Sustainability Accounting: Measuring What Matters

“Just as the markets have a standard for material financial information—US GAAP—the markets need a standard for material sustainability information.” - Allan Beller (2016) Former Director of the SEC’s Division of Corporation Finance U.S. GAAP—Generally Accepted Accounting Principles—provide a strong framework for financial reporting in the U.S. These standards help companies prepare relevant, reliable, and comparable financial reports which are used by investors and other stakeholders to make resource allocation decisions. This paper explains why investors are increasingly seeking environmental, social, and governance (ESG) information to make resource allocation decisions. The paper begins with a description of the evolution of ESG reporting and then discusses a shift to a financial focus on ESG performance. The third section discusses investors’ needs for quality ESG information. Section four explains the critical role of the Sustainability Accounting Standards Board (SASB), an organization that provides rigorous, industry-specific sustainability accounting standards. The final section contends that Jesuit business schools are uniquely positioned to educate students about the intersection of CSR and profitability and provides suggestions for integrating sustainability accounting into Jesuit business education.