Case study Managerial Accounting 

What is the role of accounting in the construction of a more sustainable world? Although not an easy question, this is precisely what instructor Matthäus Tekathen, and student partners Nour Khorassani, Kian Rahimidehban and Miumiu Wang were thinking about when they took on the task of redesigning one of the units of the COMM 305: Managerial Accounting class. 

The goal for this multidisciplinary team, which included an accounting professor, a PhD candidate in Engineering, and two undergraduate accounting students, was to design a unit that introduces students to different carbon tax regimes and corporate carbon accounting. This, they agreed, would strengthen the course goals, provide students with the opportunity to learn about a pressing issue, and emphasize the importance of sustainability in business decision-making. 

Rahimidehban, the PhD candidate, helped the team understand the physical calculations behind carbon emissions and reductions, while Tekathen and the other two student partners contributed to calculating their monetary value. The result of this great collaboration is a unit that fosters transformative learning, as it renders climate costs pertinent to business decisions throughout the curriculum. 

The class is designed to introduce business students to concepts, tools and applications used in all areas of business. It will now feature a unit dedicated to the study of carbon footprint and the role of managerial accounting in carbon management. 

To begin with, the team established three learning outcomes for the unit to guide the learning activities.

They wanted students to:

• Exit the class with the ability to articulate the significance of greenhouse gas (GHGs) emissions and corporate GHGs accounting 
• Elucidate the role of management accounting in GHGs management 
• Apply carbon management accounting to business decision-making. 

To achieve these goals, the team decided to integrate three main activities during the class: 

• An illustrative calculation of carbon footprint to cover the fundamentals 
• A debate on direct versus indirect emissions – aimed at encouraging students to engage in critical reflection and discussion 
• A case study to provide them with hands-on learning experience

Bringing together their diverse backgrounds, the group designed a case study exercise to encourage students to think about the interconnection between the environmental and economic spheres of sustainability, as a systemic understanding of sustainability is particularly needed to tackle issues like climate change. 

For this exercise, students are asked to prepare by reading the details of the case and other resources in advance. During class they are divided in groups, and each group is asked to solve different decision-making scenarios on their own. The first part of the exercises concludes with each group presenting their findings to the class. 

Then, the class moves on to a peer-to-peer learning opportunity, as the instructor and other students are asked to provide feedback. Once completed, each group is tasked with composing a one-paragraph letter addressed to the CEO of the company featured in the case study. This letter will propose a recommendation to the CEO on what course of action is advisable.