How does financial accounting differ from sustainability accounting?

Financial accounting primarily centers on the financial performance and position of an organization, focusing on quantifiable metrics such as revenue, expenses, assets, and liabilities. Sustainability accounting, on the other hand, extends beyond purely financial considerations. It incorporates environmental and social factors, allowing organizations to assess their impacts on the environment and society, alongside financial performance.

The inclusion of environmental impacts in sustainability accounting means that it not only measures traditional financial metrics but also evaluates aspects like carbon footprints, resource usage, and other ecological footprints. This broader scope enables stakeholders to understand how an organization's operations affect both its financial viability and the planet.

While other options pertain to various aspects of sustainability accounting, none encapsulate the comprehensive nature of how it relates to environmental impacts as effectively as the correct choice. Financial accounting does not traditionally include these environmental dimensions, making it distinct from sustainability accounting.