Flexible Budgeting Applied to Sustainability Measurements
This report shows how flexible budgeting can be applied to measuring sustainability performance and how to integrate sustainability into a company’s management practices and information system.
Financial and management professionals who are trying to more accurately measure sustainability performance can use this report to:
- Show how the globally accepted practice for measuring sustainability performance produces materially erroneous measurements.
- Discuss Bacardi Limited’s innovative performance metric that applies flexible budgeting concepts to the measurement of efficiency changes in sustainability variables such as electricity consumption, water consumption, and greenhouse gas emissions.
- Examine the implementation of Bacardi Limited’s Corporate Responsibility Initiative, which includes its environmental sustainability performance.
- Provide insights on how management accountants can make important contributions to the measurement and reporting of sustainability performance.
Management accountants must be:
- Aware of increasing stakeholder expectations for sustainability performance reporting and how the globally accepted practice is flawed.
- Prepared to apply flexible budgeting concepts to calculate efficiency improvement for a sustainability key performance indicator (KPI), such as energy consumed, even when activity is measured by differing scales.
- Familiar with how sustainability performance improvement can be integrated into a company’s management practices and information system.