ACCA Applied Knowledge · Business and Technology

Sustainable business practices: formula sheet

Full chapter guide

Key formulas

Brundtland definition: Sustainable development = meeting the needs of the present without compromising the ability of future generations to meet their own needs; Source: Brundtland Commission report, 1987. Quote the two halves: present needs and future generations.
Triple bottom line: Triple bottom line = People + Planet + Profit; Social, environmental and economic performance. Also called the three Ps.
UN Sustainable Development Goals: 17 goals, adopted 2015, target date 2030; You do not need to memorise all 17. Know the number, the date and several examples that link to business.
Carroll's CSR pyramid (bottom to top): Economic → Legal → Ethical → Philanthropic; Economic: be profitable. Legal: obey the law. Ethical: do what is right and fair, even if not required. Philanthropic: give back through donations and community support, which is desirable but voluntary.
Arguments for CSR: Reputation + customer loyalty + staff attraction and retention + risk reduction + long-term value; Also fewer regulatory problems and stronger stakeholder relationships.
Arguments against CSR: Cost + diversion from profit + managers' duty to shareholders + greenwashing risk; Also: it may not be the business's role, and benefits are hard to measure.
CSR versus sustainability: CSR = responsible behaviour towards stakeholders; Sustainability = long-term balance of economic, social and environmental needs; Overlapping ideas, not identical. Do not use them as exact synonyms.
Carbon footprint (basic calculation): Emissions (tonnes CO2e) = Activity data × Emission factor; Activity data is the amount of fuel, electricity or distance used. The emission factor converts it to CO2e. Use the factor given in the question.
Six capitals of integrated reporting: Financial, Manufactured, Intellectual, Human, Social and relationship, Natural; Learn all six. Questions often ask you to match an example to a capital.
Greenhouse gas scopes: Scope 1 = direct; Scope 2 = purchased energy; Scope 3 = other value-chain emissions; Scope 3 is usually the largest and hardest to measure.
ESG components: E = Environmental; S = Social; G = Governance; Place each example in the correct letter.
Impact-to-accountability chain: Impact → affected stakeholder → control tool → measurement and audit → report; Use this chain to structure any scenario answer. There are no numerical formulas in this topic.
ISO 14001 scope: ISO 14001 = standard for an environmental management system, not a performance target; Certification shows a system is in place and followed. It does not guarantee low pollution.
Environmental audit purpose: Audit = compare actual practice with policy, targets and legal requirements; It can be internal or external and may lead to corrective action.
Greenwashing test: Claim without evidence, or selective or misleading claim = greenwashing; Look for vague wording, selective focus and missing verification.

Quick revision

Sustainable development meets present needs without compromising future generations' ability to meet theirs.
The triple bottom line looks at people, planet and profit.
Stakeholders are groups affected by or able to affect the organisation.
CSR is a business's responsibility for its impact on society and the environment beyond legal minimums.
Ethics concerns principles of right and wrong behaviour, and it is wider than following the law.
Sustainability strategy should be built into core objectives, not added as a side project.
Reporting should be relevant, reliable and comparable so stakeholders can judge performance.
Measures can cover areas such as emissions, energy use, waste, employee welfare and community impact.
Accountability means being answerable to stakeholders for actions and their effects.
Read each option fully, as one changed word can turn a true statement into a false one.
In multiple response questions, select exactly the number of options the question states.

Common mistakes

Defining sustainable development as only protecting the environment. Fix: Remember it covers social and economic needs too. The Brundtland definition is about needs and future generations, not just nature.
Treating the triple bottom line as three separate profit figures only. Fix: Understand it as three areas of performance. Social and environmental results are often not measured in money.
Using CSR and sustainability as exact synonyms. Fix: Say CSR is about responsible behaviour towards stakeholders, and sustainability is about long-term impact on people, planet and economy.
Putting philanthropy at the base of Carroll's pyramid. Fix: Remember the order: economic first, then legal, ethical and philanthropic last.
Treating sustainability as only an environmental issue. Fix: Remember it covers people, planet and profit. Labour conditions and community impact count.
Confusing recycling with a circular economy. Fix: Recycling is one tool. A circular economy redesigns products and systems so materials stay in use and waste is avoided.
Treating ESG and CSR as identical. Fix: Say ESG is a set of measurable factors investors assess. CSR is the broader idea of a company's responsibility to society.
Putting purchased electricity in scope 1. Fix: The emissions occur at the power station, not at your site. Purchased energy is scope 2.
Saying ISO 14001 proves a company has low environmental impact. Fix: Remember it certifies a management system. A firm with a certified system can still have high impact if its targets are weak.
Confusing an environmental audit with a financial audit. Fix: An environmental audit checks environmental policies, targets and legal compliance, not the financial statements.

Exam tips

Learn the Brundtland definition in one sentence with both halves: present needs and future generations.
In scenario questions, label each fact as people, planet or profit before choosing an answer.
For multiple response questions, select exactly the number stated and do not guess extra options.
Know the SDGs as voluntary global goals: 17 goals, 2015, 2030. Be ready to link one or two to business actions.
Do not confuse this topic with corporate social responsibility or ethics. Sustainability is about long-term impact on the environment, society and economy.
Learn Carroll's pyramid in order and match each layer to a one-line example.
In objective tests, 'beyond the law' is the signal that separates CSR from compliance.
Write for-and-against points in pairs and link each to the stakeholder in the scenario.