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# 9.2 Why sustainability is important to organisations

Organisations are facing increasing expectations to be accountable for ethical, social and environmental issues as well as to be managed in a sustainable way. There is strong recognition that environmental resources are limited, and stakeholders are paying closer attention to organisations’ ‘carbon footprint’ and recycling practices.

## Activity 9 Internal and external pressures on organisations to be sustainable

Allow around 20 minutes for this activity

What are the pressures (internal/external) on your organisation to be sustainable? Share your thoughts below.

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Internal pressures can be company policies, culture, goals, strategies and how they are driven by the leadership of the organisation. For example, if the CEO is highly supportive of environmental initiatives, all individual departments must consider this in their decision-making processes. External pressures come from outside the organisation so there may be governmental regulations to reduce waste or conserve resources such as water, or customer demand for more environment-friendly products or demand from shareholders and other stakeholders to meet environmental and social standards and address concerns about the environmental impact of operations. In addition to these factors, NGOs and media can shape consumer demand and increase pressure on organisations to be more sustainable and responsible in their operations.

The interactive figure below shows some of the potential environmental costs that organisations might incur.

Interactive Figure 4 Potential environmental costs
◄Contents►Next: 9.3 Why should a management accountant care about environmental issues?

OpenLearn - Fundamentals of cost accounting and environmental management accounting
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