Stakeholders worldwide expect the measurement and reporting of corporate sustainability performance. Numerous global organizations have been formed to develop measurement and reporting guidelines, aggregate data, and evaluate corporate sustainability performance. Professional accounting organizations have advocated the engagement of corporate accountants in sustainability measurement and reporting, but, with few exceptions, practicing management accountants have remained on the sidelines. Bacardi Limited has developed a sophisticated metric for measuring improvements in efficiency for sustainability variables.

    In the initial stages of its sustainability performance measurement and reporting, Bacardi Limited determined that the reporting guidelines of leading sustainability organizations produced erroneous measurements of the improvements the company was making in operational efficiency for its key sustainability variables. Bacardi Limited’s new metric corrects the measurement error. It is a new efficiency index that accountants will recognize as an application of flexible budgeting concepts to sustainability variables such as tons of greenhouse gas emissions and cubic meters of water consumed. Bacardi Limited’s innovation provides an illustration of both the need and the opportunity for management accountants to engage with environmental engineers and become directly involved with sustainability measurement and reporting.