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AccountAbility’s AA1000AP standard: a framework for integrating sustainability into organisations

Muhammad Bilal Farooq (Department of Accounting, Auckland University of Technology, Auckland, New Zealand)
Rashid Zaman (School of Business and Law, Edith Cowan University, Joondalup, Australia)
Muhammad Nadeem (Department of Accountancy and Finance, Otago Business School, University of Otago, Dunedin, New Zealand)

Sustainability Accounting, Management and Policy Journal

ISSN: 2040-8021

Article publication date: 19 March 2021

Issue publication date: 26 August 2021

970

Abstract

Purpose

This study aims to evaluate corporate sustainability integration by evaluating corporate practices against the sustainability principles of inclusivity, materiality, responsiveness and impact outlined in AccountAbility’s AA1000 Accountability Principles (AA1000AP) standard.

Design/methodology/approach

Data comprise 12 semi-structured interviews with senior managers of listed New Zealand companies. Findings are evaluated against AccountAbility’s principles of inclusivity, materiality, responsiveness and impact, which are based on a normative view of stakeholder theory.

Findings

In terms of inclusivity, stakeholder engagement is primarily monologic and is directed more towards traditional stakeholder groups. However, social media, which is gaining popularity, has the potential to facilitate greater dialogic stakeholder engagement. While most companies undertake a materiality assessment (with varying degrees of rigour) to support sustainability reporting, only some use it to drive planning and decision-making. Companies demonstrate responsiveness to stakeholder concerns through corporate governance and sustainability initiatives. Companies are monitoring and measuring their impact on stakeholders using sustainability key performance indicators (KPIs). However, measuring traditional metrics is easier than measuring areas such as the community. In rare instances, the executive’s remuneration is linked to these sustainability KPIs.

Practical implications

The study findings offer useful examples of the integration of sustainability into corporate processes and systems. Practitioners may find the insights useful in understanding how sustainability is currently being integrated into corporate practices by best practice New Zealand companies. Regulators may consider incorporating AA1000AP into their corporate governance guidelines. Finally, academics may find the study useful for teaching business and accounting courses and to guide the next generation of business managers.

Originality/value

First, the study brings together four streams of research on how sustainability reports are prepared (inclusivity, materiality, responsiveness and impact) in a single study. Second, the findings offer novel insights by evaluating corporate sustainability against the requirements of a standard that has received little academic attention.

Keywords

Acknowledgements

The authors would like to thank the reviewers of Academy of Management, Annual Meeting – 2019 Boston, USA, participants of 23rd New Zealand Finance colloquium hosted at Lincoln University, New Zealand and the participants of the 8th New Zealand Sustainability Accounting Research Symposium 2018, organised by Department of Accounting, University of Otago and Annual Postgraduate Conference (2018), Lincoln University for their helpful comments/suggestions.Compliance with ethical standards.The authors confirm that the interview instruments of this research were reviewed and approved by the Lincoln University Human Ethics Committee, New Zealand.

Citation

Farooq, M.B., Zaman, R. and Nadeem, M. (2021), "AccountAbility’s AA1000AP standard: a framework for integrating sustainability into organisations", Sustainability Accounting, Management and Policy Journal, Vol. 12 No. 5, pp. 1108-1139. https://doi.org/10.1108/SAMPJ-05-2020-0166

Publisher

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Emerald Publishing Limited

Copyright © 2021, Emerald Publishing Limited

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