Sustainability awaits true accountability, accounting professor says

Notre Dame accountancy professor Bill Nichols says someone once told him, “What you cannot measure you cannot manage, and what you cannot manage you cannot change.”

That may explain why sustainability concerns have been slow to change the business world. No consensus exists yet about how to measure responsible behavior in regard to economic, environmental and social issues, Nichols said today in a talk that was part of the Mendoza College of Business’s annual Ethics Week lecture series.

Nichols described a variety of emerging measures and report cards on sustainability that he covered in a course he taught for the first time in fall 2010, Sustainability: Accounting and Reporting.

One of the most widely known sustainability yardsticks belongs to the Global Reporting Initiative, a private nonprofit formed in 1997. Nichols said that 79 percent of the Fortune Global 250 companies issued corporate sustainability measures in 2008, and 77 percent of them used GRI standards.

In 2009 a total of 1,389 organizations issued GRI-based sustainability reports, he said. But, tellingly, only 131 of them – less than 10 percent – were U.S. corporations.

“The U.S. is way, way behind on this,” the accountancy professor said.

Nichols noted that new regulations from the U.S. Environmental Protection Agency require any entity that sends more than 250,000 metric tons of carbon dioxide equivalent into the atmosphere to begin reporting its emissions to the EPA. But budget battles in Congress threaten to cut the funding needed to monitor compliance.

This year’s Ethics Week talks began Monday, Feb. 14, with a presentation on Notre Dame’s own sustainability efforts. On Wednesday marketing professor Patrick Murphy was scheduled to talk about “Sustainability: A Marketing Emphasis,” and on Thursday, Peter Dawes, president and CEO of Composotech Structures, a developer of wind and solar facilities, was scheduled to discuss “Sustainable Energy: A Wind Energy Primer – Profits and Politics?”

All Ethics Week 2011 presentations are free and open to the public. They take place from 12:30 p.m. to 1:30 p.m. in the Giovanini Commons on the lower level of the Mendoza College of Business.

Sponsored by the College, the talks are designed to encourage the discussion of ethical matters in undergraduate and graduate business courses at Notre Dame in order to secure a foundation for future moral decisions inside and outside the classroom.

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