine (Ismayilov et al., 2020). Sustainability reporting was proved to be better due to the amount of experience in European countries compared to international practice.

In general, literature on the topic of sustainability accounting is somewhat variable and covers different aspects of this contemporary issue. However, it does not seem to be enough, as some studies reveal a lack of acceptance of scholarly articles in practice. Therefore, practical issues remain unsolved, and the spreading of sustainability ideas in accounting is slower than it could have been. Thus, the discussions on the topic should be stimulated to maintain a proper level of suggestions for implementation in real life. Moreover, not all the results of the reviewed articles have the potential to be introduced globally, although sustainability is the goal of the whole world, as the United Nations have stated. As a result, for making the result visible, more attention should be paid to accounting issues and sustainability accounting in particular because it affects the economy and social sphere and can improve them considerably.

Critical Analysis

Although the issue seems to affect all the economic agents first, real stakeholders can be distinguished from the variety of subjects related to sustainability accounting. Logically, the main stakeholders, in this case, are the society where the business exists (in other words, community or consumers), employees of the companies, governmental structures, and auditors. There is an explanation of why each of the mentioned above agents is a stakeholder of sustainability accounting and why maintaining sustainability is essential and beneficial.

Stakeholders: Society

First of all, the main stakeholder who is affected by the sustainability accounting implementation is society. It cannot be denied that the necessity to provide society with comfortable conditions is positive, and helping people is natural for huge companies has been discussed for decades. However, now is the moment when people face the changes that would lead to particular consequences, and the same decision would trace many more repercussions than it is possible to imagine. Although the problem exists and most interested parties are aware of it, we still have not reached the perfect state of society regarding sustainability. Changes are coming too slow in spite of the existing data, research results, and prediction. Therefore, it may still be unnatural for the community members in different countries worldwide to feel the support of the business.

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Society and its members need help more frequently than it is commonly assumed by businesses. Sustainability responds to the challenges that the continuously changing conditions of the world’s economy trigger. The dimensions of sustainability allow covering vital spheres of people’s lives because the economy and social interactions combined create the system of interrelations that involve all that is needed for living. Zyznarska-Dworczak (2020) emphasizes that society has a particular perception of business financial activity and consequent sustainable accountability, which makes it a critical success factor. On the other hand, the lack of conforming with the image that society members bear in mind can lead to negative repercussions.

Stakeholders: Auditors

One more stakeholder of sustainability accounting is the group of people who assess companies’ compliance to specific rules – auditors. According to Silvola and Vinnari (2020), auditors attempt to “promote sustainability assurance and establish it as a practice” (p. 1). Considering the primary purpose of this profession, assessing companies and their accounts on suitability and fairness of their performance, there is no doubt that these people are interested in spreading sustainability. As the laws are constantly improving to reflect the global goal of sustainability more thoroughly and ensure its achievability, auditors face more and more inconsistencies of reality with the desired image. The inner audit could prevent the negative consequences of these fast changes by revealing the small changes that should be done to improve the situation. This solution would allow companies to stay in the market without the necessity to close because of audits conducted by third parties.

In addition, auditors are interested in the successful implementation of sustainability accounting to as many businesses as possible because it is an indicator of auditors’ effectivity. In other words, the more companies auditors can refer to as reliable and trustworthy, the better they perform their duties, and the better their impact on the economy is. Thus, although auditors and their professional activity is not fully determined by the sustainability accounting in business, they are still the stakeholders of this modern trend.

Stakeholders: Government

Moreover, sustainability accounting affects the government and its structures, but in a way that is not that evident. To be more exact, sustainability accounting contributes to reaching a global goal, which is shared by the countries included in the United Nations (“Take action for the sustainable development goals”). Global aims require thorough research on decisions which should be implemented because the conditions may vary depending on the region of the world and the country (“Take action for the sustainable development goals”). Furthermore, the potential of each country’s economy differs depending on various reasons, which leads to different capacities regarding introducing and implementing new measures.

However, all participants must comply with international contracts; otherwise, sanctions may be used on those countries that do not take steps towards a better future. That is why governments are stakeholders of sustainability accounting, which provides the state with information on business performance and serves as an instrument of control. Introducing the strategies for development by the sustainability principles, the governments of different countries state that particular goals have to be achieved in the set periods. In some countries, the process of controlling the implementation of new measures may be complexified by huge territory or sophisticated managing schemes. Thus, partly sharing the responsibility with business solves the problem because sustainability can only be achieved with a complex approach.

Stakeholders: Employees

The final group of most evident stakeholders of sustainability accounting can be referred to as employees of the companies which implement sustainability policies. These people can also be included in the group named local community because practically, they are a part of it, not less than the consumers. However, it is rational to distinguish these two groups and discuss the effects both experience due to the implementation of sustainable accounting. Ozili (2021) suggests that an organization should reveal as much information on its operational performance as possible since employees may want to know something concerning the topic, and it should not remain a secret to them. Regarding the employees, they may be significantly affected by the company’s attitude to sustainability due to several reasons.

Firstly, their personal opinion on the necessity of introducing sustainability principles into every aspect of public life may differ from the opinion of the company’s management, claiming that it is not that essential on a micro-level. Thus, it might be more difficult for such a person to find a suitable workplace due to many companies not following the main path. Accordingly, such discrepancy may result in the worsening of the situation concerning the number of companies following the principles of sustainability accounting. At the same time, businesses would miss the opportunity to become more society-oriented, which would most probably lead to a loss of clients in the long run.

Secondly, sustainability may be included in a company’s corporate culture – personally, I believe it should be because the effectiveness grows – and the employees would get access to making steps towards sustainability themselves. In this case, the mentioned measure would be effective if the company’s personnel share its values and the global values and want to get more opportunities for contributing to reaching the global goal. Corporate culture usually has a powerful influence over the employees, so introducing even the most minor opportunities to increase the level of sustainability would be a tremendous stimulating measure for the workers. As a result, the company would employ staff who perceive sustainability as their personal goal and then reaching common purposes would take less time and effort.

Thirdly, employees of any company are primarily people with their own needs, desires and problems. Moreover, they are a part of the community whose members the business interacts with and whose opinions the further destiny of it depends. Therefore, it is essential to provide them with suitable conditions and show that constant changes for the better are one of the directions of the company’s strategic plan. Compliance with the sustainability accounting principles may show the employee that the company is reliable and responsible, which is a sign that it may provide a suitable workplace.

Furthermore, such an approach to assessing business intentions by its conformity with the global principles of sustainability can be used by other economic agents. For example, the government may evaluate a company’s plans by checking its completion of the sustainability goals and choose the one for state procurement based on this evaluation. In addition, other companies looking for partners to compete with aggressive marketeers or stay alive during a crisis may use the same indicator as a critical factor of the potential partner’s trustworthiness. In other words, the management of the business may be strongly affected by sustainability accounting because its income level would most certainly depend on the level of a company’s compliance with sustainable principles.

The regulations of sustainable accounting play a critical role in its implementation, and thus, the effects on the stakeholders depend on it. The stricter are the regulations of introducing changes in the company, the longer the implementation would last. Therefore, organizations should shift to more agile structures and alter their approach to changes if it is still negative. This would provide the required space and opportunities for the new stage of an organization’s evolution. At the moment, most companies are not ready for the implementation of sustainability principles.


To conclude, sustainable accounting is an essential step in the evolution of accounting. Sustainability as a global trend supported by the United Nations has spread widely, and now it is included in almost every comprehensive business policy – not mentioning the governmental programs. Sustainable accounting has a range of instruments, which allow assessing the level of sustainability, although they are not perfect and require timely improvements. Due to the phenomenon’s complexity and the interrelation of all spheres of life, which strengthens each year, accounting sustainability affects public life in general on both micro and macro levels. Therefore, as a crucial part of the companies’ performance and, therefore, the economy in general, sustainable accounting should be maintained and developed constantly because it triggers significant social, environmental, and economic changes.

Finally, the number of stakeholders groups of the sustainability accounting is huge and proves the significance of the issue. Implementing sustainability in the business processes of a company would most certainly affect its top management, employees, customers, and potential partners. In addition to this, the relations of the company with the state can be strongly influenced by its accordance with the sustainability rules. Therefore, as sustainability is considered to be a global goal, the measures should be undertaken on every level of economic interactions. As a consequence, the probability of reaching sustainable purposes would increase due to the growth of the number of supporting participants.


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