V O LU M E 2 9 | N U M B E R 2 | S P RIN G 2 0 1 7

Journal of
APPLIED CORPORATE FINANCE

In This Issue: Sustainability and Shareholder Value

How We Invest 10 Michael Bloomberg and Carl Pope

SASB 2016 Symposium 16 Tim Koller, McKinsey & Company, with Jonathan Bailey,
Sustainability and Rewriting the Book on Valuation: An Interview with Tim Koller FCLT Global

SASB 2016 Symposium Roundtable 22 Keith Higgins, Securities and Exchange Commission; Alan Beller,
The SEC and Improving Sustainability Reporting Cleary Gottlieb; and John White, Cravath, Swaine, & Moore.
Moderated by Mary Schapiro, Promontory Financial Group

SASB 2016 Symposium Roundtable 32 Ted Eliopoulos, CalPERS; Kristi Mitchem, Wells Fargo Asset
The Next Wave of ESG Integration: Lessons from Institutional Investors Management; Chris Ailman, CalSTERS; and Michelle Edkins,
BlackRock. Moderated by Janine Guillot, Sustainability
Accounting Standards Board

SASB 2016 Symposium Roundtable 44
Analysts’ Roundtable on Integrating ESG into Investment Decision-Making
Dan Hanson, Jarislowsky Fraser Global Investment
Management; Jennifer Bender, State Street Global Advisors;
Robert Lamy, CFA Institute; and Tom Lyons, Montgomery
Fixed Income. Moderated by Bruno Bertocci, UBS Asset
Management

Far Beyond the Quarterly Call: CECP’s First CEO-Investor Forum 56 Tim Youmans and Brian Tomlinson, CECP Strategic Investor
Initiative

Evaluating Sustainable Competitive Advantage 70 Baruch Lev, New York University

The Purpose of the Firm, Valuation, and the Management of Intangibles 76 Bartley J. Madden

Investing in the UN Sustainable Development Goals: Opportunities for 87 Willem Schramade, NN Investment Partners
Companies and Investors

Evaluating the Effectiveness of Sustainability Disclosure: 100 Arturo Rodriguez, Henrik Cotran, and Levi S. Stewart,
Findings from a Recent SASB Study Sustainability Accounting Standards Board

Lies, Damn Lies, and Statistics: Why a Widely Used Sustainability Metric 109 Jon Bartley, Al Chen, Stephen Harvey, Scott Showalter,
Fails and How to Improve It Gilroy Zuckerman, North Carolina State University, and Levi
Stewart, Sustainability Accounting Standard Board
Lies, Damn Lies, and Statistics: Why a Widely Used
Sustainability Metric Fails and How to Improve It
by Jon Bartley, Al Chen, Stephen Harvey, Scott Showalter, Gilroy Zuckerman, North Carolina State
University, and Levi Stewart, Sustainability Accounting Standard Board
bout 75% of the S&P 500 companies produced
A sustainability reports in 2015, up from 20% in
2011, according to the Governance & Account-
ability Institute.1 These corporations publish
sustainability reports that track their performance in key
performance indicators or KPIs, e.g., water use, greenhouse gas
[GHG] emissions, waste generated. Nearly all of these compa-
nies report a total inventory for key parameters—that is, the
total amount of resource consumed or waste generated. This is
an important metric in the sense that it measures the entity’s
“global footprint” for that parameter. But because companies
tend to be dynamic, changing in size and scope from year-to-
year, total inventory does not measure what investors really want
to understand: namely, the change in a company’s overall effi-
ciency in managing key sustainability parameters.2
Average intensity is the most widely used metric
for measurement of a company’s efficiency regard-
ing sustainability parameters. This metric normalizes
the total inventory against a relevant operating
parameter, typically the company’s total revenue or produc-
tive output, e.g., CO 2 per ton of product produced.
Average intensity is most useful in providing perspective on an
industry sector’s resource consumption and waste production
relative to other sectors. Its use in comparing companies within
an industry sector is more limited because of differences in the
scope of activities and sourcing policies among the companies.
Virtually all interested parties desire information on
how well a company manages its sustainability performance,
i.e., is it becoming more efficient in the consumption or
production of critical sustainability parameters? Sustain-
ability organizations such as the Global Reporting Initiative
(GRI) and the Sustainability Accounting Standards Board
(SASB) provide reporting frameworks and identify
metrics intended to enhance the creditability of sustain-
ability reports with a wide range of stakeholder groups.3
While all their efforts are necessary for global acceptance, our
research underscores the need to provide guidance on how
such metrics should be calculated in addition to the specific
metrics to be reported. Further, it is critically important that
senior sustainability managers use metrics that accurately
1. Wall Street Journal, November 12, 2015.
2. The Greenhouse Gas Protocol, 2014.
Journal of Applied Corporate Finance • Volume 29 Number 2 Spring 2017
reflect the corporation’s performance in managing resources
and reducing waste. An all-too-common error is to equate a
change in average intensity with a change in overall efficiency.
Average Intensity is Not a Reliable
Measure of Efficiency
Understanding what average intensity actually measures (and
what it does not) is critically important to corporate manag-
ers. If a company persists in continuing costly but ineffective
programs because average intensity falsely indicates that it
is making good progress, management is wasting time and
money, and possibly misleading investors. Conversely, a
company may abandon effective programs because average
intensity is not improving and the management information
system fails to accurately report that the efficiency of sustain-
ability programs actually improved.
Although the change in a company’s average efficiency
for a sustainability parameter is a major component of the
change in average intensity, many other factors contribute to
the change in average intensity, notably (1) outsourcing and
insourcing, (2) changes in facility utilization, and (3) changes
in product or service mix. These three factors frequently
obscure the actual efficiency improvement achieved by a
company’s sustainability program.
Outsourcing and In-sourcing Impacts
Average Intensity
Outsourcing and in-sourcing have an obvious impact on aver-
age intensity, assuming outsourced activities are not included
in company reporting systems. These practices result in a
simple manipulation of the metric’s numerator, denominator,
or both. For example, if a water-intensive manufacturing step
is moved to a third-party (outsourced) while the final produc-
tion remains on site, average intensity will decrease because
the water usage on site decreases while production remains the
same. Similarly, if a low-intensity process step is outsourced,
average intensity will increase because the remaining processes
have higher intensities. Example 1 Illustrates how outsourc-
ing and in-sourcing actions can result in significant changes
in average intensity without any measured change in true effi-
3. Global Reporting Initiative (GRI) Standards at https://www.globalreporting.org/
standards and Sustainability Accounting Standards Board (SASAB) Standards at https://
www.sasb.org/.
109
Example 1: The Impact of Outsourcing on Average Intensity
A cme Company produces widgets in a three step process:
1) component manufacturing, 2) sub-unit fabrica-
tion, where the components are assembled into widget
sub-units, and 3) final assembly, where the sub-units are
assembled to complete the widget. In the base-year, the
company produces 1,000,000 widgets. The company
consumes 1,000,000 liters (L) of water resulting in a base-
year average intensity of 1.0 L/widget produced. Process
step 1 consumes 600,000 L, step 2 consumes 300,000 L
ciency. In this instance, the change in average intensity results
from nothing more than a change in what is being included or
excluded in the numerator, the denominator, or both.
One company, Bacardi Limited, first recognized this
distortion when the bottling of a major product line was moved
to a contract manufacturer. As a result, Bacardi’s average water
intensity increased because the outsourced product bottling
had a lower water intensity than distilling. The impact was
therefore much larger in the denominator (units of water
bottled) than in the numerator (water consumed). Recogniz-
ing and adjusting for this type of distortion is important to
ensure accuracy and confidence in reporting results.
Change in Facility Utilization Impacts Average Intensity
Facility utilization is an issue familiar to cost accountants
and relates to the identification of the facility’s fixed costs
that are added to the variable costs to calculate total prod-
uct costs. This fixed versus variable distinction is relevant
to the measurement of sustainability parameters as well.
Resource consumption and waste generation also contain
fixed components that are independent of production quan-
Example 2: Impact of Facility Utilization on Average Intensity
X YZ, Inc. produces a cleaning agent, “Wonder Dust”,
at a modern production facility. In the base-year, the
plant operated at 72% of capacity and produced 1,000,000
tons of product. The plant consumed 1,000,000 (L)iters
of water during the year: 400,000 L were fixed water usage
for restroom facilities, cafeteria, locker rooms and irriga-
tion; and 600,000 L were variable water usage resulting
in average usage of 0.6 L of water per ton of product. The
average intensity during the base-year was therefore 1.0
L/ton of product produced. Wonder Dust experienced
a sharp growth in demand and the plant was instructed
to increase its production by 25% to meet demand and
110 Journal of Applied Corporate Finance • Volume 29 Number 2 Spring 2017
and step 3 consumes 100,000 L. In year 2, the company
produces the identical number of widgets, but outsources
step 1 to an overseas company. Steps 2 and 3 are completed
within Acme’s production facility, with the same water use
efficiency, i.e., the company consumes 400,000 L of water
to complete the production of 1,000,000 widgets. Acme
has done nothing to improve its water use efficiency, but
its average intensity has been reduced 60% to 0.4 L/widget
through outsourcing.
tity, and variable components that are directly related to the
amount of production.
For example, the quantity of water consumed per unit of
product consists of the direct variable water use, e.g., water
for cleaning and cooling the product and equipment, and
an allocation of the facility’s water use that is fixed relative
to production, e.g., irrigation water for facility grounds. An
increase in production (higher facility utilization) results in
a smaller allocation of the fixed water use to each unit of
production, causing the overall average intensity of water use
to decrease. Although this is a positive outcome, there has been
no change in the actual efficiency of water usage. Example 2
demonstrates the potential for distortion of overall average
intensity as a measure of efficiency improvement caused by a
change in production volume.
Facility utilization generally reflects anticipated product
demand that is often a function of overall economic conditions.
Therefore, changes in facility utilization will often move in the
same direction across most of a company’s product lines, resulting
in a systemic shift in the average intensity when all the product
lines and activities are compiled across the corporation. Again,
replenish depleted inventories. In the following year, the
plant operated at 90% of capacity, producing 1,250,000
tons of product. There was no change in water use effi-
ciency (fixed nor variable); therefore the plant consumed
400,000 L of water for fixed usage, and 750,000 L of
water directly related to production for a total consump-
tion of 1,150,000 L. The company’s average intensity for
water consumption therefore dropped by 8% to 0.92 L/
ton even though no improvement in efficiency (fixed or
variable) was achieved. If instead the company decreased
production by 20% to 800,000 units, the average inten-
sity would increase by 10% to 1.1 L/unit.
Example 3: The Impact of Product or Service Mix on Average Intensity
A BC Corporation has two devices, A and B, and each
contributes to overall water use. There is no change
in outsourcing or in-sourcing, nor is there any fixed water
use – all water use is variable. Manufacturing product A
requires 10 L of water per unit while B requires 1 L per
unit. In the base-year, the company produces 1,000,000
units of each product; total water consumption is there-
fore 11,000,000 L and the company’s average intensity was
5.5 L/unit. In the current-year, demand for product A has
decreased by 20% from the base-year while demand for
this factor directly causes average intensity to change without
any real change in underlying efficiencies. This was a common
problem for companies during the recent recession, when reduced
facility utilization tended to mask real improvements in efficiency.
Conversely, as demand picks up the reduction in average intensity
overstates efficiency improvements.
Change in Product or Service Mix Also Impacts
Average Intensity
Companies produce a variety of products and services that
contribute to their overall resource consumption or creation of
waste. Every product and service has a unique rate (or intensity)
for each sustainability parameter, and these rates will change
independently from year to year. The aim of efficiency programs
is to reduce these intensity rates. In the absence of any of the
distortions discussed above, the individual intensity rates will
provide accurate measures of the efficiency change for each
product or service from year to year. However, if the relative
mix of activities changes, a company’s overall average intensity
will not accurately reflect the change in a company’s overall effi-
ciency in managing that specific parameter. While outsourcing/
in-sourcing and facility utilization affect both the sustainability
intensities of individual products and services, changes in prod-
uct or service mix only impact overall average intensity when
activities are aggregated across the company. As illustrated in
Example 3, when the product or service mix shifts toward prod-
ucts or services that have lower intensities the company’s average
intensity will decrease, and vice versa even when no change
has occurred in the underlying product and service intensities.
This distorting effect was recognized by Bacardi Limited
when its scotch whisky distilling sites were instructed to increase
scotch production relative to other beverages to meet increas-
ing customer demand for scotch. This shift in product mix
had a large, negative distorting effect on the overall average
intensity of greenhouse gas emissions even though the company
4. The baseline is defined as the initial year a company adopts the flexible budgeting
method.
Journal of Applied Corporate Finance • Volume 29 Number 2 Spring 2017
product B has increased by 20%. The company produced
800,000 units of A and 1,200,000 units of B, and as a
result consumed 9,200,000 L of water. There was no
change in water use efficiency, but the company’s average
intensity decreased to 4.6 L/unit, a 16.4% reduction as a
result of the change in product mix. If the shift had instead
favored product A, i.e., it was up 20% while product B was
down 20%, the average intensity would have increased by
16.4% to 6.4 L/unit.
accomplished reductions in per unit emissions in substantially
all product lines including scotch. Because scotch distillation
produces more greenhouse gases per unit than the activities to
produce the company’s other beverage products, average green-
house gas intensity across all products was increased. The failure
of average intensity to accurately measure the real improve-
ment in the efficiency that Bacardi Limited was accomplishing
for all product lines led the company to explore a new, more
meaningful, efficiency metric for sustainability parameters that
is described below.
Real Change in Sustainability
Efficiency Can Be Measured
Most large companies are diverse and dynamic entities with
many activities that contribute toward resource consumption
and waste creation. These companies, over their life spans,
typically experience considerable change in the scale of their
operations as well as the mix of products and services offered.
Outsourcing, in-sourcing, and change in facility utilization
routinely accompany these changes. As a result, the change in
average intensity is not a reliable measure for change in overall
sustainability efficiency.
Companies that wish to accurately track their overall
efficiency in managing sustainability parameters can do so by
using a method that relies on flexible budgeting concepts that
are widely applied for financial management. This method,
which was jointly developed by Bacardi Limited and North
Carolina State University, is able to effectively eliminate all of
the distortions previously discussed, and so provide an accurate
measure of a company’s overall performance for each sustain-
ability parameter.
For example, to measure overall water-use efficiency, a
company needs to define the water use for every product and
service in terms of fixed and variable factors during the baseline
year.4 In any subsequent year, the total water used by each activ-
111
Example 4: The Flexible Budget Method vs. Average Intensity

T he performance measurements for the Base Year for the

combined business units appear below: Acme Divi-
sion (Widgets), XYZ Division (Wonder Dust) and ABC
Division (Device A and Device B). Average intensity is
calculated based on total revenues and, as shown below,
results in 81.3 Liters per $1000. The water use rate factors
are determined for each product line and listed in the two
columns at the far right of the table.

BASE YEAR
Variable W
Product Step Output Units Output Price $/Unit Rev ($000) Water, L Fixed Water, L Rate, L/Unit
Widgets 1 Units 1,000,000     600,000 0 0.6
  2 Units 1,000,000     300,000 0 0.3
  3 Units 1,000,000     100,000 0 0.1
  Total Units 1,000,000 $20 $20,000 1,000,000 0 1.0
Wonder Dust   Tons 1,000,000 $100 $100,000 1,000,000 400,000 0.6
Device A   Units 1,000,000 $20 $20,000 10,000,000 0 10.0
Device B   Units 1,000,000 $20 $20,000 1,000,000 0 1.0
TOTAL $160,000 13,000,000
81.3 L/($000)

The performance measurements for the Current Year for
the combined divisions appear below. The improvement
levels (1% to 3%) have been applied to each product line.
Actual water consumption is shown in the column labeled
‘Water, L” and the flexible budget values appear in the
adjacent column. Recall that the “flexible budget value
is the quantity of water that would have been consumed
if no change in efficiency occurred. The Index value is
simply the ratio of Actual Water Use to Flexible Budget
Water Use, multiplied by 100. The individual Index values
for the product lines reflect the 3%, 2% and 1% improve-
ments, respectfully, that these product lines achieved for
the Current Year.

CURRENT YEAR
Flexible Bud-
Product Step Output Units Output Price $/Unit Rev ($000) Water, L Index (100)
get, L
Widgets 1 Units 0       0  
  2 Units 1,000,000     291,000 300,000  
  3 Units 1,000,000     97,000 100,000  
  Total Units 1,000,000 $20 $20,000 388,000 400,000 97.0
Wonder Dust   Tons 1,250,000 $100 $125,000 1,127,000 1,150,000 98.0
Device A   Units 800,000 $20 $16,000 7,920,000 8,000,000 99.0
Device B   Units 1,200,000 $20 $24,000 1,188,000 1,200,000 99.0
TOTAL $185,000 11,011,000 11,150,000 98.8
59.5 L/($000)

The Average Intensity for the Current Year is calculated as The Overall Flexible Budget Index value is determined to
59.5 L per $1000 in revenue. This is a 27% improvement be 98.8 (vs. a Base-Year value of 100), reflecting a 1.2%
compared to the Base Year; nearly all of the improvement improvement. This is the actual improvement in water use
results from the distortions discussed in Examples 1 to 3. efficiency as compared to the 27%.

112 Journal of Applied Corporate Finance • Volume 29 Number 2 Spring 2017

ity is added up and compared to the “flexible budget” (FB)
quantity of water. The FB quantity is calculated by applying
the base-year fixed amount and the base-year variable factors to
the current-year activity level. In effect, the FB is the quantity
of water that would be used in the current-year, assuming there
is no change in efficiency.
Example 4 demonstrates the power of the f lexible
budget method in measuring actual underlying efficiency.
For this example, we combine the previous examples: Acme
Company, XYZ Inc., and ABC Corporation are assumed
to be business divisions of a larger company. An initial
problem is that average intensity cannot be calculated when
product lines have different units of measure, e.g., widgets,
tons, and devices. A widely used solution to this problem
is to define a common denominator such as the dollars of
revenue received for each product. To illustrate this approach,
we simply assume that devices and widgets sell for $20 each
while Wonder Dust sells for $100 per ton.
In our previous examples we assumed no change
in efficiency. To make the illustration more interesting,
Example 4 assumes that each division actually achieves a
small improvement in water use efficiency. Acme Division
improved its water use efficiency by 3% from its base-year,
XYZ Division improved by 2% and ABC Division improved
by 1%. Because all product lines improved by at least 1% but
no more than 3%, we know that overall corporate efficiency
improvement must fall within this range. Further, because the
production of Device A requires the largest use of water and
that activity achieved 1% improvement, our overall corporate
improvement is expected to be near the low end of the range,
slightly higher than 1%.
In fact, use of the flexible budget method determines
that the corporation’s overall improvement in efficiency was
1.2%. Average intensity, however, shows a 27% improvement,
clearly a gross overstatement of the change in efficiency.
Example 4 illustrates how average intensity is a poor
proxy for efficiency while the flexible budget method provides
an accurate measure of a corporation’s sustainability perfor-
mance. Senior managers who rely on average intensity as a
proxy for efficiency can be misled about their organization’s
overall performance. In contrast, the flexible budget method
provides management with an accurate measure of the corpo-
ration’s overall change in efficiency.
5. Bacardi Corporate Responsibility Report 2014, p.54. https://www.bacardilimited.
com/wp-content/uploads/2016/07/2014_CR_Report.pdf
6. For example the GHG Protocol provides extensive discussion and guidance for
multiyear comparisons of sustainability measurements. The GHG Protocol explicitly calls
for recalculation of base-year absolute quantities to reflect structural changes that have
occurred including acquisitions, dispositions, out-sourcing, and in-sourcing. The GHG
Protocol does recognize that when the normalizing activity variable (denominator of the
intensity ratio) is dollars of revenue, there is potential for distortion of intensity improve-
Journal of Applied Corporate Finance • Volume 29 Number 2 Spring 2017
Further, the method allows managers to easily analyze
the performance of the individual businesses and activi-
ties that contributed to overall corporate performance.
As a result, managers can be evaluated on the changes in
operational efficiency they actually control rather than the
arbitrary distorting effects that influence average intensity.
By focusing on actual drivers of efficiency and holding
managers accountable for controllable sustainability factors,
the flexible budget method increases the likelihood that
companies will achieve efficiency improvements. Without
the flexible budget method, companies are effectively “flying
blind” in their sustainability improvement programs.
Bacardi Limited, a world-class company, has demon-
strated the viability of the flexible budget method since 2011.
Bacardi Limited’s 2014 Corporate Responsibility Report
states:
“Bacardi measures performance in two ways: absolute totals
and efficiency metrics… By measuring efficiency in this way for
each activity across our global operations, we more accurately
reflect our actual performance. This prevents arbitrary distortions
of our Company-wide efficiency that can result from changes in
our product mix, sourcing location or merger-and-acquisition
activities.” 5
More detailed information for applying the method in
sustainability reporting can be found in the references.
Conclusion
With an increasing number of companies reporting sustain-
ability results and numerous organizations establishing
sustainability reporting guidelines, the time is right for both
preparers and standard setters to pause and reflect on the
accuracy and usefulness of the information being presented.
The application of the flexible budgeting methodology
described in this article will benefit both users of sustainabil-
ity data and managers who use the information for internal
decision making. The measure of efficiency that results from
this approach offers an opportunity to improve the guidelines
established by global organizations for transparency of orga-
nizational sustainability activities.6 And, the creditability of
sustainability reporting depends on it.
ment measurements because of changes in product prices and product mix. The GHG
Protocol states that a restatement is necessary in this circumstance, but no guidance is
provided as to how to determine the restatement. To date, the fact that changes in prod-
uct mix can cause material distortion in measures of efficiency improvement irrespective
of the normalizing variable has not been recognized in any of the formal sustainability
measurement guidelines.
113
Jon Bartley, Ph.D., is Professor Emeritus of Accounting and former
Dean of the Poole College of Management, North Carolina State Univer-
sity in Raleigh, NC. You can reach Jon at jon_bartley@ncsu.edu
Y.S. Al Chen, Ph.D., CPA, CITP, CGMA, CMA, CFM, is Professor of
Accounting at the Poole College of Management, North Carolina State
University in Raleigh, NC. You can reach Al at alchen@ncsu.edu
Stephen K. Harvey, M.S., M.B.A., P.E., is former Global Director
of Environment, Health and Safety for Bacardi Limited and is currently
Industry Fellow in Corporate Responsibility at the Poole College of
Management, North Carolina State University. You can reach Steve at
skh1454@gmail.com
References
Jon Bartley, Frank Buckless, Y.S. Al Chen, Stephen K.
Harvey, D. Scott Showalter, and Gilroy Zuckerman, “Flexible
Budgeting Meets Sustainability at Bacardi Limited,” Strate-
gic Finance, December 2012, pp. 29-34.
Jon Bartley, Frank Buckless, Y.S. Al Chen, Stephen K.
Harvey, D. Scott Showalter, and Gilroy Zuckerman, “How
Widely Used Sustainability Metrics Distort Actual Perfor-
mance—And a Solution to This All-Too-Common Problem”,
Environmental Quality Management Journal, Summer 2015,
pp. 1-9.
Jon Bartley, Frank Buckless, Y.S. Al Chen, D. Scott
Showalter, and Gilroy Zuckerman, “Flexible Budgeting
Applied to Sustainability Measurements,” IMA Research
Foundation C-Suite Report. NJ: Institute of Management
Accountants http://www.imanet.org/docs/default-source/
thought_leadership/risk-management-internal-controls/flexi-
ble_budgeting.pdf?sfvrsn=2, August 2015.
Jon Bartley, Y.S. Al Chen, Stephen K. Harvey, D. Scott
Showalter, and Gilroy Zuckerman, Using Flexible Budget-
ing to Improve Sustainability Measures, AICPA.org. http://
114 Journal of Applied Corporate Finance • Volume 29 Number 2 Spring 2017
D. Scott Showalter, CPA, CGMA, CGFM, is Professor of Practice
at the Poole College of Management, North Carolina State University in
Raleigh, NC. You can reach Scott at dsshowal@ncsu.edu
Levi Stewart, CPA, is Sector Analyst – Consumer Staples at Sustain-
ability Accounting Standards Board. You can reach Levi at levi.stewart@
sasb.org
Gilroy Zuckerman, Ph.D., is Associate Professor of Accounting
and former Associate Dean of Academic Affairs of the Poole College of
Management, North Carolina State University in Raleigh, NC. You can
reach Gil at zuckerma@ncsu.edu
www.aicpa.org/InterestAreas/BusinessIndustryAndGovernment/
Resources/Sustainability/Pages/ImproveSustainabilityMeasures.
aspx, January 26, 2017.
Jon Bartley, Y.S. Al Chen, Stephen K. Harvey, D.
Scott Showalter, and Gilroy Zuckerman, Using Flexible
Budgeting to Improve Sustainability Measures, Part II.
AICPA.org. https://www.aicpa.org/InterestAreas/BusinessIn-
dustryAndGovernment/Resources/Sustainability/Pages/
ImproveSustainabilityMeasures2.aspx, April 17, 2017.
Investors Want More From Sustainability Reporting,
Says Former SEC Head. Wall Street Journal, http://blogs.wsj.
com/cfo/2015/11/12/investors-want-more-from-sustainability-
reporting-says-former-sec-head/?mod=djemCFO_h , November
12, 2015.
The Greenhouse Gas Protocol: A Corporate Account-
ing and Reporting Standard (revised edition). Greenhouse
Gas Protocol & World Business Council for Sustainability
Development, 2014 http://www.ghgprotocol.org/standards/
corporate-standard, 2014.
ADVISORY BOARD EDITORIAL
Yakov Amihud Carl Ferenbach Donald Lessard Charles Smithson Editor-in-Chief
New York University High Meadows Foundation Massachusetts Institute of Rutter Associates Donald H. Chew, Jr.
Technology
Mary Barth Kenneth French Laura Starks Associate Editor
Stanford University Dartmouth College John McConnell University of Texas at Austin John L. McCormack
Purdue University
Amar Bhidé Martin Fridson Joel M. Stern Design and Production
Tufts University Lehmann, Livian, Fridson Robert Merton Stern Value Management Mary McBride
Advisors LLC Massachusetts Institute of
Michael Bradley Technology G. Bennett Stewart Assistant Editor
Duke University Stuart L. Gillan EVA Dimensions Michael E. Chew
University of Georgia Stewart Myers
Richard Brealey Massachusetts Institute of René Stulz
London Business School Richard Greco Technology The Ohio State University
Filangieri Capital Partners
Michael Brennan Robert Parrino Sheridan Titman
University of California, Trevor Harris University of Texas at Austin University of Texas at Austin
Los Angeles Columbia University
Richard Ruback Alex Triantis
Robert Bruner Glenn Hubbard Harvard Business School University of Maryland
University of Virginia Columbia University
G. William Schwert Laura D’Andrea Tyson
Charles Calomiris Michael Jensen University of Rochester University of California,
Columbia University Harvard University Berkeley
Alan Shapiro
Christopher Culp Steven Kaplan University of Southern Ross Watts
Johns Hopkins Institute for University of Chicago California Massachusetts Institute
Applied Economics of Technology
David Larcker Betty Simkins
Howard Davies Stanford University Oklahoma State University Jerold Zimmerman
Institut d’Études Politiques University of Rochester
de Paris Martin Leibowitz Clifford Smith, Jr.
Morgan Stanley University of Rochester
Robert Eccles
Harvard Business School

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