ACC 146 Sustainability and Strategic Audit
Student Activity Sheet #11
Name: _____________________________________________________________ Class number: _______
Section: ____________ Schedule: ______________________________________ Date: ______________
Lesson title: Motivation for Reporting About Sustainability Materials:
Lesson Objectives: Student Activity Sheets
1. Appreciate the internal and external motivation for
sustainability reporting. References:
Sustainability Reporting:
Concepts and Framework By:
Intosai Working Group
Study Tip: Comprehend not memorize. When Studying, paraphrase your notes instead of trying to
remember everything word-for-word. This will help especially for essay questions where elaboration is
necessary.
A. LESSON PREVIEW/REVIEW
1) Introduction
Greetings Buddy!
2) Activity 1: What I Know Chart
What do you know about this topic? Try answering the questions below by writing your ideas
under the What I Know column. You may use key words or phrases that you think related to the
questions.
What I Know Questions: What I Learned (Activity 4)
What are internal motivations in
sustainability reporting?
What are external motivations in
sustainability reporting?
ACC 146 Sustainability and Strategic Audit
Student Activity Sheet #11
B. MAIN LESSON
Activity 2: Content Note
Figure 1
Internal and external motivations for sustainability reporting
Effective management of sustainability risks and
opportunities
Internal Sustainable Vision, Strategy and Business Plans
Motivations
Improved management systems
Motivated workforce
Improved company reputation and brand value
External Investor attractiveness
Motivations Stakeholder engagement
Competitive advantage
Internal Benefits
1. Effective management of sustainability risks and opportunities
The process involved in sustainability reporting allows companies to know and better understand their
sustainability risks and opportunities. This would in turn result to a more effective assessment and
management of said risks and opportunities.
2. Sustainable Vision, Strategy and Business Plans
Sustainability reporting encourages companies to assess, and if necessary to update, their visions,
strategies and business plans to ensure that sustainability is embedded in their organizations. It gives
companies the opportunity to determine the necessary changes in their vision, strategies and
performance goals/targets for more sustainable operations.
3. Improved management systems
Sustainability reporting involves tracking and gathering data which when evaluated can identify the
areas that need improvement. In addition, public reporting on performance motivates companies to
improve in succeeding reporting periods, thus, resulting to improvement in management systems, such
as streamlining of processes, reduction of costs and over-all improvement in efficiency and productivity.
4. Motivated workforce
Creating a sustainability report requires a concerted effort from companies’ employees, exposing them
to the companies’ commitment to sustainability. Research have shown that there is a significant
positive relationship between perceived environmental performance and employee satisfaction.
Knowing that the company is environmentally and socially conscious increases morale and motivates
the workforce to work hard for the company.
ACC 146 Sustainability and Strategic Audit
Student Activity Sheet #11
External Benefits
1. Improved company reputation and brand value
Having a sustainability report indicates the companies’ commitment to full transparency and accurate
and complete reporting on both positive and negative news. Moreover, it shows the companies’ efforts
towards sustainability. This improves the company’s image and builds trust and respect for the
company. Thereby, improving company reputation and brand value.
2. Investor attractiveness
Institutional investors are now looking at the ESG practices of companies and makes this a key element
in their investment analysis and decisions. In the CFA Institute Survey conducted in 2017, 73% of the
survey respondents answered that they take into account ESG issues in their investment analysis and
decisions.9 Sustainability reporting, thus, provides institutional investors easy access to ESG
information of companies. At the same time, it allows companies to discuss their sustainability
performance in a clear and concise manner.
3. Stakeholder engagement
The process of sustainability reporting provides companies with opportunities for stronger engagement
with their stakeholders, which in turn can result in better relationships with them. Stakeholders would
feel empowered while the companies can gain valuable insights beneficial to their sustainability
journey.
4. Competitive advantage
Awareness on sustainability reporting is still quite low for most Philippine companies. As such, having a
sustainability report may provide companies with a competitive advantage. This competitive advantage
may be in any of the abovementioned internal and external benefits.
Case: Audit on the rational use of natural resources
This case study illustrates how financial savings can be attained by paying attention to energy
efficiency and water consumption. The economic benefits of sustainability policies are clearly shown by
calculating the possible savings.
The Brazilian Court of Audit carried out an audit on the actions of the Federal Public Administration in
order to promote the rational and sustainable use of natural resources, especially electricity, water and
paper. The audit evaluated public organizations’ adoption of the rules of public purchases regarding
sustainability criteria.
The audit found that the central government had not given a clear direction to adopt actions to promote
the sustainable use of natural resources. One of the consequences was great diversity in the promotion
of measures of efficiency and sustainability in the federal public bodies. As a result, the adoption of
actions with this purpose was mainly a consequence of some managers’ individual efforts rather than
ACC 146 Sustainability and Strategic Audit
Student Activity Sheet #11
because of government policy. Furthermore, it was noted that these programs were not well structured,
nor carried out in an effective way, and available financial resources were not used in promoting energy
efficiency in public buildings.
In addition, a low level of institutionalization in the management of sustainability was observed, and
awareness-raising campaigns were not widely used. The audit also verified that 73% of the researched
public bodies did not perform sustainable public tenders. Finally, it was noted that there was great
potential for the sustainable use of natural resources in the federal sphere that had not been used. The
audit found that the public sector could potentially make an annual saving of 20% in electric power,
which was equivalent to R$ 240 million (US$ 150 million) in 2009, and a saving of 22% in water, which
would represent R$ 67.5 million (US$ 42 million) per year. Thus, with electric power and water alone
there could be an annual economic saving of over R$ 300 million (US$ 190 million) per year.
Activity 3: Skill building
Identify whether the following is internal or external motivations for sustainability reporting
1. To gain more knowledge about the entity’s risk and risk management
2. To gather more information for decision making
3. To gain and strengthen trust to the entity
4. Improve accountability and transparency
5. To improve the employees and satisfaction and retention
6. To improve efficiency
7. To improve communication with different stakeholders
8. Create a positive and trustworthy image
9. Add value to the entity’s performance
Activity 4: What I Know Chart
Now let us check your final understanding of practitioner’s engagements. I hope that everything about
the topic is clear to you. This time you must fill out the What I Learned column.
ACC 146 Sustainability and Strategic Audit
Student Activity Sheet #11
Activity 5: Check for understanding:
1. What are the benefits of becoming a sustainable business?
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C. LESSON WRAP UP
You are done with this session! Let’s track your progress. Shade the session number you just
completed.
Activity 6: Think about learning! 🤔
1. Please read again the learning targets for the day. Were you able to achieve those learning targets?
If yes, what helped you achieve them? If no, what is the reason for not achieving them?
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2. In today’s session, which part of the lesson was least clear to you?
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