Corporate responsibility demands that firms address environmental and social values in their firms’ policy and key performance indicators. These are integrated through strategic planning and require firms to merge the long-term environmental and social values with short-term economic objectives and performance measures. Each firm’s strategy will differ. This paper provides a normative reporting concept to connect the financial implications associated with long-term planning for environmental and social values, with short-term accounting reports. Reporting variants adapted from total cost assessment, life cycle costing and variable costing are integrated to offer upstream information based on a product segment view.

Worldwide stakeholder influences are intensifying pressure for business firms and industry groups to demonstrate accountability and responsibility that demand assimilation of environmental values into business practices (Henderson, 1991), including a greater degree of ‘transparency’ in terms of disclosure of the extent of environmental and financial risk. International efforts towards increasing transparency and accountability are evidenced in ISO 14000 environmental management series, and the suggestion by Elkington (1999) of a Triple Bottom Line (TBL) reporting approach which is implicit in the Global Reporting Initiative Guidelines (GRI, 2002). A TBL reporting approach includes the provision to stakeholders of three separate reports or information sets—financial, social and environmental.

Suojanen (1954) formulated the enterprise theory that firms form part of the social community as an institution where decisions are made that influence parties other than shareholders. Management is responsible for the firm as a corporate citizen and the resources—monetary, natural and physical—are used as a result of its decisions. This also underpins the external reporting guidelines formulated by GRI in 2002.