Key Terms
Sustainability
Meeting the needs of the present generation without compromising the ability of future generations to meet their own nee
Corporate Social Responsibility (CSR)
The set of actions firms take to assume responsibility for their impact on the environment and social well-being. Applie
Business Sustainability
Actions taken to sustain the business so it survives and thrives well into the future. The management goal of making dec
Sustainability Report
A report that presents the economic, environmental, and social effects that a corporation or organization was responsibl
Sustainable Development
Development that meets the needs of the present without compromising the ability of future generations to meet their own
Definition
An expansion of traditional financial reporting to capture a firm's social and environmental performance in addition to
Full-Cost Accounting
Accounting that recognizes all costs related to a product or service, including economic, environmental, and social cost
Life-Cycle Accounting
Assesses all costs from extraction of raw materials through final disposal. Similar to full-cost accounting but emphasiz
Externalities
Social, environmental, and economic costs in economics terminology that life-cycle accounting attempts to capture.
Primary Users
Shareholders and investors Secondary Users: Customers, suppliers, community, regulators
P/E Ratio (Price-Earnings Ratio)
Formula: Market price of stock divided by earnings per share Meaning: Indicates the amount an investor is willing to pay
Social Contract
The expectation that companies will hold to an unwritten contract with society as a whole. If a firm's actions harm soci
Stakeholder Theory
A corporation has an obligation to groups beyond just its shareholders. Accountability extends to a wider group of users
Stakeholder
A person or group with an interest or concern in some aspect of the organization. Includes employees, customers, governm
Environmental Sustainability
A situation in which rates of resource use can be continued indefinitely without permanently depleting those resources.