Social & Environmental Accounting for "Consom’actors"

By guest blogger Delphine Gibassier, Toulouse Business School

Green consumer audits started out with two campaigning journals (the New Consumer and the Ethical Consumer) mentioned by Gray et al. (1996). At the time, there was a relative assessment of the performance of corporations made via publically available information. Clearly targeted at the general public, those ratings were the first visible “consumer shadow accounts”. Today, corporate information is more readily accessible, through sustainable reports and websites, and multiple media channels that investigate corporate practices. The new frontier of the consumer “lobby” movement is now targeted to products. Many government-led and privately-led initiatives have started to look beyond eco-labels to try and input environmental accounting directly on the products. Tesco, Casino, Leclerc, and the Sustainability Consortium are examples of privately led initiatives (A recent and smaller initiative is the one of the French company “Bureau Vallée” which rates their office consumer goods with A/B/C/D in their shops). Publically led initiatives include the French experiment “Affichage Environnemental” and the currently in process “PEF” at the European Union level (Product Environmental Footprint).

A new way of empowering consumers with shadow environmental and social accounts is now being processed via external consultancies and their in-house developed applications. A few months ago, I downloaded on my phone the application « Noteo » (application for products notation in France). As both a researcher and a mom of three, I got teased by this application and the easiness of looking at the social and environmental (and health) impacts of products I was intending to buy while shopping.

I have got to say, I never really used it while shopping, first because shopping was a run-run time, and also because we opted out of shopping in person when our third little man entered our life this Summer (Noteo does not work on “drive” websites ;-)). However, I did test out Noteo at home (easy) and also tested the application’s possibility to give in new products that aren’t in.

As a consumer (or “consom’actor” like we say in France), I like the easiness of use and the possibility to interact by acting myself as an enhancer of the application for others (by suggesting products to be added).

I also like the way you can choose what’s most important to you (for example health before the environment, or social..), and also how you can also look at alternatives that are better graded then the one that you are about to choose.

Maybe because my “researcher mind” got the most of me, I however quickly asked myself:

-       how the grades were given, and what was really behind them:

-       how could then so quickly invest in ten of thousands of products’ grading when companies like Tesco opted out of labelling their thousands of products, it took five years to Danone to go through only a few thousands and other companies like Akzo Nobel only talk about having looked at hundreds of products..

-       and why we couldn’t see more one or two “reasons” behind the grades (such as for health, there are 10 products considered dangerous, but only 2 names are given)… not good for transparency (of Noteo)

-       and why there are no more explanations behind the “dangerous” elements (can’t click, can’t see what’s the science behind etc…)

Noteo claims that products are evaluated against 400 criteria (the website says it took five years of work before opening the application with 45,000 products available) and that it uses “IT algorithms” to aggregate raw data, before comparing products between them. The methodology is explained on their website http://www.noteo.info/la-notation/une-methodologie-fiable/, and appeals to scientific wording and describes a very impressive process of scientific rigour to impress the users and generate trust. It makes me think of the “Green Rankings” of Newsweek… Is the grading more “objective” if giving the impression of being ultra complex? Of course, Noteo is also not exempt from criticism on its business model (where the money comes from… the association has a business cousin that gets money from using their data, for example, to “help” companies make better products).

Clearly, although I like the “quick & easy” nature of the solution, the transparency of the methodology and of results are not there… As a consumer I got quickly frustrated. As the Journalist Sophie Caillat suggests in her article in 2012[1], it is easy to try and look for the “perfect” product that does not exist…  or resist to change by “habit”.

I also heard recently about other apps in other countries to become an “aware” shopper such as EarthTouch and GoodGuide (with whom Noteo says it is in contact).

EarthTouch tells us on its website that the “The Universal Ecolabel® provides an accounting method (Earth Accounting®) for monitoring the finite planetary resources used by humanity in a manner not possible with the current financial accounting system.” The universal ecolabel is described on their website http://earthaccounting.com/ecolabel.html, also no information is given on how this methodology was designed, and where the numbers come from.

GoodGuide say they combine product and company level information to characterize a product's health, environmental and social impacts. They also describe their own methodology on http://www.goodguide.com/about/ratings and explain what composes the ratings.

Good Guide	Earth Touch	Noteo
250 000 products	Not available yet	60 000 products
Social, Health, Environment	Social, Human, Environment, Animal, Manufacture, Use, Post-Use	Social, Health, Environment, Economic
American	American	French
Founded at Berkeley	Founded by a doctor	Former CSR consultant
Looks at company information	Looks at existing eco-labels
Proposes alternatives	n/a	Proposes alternatives

As SEA tools and methodologies have the “power” to make some things visible and others invisible for corporations, what about social and environmental accountings for consumers? 

What about what is being told with those applications to the consumer? And back to the supply chain?

What about the “industrialisation” of product accounting? (see also Greenext, the Casino and Leclerc tentatives in France…)

What’s the link (or non-link) with environmental labelling experiments ongoing in France, EU and the work done at the Sustainability Consortium?

So what should we make of “social and environmental accountings” behind those gradings to “empower” shoppers to be come “smart” shoppers? Have you used them?

Are the ratings impaired by the same problem the early ones had in the 90s, that is, is corporate management still reluctant to acknowledge accountability and supply information to them on each and every product (Gray et al. 1996)?

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[1] http://rue89.nouvelobs.com/rue89-planete/2012/12/05/jai-teste-noteo-appli-responsable-qui-vous-conseille-au-supermarche-237521

Emerging Scholars Colloquium - A Response to Questions Posed by Participants

By guest blogger Professor Robin Roberts, University of Central Florida and Member of the CSEAR Executive Council

I thoroughly enjoyed participating in the CSEAR Emerging Scholars Colloquium and look forward to being there in 2015. Thanks to the organizers and other participants. It was a great event. I appreciate the questions that are being asked here and I did my best to answer them satisfactorily. Each question deserves a lot more space and a lot more discussion. Hopefully, we can continue the conversation here and also next time we see each other.  Here goes:

• In a field such as social and environmental accounting there must be periods where you feel deflated by the issues we write about. How do you avoid losing your passion?

I think passion is a necessary ingredient in my journey to lead a happy and productive life. I see this as especially true in my work as an SEA researcher. Sustaining a passionate engagement with my research is sometimes difficult because work and life in general pull me in many directions. Because research requires a lot of energy, it is tempting to just do what is necessary, to procrastinate, or just “phone it in”. Research also can be a very lonely exercise. For me, sustaining passion requires an engagement with other researchers who share my concerns and interests about the environment and social justice. We encourage and challenge each other to do our best work.

I can get overwhelmed by the bombardment of depressing news in the popular press, the struggles of others, or our poor stewardship of the natural environment. I like how Paul Hawken answers this question:

“When asked if I am pessimistic or optimistic about the future, my answer is always the same: If you look at the science about what is happening on earth and aren’t pessimistic, you don’t understand the data. But if you meet the people who are working to restore this earth and the lives of the poor, and you aren’t optimistic, you haven’t got a pulse. What I see everywhere in the world are ordinary people willing to confront despair, power, and incalculable odds in order to restore some semblance of grace, justice, and beauty to this world.”

• This is a stupid question, but in my whole academic career I've never heard anyone explain it. How does academia fit in society? Does it influence society, and, if so, how? It´s a question that could provide more meaning to the academic pursuit of knowledge.

This is not a stupid question; it is an extremely important question. People much smarter than me have written about this from many different philosophical and political perspectives. So, I will just provide a very brief and personal response. Yes, academia influences society. Its noble purpose is the pursuit of knowledge, especially knowledge that can help solve major problems, improve the lives of others, and therefore improve civil society. Through creating and disseminating knowledge we, as SEA scholars, hope to educate others in ways that improve how individuals, organizations, and institutions view and conduct their relationship with the natural environment and with others. When at its best, academia provides individuals with the tools they need to think freely and independently. As David Foster Wallace wrote in This is Water:

“…the real value of a real education…has nothing to do with grades or degrees and everything to do with simple awareness—awareness of what is so real and essential, so hidden in plain sight all around us that we have to keep reminding ourselves [of it]…the freedom of real education…the really important kind of freedom involves attention, awareness, and discipline, and effort, and being able truly to care about other people and to sacrifice for them, over and over, in myriad petty little unsexy ways, every day.”  

If academia provides members of society with a real education and real freedom, then society will be able to seriously confront the severe environmental and social challenges it faces.    

• What can be the contribution of research in promoting the correct use of social and environmental reporting instruments?

As an academic researcher, I am privileged to be able to conduct research that I view as important in better understanding the world we live in. As an SEA researcher, I focus much of my research efforts on trying to better understand why corporations and other organizations make voluntary disclosures of their social and environmental activities. The more we learn about SEA reporting, the more we are able to engage in debates over what should be reported. Our collective research efforts inform other researchers, activists, and policy makers of relevant theoretical and practical considerations when seeking to establish SEA reporting guidelines. We also can use research findings to advocate for more complete and transparent SEA reporting.  
 

• Is it too ambitious to think that accountants will play a central role in saving the world from environmental disaster?

I think it is good and healthy to dream big! An important aspect of SEA research is that it is, at its core, political. Rob Gray and others have said this many times. I think accountants play a relatively central role in all of modern society. We are much more than recorders and reporters of neutral, technical facts. As work by many critical accounting researchers have stressed, accounting plays an ideological role that legitimates corporate activities and many other actions that systematically threaten the health and safety of the environment and society. Accountants have the potential to help save the world from environmental disaster by refusing to privilege a narrow economic view of the role of accounting and by advocating for a more complete and transparent reporting of environmental and societal damage (caused by the unbridled pursuit of corporate profits).  
 

• How can you give your time as a PhD student?

At this point in your academic career, I think that the best way to give of your time is to focus intently on becoming the very best scholar you can be. You have an entire career ahead of you to give back to the SEA discipline and our related organizations such as CSEAR. First and foremost CSEAR is a research community. By becoming the best scholar you can be you will soon find yourself in a better position to make lasting contributions. This advice does not mean to imply that you should pursue this path too selfishly—right now you can volunteer to read colleagues’ papers, participate actively and intently in research workshops, strive to gain the confidence to challenge conventional wisdom, share your experiences and failures with others less senior than yourself, etc.

• How can we have publish work out of this colloquium as PhDs? 

The CSEAR emerging scholar colloquiums try to help new researchers learn more about SEA research, meet new colleagues, find help with their specific research program, and improve their chances to develop and complete a research project. The path toward publication for any specific research project depends on a variety of factors. I certainly hope the colloquium helps a paper along that path. I will add some advice that is critical and that new researchers seem to have trouble understanding. I think one of most important lessons for new researchers is for them to learn the importance of targeting their research to a specific audience. Don’t write your paper as if you are communicating a new idea to the whole world or even to the SEA research community. In developing your research project and in writing your paper, make sure you are very clear about your audience. Some of the rule-of-thumb advice is simple—when you decide the journal you are submitting your paper to for publication, you have decided what conversation you want to contribute to and you should be relying on work that has been published in that journal. Also, if you are not building fairly directly on prior theory and empirical work, then your project is not well-defined. Dean Neu calls this something like the “kitchen table” test. Your intended audience, that critical group of scholars who you are trying to engage in intellectual conversation, should be small enough to sit around your kitchen table. A colleague once suggested that I literally pretend that the authors are seated at the table with me, maybe physically placing their papers out in front of me while I write. If the scholars “sitting at the table” are not interested in the sentence I just wrote, because it is obvious or taken for granted or sloppy, then I should go ahead and delete it now and try again. This advice has done more for me than any other in helping me become a more disciplined writer. Chances that you will make a significant contribution to a particular area of SEA research will be much improved if you have a clear idea of the scholars you are trying to engage in conversation and discipline your writing towards that conversation.  

• Do you think it is necessary to defend social and environment accounting against mainstream accounting? Why or why not?

A group of SEA and critical accounting scholars, which includes me, tackled a similar question in a special forum that will be published in Critical Perspectives on Accounting. You may want to be on the lookout for that issue. Academic freedom gives us the privilege to undertake SEA research how we deem fit. We don’t need to defend our research choices beyond the critical group of scholars we are trying to engage in a public, published intellectual conversation. I don’t mean this as a naive answer though. There is politics in academic accounting just like there is politics everywhere. SEA scholars often want their ideas to reach the broadest possible audience and have their work widely read and cited. Also, there are career issues that are natural to consider—performance evaluations, promotions, tenure, and remuneration are usually tied to the perceived quality of one’s research. Elite mainstream accounting journals are often perceived as publishing the “highest quality” accounting research. As opposed to framing the question as defending SEA research against mainstream accounting, I would frame it as whether it is important for SEA research to engage with other streams of accounting research. The answer for you depends on the community of scholars you are trying to engage with and their willingness to engage.  Social and environmental accounting issues are extremely important areas of accounting practice. Instead of defending SEA research, I try to persuade non-SEA accounting researchers to recognize and accept its importance, and invite them to participate in the intellectual conversation.  

• As a PhD student without a funding grant, how can we avoid the lack of financing to endanger our passion?

This is a tough question. It is hard to maintain passion about your research program when you are struggling financially. PhD programs are chronically underfunded and PhD students are often also underappreciated. It is a shame because the vitality of our discipline depends on the production of new, passionate SEA scholars. I will make two personal comments. First, a lot of PhD students face these tough financial circumstances, but some much more seriously than others. That said, know that others have struggled through and hopefully draw strength from that knowledge. Being in a PhD program does not last forever, even if it feels like it will. Second, and I am just speaking from my own personal experience, my years as a struggling PhD student are now some of the most cherished years of my life. I know I was lucky because I had some fellow PhD students to face the financial dilemmas with me. I smile thinking about the creative ways we made ends meet, the ways we entertained ourselves without dipping into the rent money, and the lifelong friendships we formed because we took turns helping each other out.  Hopefully, you can find friends and ways to help cope with the financial hardship. Please know that your struggles and your commitment are truly acknowledged and appreciated. Also, let me buy the beer next time we meet—my thesis advisors did that for me and it was always appreciated.