Last year marked the 50th anniversary of Milton Friedman’s seminal article, “The Social Responsibility of Business Is to Increase Its Profits.” The essay focused primarily on shareholders and the priority of profits as an appeal to free market capitalism. This idea was generated during the height of the Cold War and the ideological struggle between capitalism and communism. In recent times, it has become increasingly clear that profit maximization alone does not necessarily equate to societal welfare maximization.

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As the consequences of capitalism on climate and other environmental and social issues have become understood by individuals and organizations worldwide, corporate social responsibility (CSR) and sustainability reporting have become increasingly important in the business world. Companies that provide investors with information about sustainability metrics (e.g., the 17 U.N. Sustainable Development Goals) have been shown to have a competitive advantage in today’s economy. (See, for example, KPMG, KPMG International Survey of Corporate Responsibility Reporting 2017https://bit.ly/2XKEruX, 2017; D.S. Dhaliwal, O. Zhen Li, A. Tsang, Y.G. Yang, “Voluntary nonfinancial disclosure and the cost of equity capital: The initiation of corporate social responsibility reporting,” The Accounting Review vol. 86, no. 1, pp. 59-100, 2011.) The increased significance of these reports is supported by data showing that more and more companies are releasing sustainability reports. According to the AICPA, the number of S&P 500 companies that published a sustainability report increased from 20% in 2011 to 85% in 2017 (AICPA, “CPAs. The preferred choice for assurance on sustainability information,” 2018; “Sustainability: The world wants it. Can you deliver? Tap into increasing demand for this valuable emerging service,” 2018), as well as anecdotal evidence, including as the introduction of sustainability scores for environment (E), social (S), and governance (G) on the Yahoo.com Finance Platform.

As the prevalence of sustainability reporting has increased, so has the need for accounting professionals to work with this new type of disclosure. Accountants often play an integral part in the preparation of sustainability reports (especially for firms that engage in integrated reporting), and they are increasingly involved as providers of external assurance on reported sustainability metrics (M. Murphy, “A Growing Demand for Assurance in Sustainability Reporting,” The CPA Journal, vol. 84, no. 3, p. 80, 2014). It makes sense that the same individuals and entities that audit companies’ financial reports could also verify the accuracy and completeness of their sustainability reports. Several reports form the AICPA and the Association of Chartered Certified Accountants (ACCA) highlight how the accounting profession will be employed to provide assurance on sustainability reports (AICPA, 2018; ACCA, “Accountants, Purpose and Sustainable Organisations,” April 2020).

With the prospect of accountants increasingly becoming involved in the preparation and assurance of sustainability reports, the profession will naturally seek accounting graduates well versed in sustainability accounting. The importance of sustainability in the accounting curriculum has been highlighted by various statements from the ACCA, the Chartered Global Management Accountant (CGMA), and the Association to Advance Collegiate Schools of Business (AACSB). According to these organizations, businesses need to deliver against the 17 UN Sustainable Development Goals (SDG), and accountants as score-keepers should be tasked with planning, implementation, and certification (CGMA, “Creating a sustainable future: The role of the accountant in implementing the Sustainable Development Goals,” April 2018; ACCA 2020; AACSB, “2020 Standards for AACSB Business Accreditation,” 2020). The AACSB International, the highest accreditation body for business schools worldwide, references sustainability-adjacent topics in its standards and accreditation philosophy, stating that “society is increasingly demanding that companies become more accountable for their actions, exhibit a greater sense of social responsibility, and embrace more sustainable practices.” The AACSB describes a quality business school as one that has a positive societal impact by focusing on social, economic, and environmental issues, which are characteristics directly related to sustainable practices (AACSB 2020). This is emphasized even further in a blog post on the AACSB website where the coronavirus crisis is used to introduce sustainability goals into a business curriculum (https://bit.ly/3gjA68s). In the business community, CEOs also view education as critical in developing the necessary skills associated with sustainability integration into core business (P. Lacy, A. Haines, R. Hayward, “Developing strategies and leaders to succeed in a new era of sustainability,” Journal of Management Development, vol. 31, no. 4, pp. 346–357, 2012).

Despite the calls from the business community and the AACSB, relatively few educators have taken actions to integrate sustainability into the business and accounting curricula. Though some institutions have made significant commitments to furnishing accounting graduates with a better understanding of sustainability reporting (B. Porco, “Seven Easy Ways to Introduce Sustainability Reporting into Existing Accounting Curricula,” The CPA Journal, vol. 89, no. 9, pp. 12-13, 2019; see also https://www.youtube.com/watch?v=tonVGMZ8guo), the majority have not. Only a very small number of sustainability-related courses currently exist in the accounting curricula in North American universities [J. Bergner, S. Pippin, J. Weber, J. and J. Wong, “The Inclusion of Sustainability in the Accounting Curriculum,” The CPA Journal, vol. 86, no. 6, pp. 44-47, 2016; C. Cho, A. Kim, M. Rodrigue, T. Schneider, “Towards a better understanding of sustainability accounting and management research and teaching in North America: a look at the community,” Sustainability Accounting, Management and Policy Journal, vol. 11, no. 6, pp. 985–1007, 2020].

Some authors and publishers have integrated sustainability into textbooks to support faculty in their classroom endeavors, and educators have access to new and innovative materials to be employed in the classroom (Bergner et al., 2016). The authors do not, however, believe that most accounting programs are taking advantage of these resources to prepare students for the broader role they will face in the accounting profession. To assess the extent to which accounting students are gaining an understanding and appreciation of sustainability as it relates to their future roles as accounting professionals, the authors conducted a survey of current students. The results support an urgent need for accounting educators to integrate sustainability into their courses, and suggest that students should be added to the growing list of stakeholders who demand sustainability within the curriculum.

Student Survey

The authors surveyed 164 students from three different universities in the western United States asking them a series of questions designed to elicit their awareness of and interest in sustainability accounting. The first two survey questions asked the students whether they know what a sustainability report is and how competent they feel in the field of sustainability accounting. As illustrated in Exhibits 1 and 2, only about two-thirds of the student population believe they know what a sustainability report is, and almost none consider themselves competent or well-versed in sustainability accounting. This implies that even students who claim to know what a sustainability report is do not see the connection between sustainability and accounting.

Exhibit 1

Students’ Responses to “Do you know what a Sustainability Report is?”

Exhibit 2

Students’ Responses to “How Competent are You in the Field of Sustainability Accounting?”

The next questions attempted to gauge student demand for education in sustainability accounting. When asked whether they believe employers are looking for accounting graduates who know something about sustainability accounting, students were generally unsure. This might be because most students are unfamiliar with the concept, or because they do not know employers’ wishes. However, 35% of the respondents believe that employers are looking for graduates with such knowledge, whereas only 7% think that employers are not (see Exhibit 3).

Exhibit 3

Students’ Responses to the Question “Do you believe employers are looking for accounting graduates who know something about sustainability accounting?”

Although general awareness of sustainability accounting is low, students do seem to be interested in learning more. A substantial majority (70%) indicated that if sustainability accounting were offered as an elective, they would take the course. Although most students claimed that they would sign up for Sustainability Accounting, many ranked this course lower than other possible accounting electives. The following lists those references by mean rank:

  • Fraud Examination;           2.84
  • Advanced Auditing;           3.36
  • Advanced Auditing;           3.36
  • Data Analytics;             3.48
  • Advanced Taxation;           3.60
  • Sustainability Accounting;        3.70
  • Governmental and Nonprofit Accounting;  4.01

This ranking suggests that more students might learn about the topic if it were integrated into existing courses as opposed to being offered as a stand-alone course.

The final survey question asked, “As an accountant, do you want to make the world a better place?” A vast majority of students (93%) responded “Yes.” Young adults do desire to change the world for the better, and sustainability accounting is considered a valuable professional skill that CPAs can use to help achieve this goal (E. Huffman, “How young CPAs can help save the world,” Journal of Accountancy, March 27, 2017, https://bit.ly/2XK1OF1, 2017). Although students may not be fully aware of sustainability accounting, exposing them to this topic can raise awareness of additional opportunities to provide public service within their profession.

Exhibit 4

Students’ Responses to the Question “If sustainability accounting were offered at your school as an elective (and it would fit in your schedule), would you sign up for this class?”

The Challenge for Academia

As the role of a business has evolved to focus not only on profits, but also environmental and societal impacts, the business community is calling for accounting graduates to have knowledge of sustainability as it relates to accounting. These survey results indicate that accounting faculty should do more to respond to this call. Most of the students surveyed want to make the world a better place, and most are interested in learning about sustainability. However, many have not yet been taught about it and most are unaware of employer demand for this knowledge. Based on these findings, we challenge accounting faculty to take action and provide two recommendations.

First, accounting faculty should address the lack of student awareness of the link between accounting and sustainability reporting. Because many universities face resource constraints, we encourage accounting faculty to introduce sustainability topics in existing courses. Introductory financial and managerial accounting classes should form the foundation of students’ understanding of the role of today’s accountant. These courses should define the role of an accountant as one who analyzes, summarizes, communicates, and assures an entity’s impact on the economy, environment and society. Introducing sustainability concepts in these first accounting classes sets the tone and enables faculty to integrate more advanced topics later on. One example includes incorporating data analytics to examine linkages between measures of sustainable operations and profitability in intermediate managerial or cost accounting courses (Po-Chang Chen, B. Ballou, J. Grenier, and D. Heitger, “Sustainability Assurance’s Link to Reporting Quality,” Journal of Accountancy, October 10, 2019).

Second, accounting faculty should inform students of employers’ demand for sustainability accounting knowledge. In addition to integrating sustainability content within accounting courses, faculty should call on members of their advisory boards and others within the professional community to visit classes or provide materials that can help students understand that the profession values candidates who possess a background in sustainability accounting.

Meeting the Challenge

As sustainability becomes an integral part of business strategies, the accountant’s role in society is broadening. Accounting academics must meet the challenges presented by the dynamic environment of the accounting profession. Accounting curricula can help students develop skills that keep them relevant and desired by employers.

Student demand for sustainability accounting instruction in the classroom will likely increase as they become more aware of the increasing demand in the accounting workforce. As educational materials on sustainability are becoming more readily available, colleges and universities should take advantage and incorporate this topic into their curricula. Several courses are particularly well-suited to integrate sustainability topics, starting with introductory financial and managerial accounting courses. We hope this survey will motivate educators to integrate sustainability into the accounting curriculum, in order to prepare accounting graduates for their broader role in the business world.

Sonja Pippin, PhD, CPA is a professor of accounting at the University of Nevada, Reno, Nev.
Matthew Stallings, PhD is an assistant professor of accounting at Boise State University, Boise, Idaho.
Jessica Weber, PhD is an associate professor of accounting and computer information systems at the University of Northern Colorado, Greeley, Col.
Jeff Wong, PhD, CPA is a professor of accounting and department chair, also at the University of Nevada.