Measuring the Impact of Sustainability Efforts Some economists and financial executives arebeginning to consider the possibility of reporting sustainability costs and benefits in a more comprehensive manner. The Nobel prize–winning economist, Joseph Stiglitz, and other economistshave suggested that nations move beyond the traditional gross domestic product (GDP) measuresof a nation’s output. They argue that GDP should include environmental assets and liabilities. Forexample, the marshlands in many parts of the United States are key to aquatic life, plant life, erosioncontrol, and storm protection, providing billions of dollars of value. So development on these marshlands should be balanced against those values that would be lost in development. An example is thedevelopment of the wetlands of southern Louisiana. As a result of this development, New Orleansand southern Louisiana are now much more vulnerable to storms. Some have estimated that the valueof those wetlands would be in the trillions of dollars if the wetlands had been there to reduce theimpact of Hurricane Katrina in 2005. Canada, Germany, Mexico, Australia, and Japan are among the24 countries that use some form of “natural capital accounting.”Individual companies are also looking at the use of this type of sustainability accounting. Forexample, the sportswear company Puma has considered including on each product tag the estimatedmonetary value of the environmental cost of the production of the product.Required List what you would consider to be some of the advantages and disadvantages of the morecomprehensive sustainability reporting proposed by some economists for governments. What are someof the advantages and disadvantages of the type of sustainability reporting being considered by Puma forindividual companies?
Measuring the Impact of Sustainability Efforts Some economists and financial executives are
beginning to consider the possibility of reporting sustainability costs and benefits in a more comprehensive manner. The Nobel prize–winning economist, Joseph Stiglitz, and other economists
have suggested that nations move beyond the traditional
of a nation’s output. They argue that GDP should include environmental assets and liabilities. For
example, the marshlands in many parts of the United States are key to aquatic life, plant life, erosion
control, and storm protection, providing billions of dollars of value. So development on these marshlands should be balanced against those values that would be lost in development. An example is the
development of the wetlands of southern Louisiana. As a result of this development, New Orleans
and southern Louisiana are now much more vulnerable to storms. Some have estimated that the value
of those wetlands would be in the trillions of dollars if the wetlands had been there to reduce the
impact of Hurricane Katrina in 2005. Canada, Germany, Mexico, Australia, and Japan are among the
24 countries that use some form of “natural capital accounting.”
Individual companies are also looking at the use of this type of sustainability accounting. For
example, the sportswear company Puma has considered including on each product tag the estimated
monetary value of the environmental cost of the production of the product.
Required List what you would consider to be some of the advantages and disadvantages of the more
comprehensive sustainability reporting proposed by some economists for governments. What are some
of the advantages and disadvantages of the type of sustainability reporting being considered by Puma for
individual companies?
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