Business must make money and staying in business and prospering is a fundamental value of any for-profit enterprise. Companies therefore owe responsibility to their shareholders for improving profitability and enhancing shareholder value. At the same time, companies are required to take into account the interests of all their stakeholders that include customers, employees, investors, vendors, government and the society.

It is in this context that the management of a company needs to understand and recognise the importance of sustainable development approach to conduct business that can strengthen a company's intangible assets in a number of ways, which, in turn, leads to tangible shareholder value creation. A report on "Intangibles Economy" to the European Commission noted that intangibles such as research & development, proprietary know-how, intellectual property and work force skills, world-class supply network and brands are now the key drivers of wealth production.

Sustainable Development contributes to shareholder value in a variety of ways - not only through tangible contribution such as risk reduction and profitability improvement but also through intangibles such as brand equity, human capital and strategy execution. Every company is under intense pressure to create ever-increasing shareholder value by enhancing environmental and social performance. Sustainable development approach facilitates conducting business in a way that protects, sustains and enhances the human and natural resources needed for tomorrow. It is a set of responsibilities that contributes directly to an organisation's risk management profile and is sometimes also linked with corporate responsibility. As good corporate citizen, a company should not only be respecting the laws of the country in which it operates, but also aim to:

• Make the communities in which it works better places to live and do business;
• Be sensitive to the local communities cultural, social and economic needs;
• Protect and preserve the environment where it operates.

The investment community is increasingly recognising the importance of intangibles in the shareholder value equation. Leadership, strategy execution, brand, human capital, environment and health performances are all currencies in today's market place. With growing demand of stakeholders and investors for greater transparency and social accountability, sustainable development approach has attained considerable significance.

Stock exchanges at London and Johannesburg insist on sustainability reporting for listing of companies. In the US, Sarbanes Oxley Act has imposed several requirements for companies to be listed on stock exchanges. The pattern is same in the countries of the European Union.

Indian companies, having global ambitions and planning to set up operations abroad or acquire overseas companies or looking for foreign investments and listing on stock exchanges abroad, are increasingly realising the need for sustainable development approach for conducting their business. Further, global sourcing companies insist that their suppliers follow the principles of sustainable development. Companies in India are understanding that they have much to lose by not following sustainable development approach.

These trends have driven Indian companies to realise that sustainable development approach is central to corporate responsibility with passive philanthropy no longer a sufficient response to rising expectations.

There are several companies in India which have initiated sustainable development approach. For example, the Aditya Birla Group has a vision to actively contribute to the social and economic development of the communities in which it operates; and to build a better, sustainable way of life for the weaker sections of the society and raise the human development index of the country. Bharat Heavy Electricals Limited shares the growing concern on issues related to environmental, occupational health and safety; and is committed to protecting environment in and around its own establishment, and to providing safe and healthy environment to all its employees. Dr. Reddy's Laboratory Limited has taken an initiative to perform well on the three dimensions-economic, social and environment-to achieve sustainable growth and success.

This recognition by the corporate sector of the need and significance of sustainable development approach has created opportunities for chartered accountants to provide new service offerings.

Chartered Accountants can provide support to companies, government, tax authorities, regulators and stakeholders in augmenting the mechanism for sustainable development approach. A few examples of opportunities for chartered accountants in this regard are:

• Advisory services to companies for development of policies covering environmental, economic and social issues that would help to increase transparency in operations, protect corporate reputation and gain competitive advantage.
• ontribute in designing and monitoring procurement policies that form an important aspect of supply chain and is desirable to promote standard of sustainable performance amongst suppliers.
• Identification of appropriate code for a business and integration of operation of the code with existing management information system.
• Assist in benchmarking by helping timely preparation and publication of relevant and reliable information in a meaningful and comparable way.
• Proper planning for companies to reduce specific impacts so as to minimise the tax burden in view of emerging expansion of taxes and subsidies intended to promote sustainability. Assurance services for sustainability report

Today, successful companies are articulating their vision of sustainability and taking proactive measures to change mindsets about relationship between value creation and sustainable development. This is creating a new market focus for the accounting profession. Chartered Accountants can be involved with measurement, recording and interpretation of sustainability issues. A new vista is in the making.

The author is a member of the Institute. The views expressed herein are his personal views and do no necessarily represent the views of the Regional Council