Monday, 13 September 2021

Social and Environmental Accounting Theory: A Limb, not a Lens

By Dr Dale Tweedie, Senior Lecturer, Macquarie Business School 

Winner of the 2021 Reg Mathews Memorial Prize for the paper considered to have made the most significant contribution towards the social and environmental accounting literature published in Social and Environmental Accountability Journal. The paper is FREE to download here.

Is theory a ‘lens’ on social and environmental accounting issues (SEA)? And does it matter whether or not we imagine theory this way? My recent article, in a special issue of the Social and Environmental Accountability Journal on the future of SEA research, addresses these questions (spoiler: I answer no and yes, respectively). I then propose an alternative: That we think of theories less like lenses and more like limbs, set within bodies of research tradition.

The main idea is this: While we can pick up and put down a lens at will, a limb is part of us. Viewed as lenses, theories appear as interchangeable perspectives on SEA problems to which we need have no special attachment. Conceived as limbs, by contrast, theories give shape and form to how we understand the world and to principles to which we are committed. If we view a limb’s purpose as to reach towards an object, the limb metaphor also foregrounds how to theorise is to act. For example, whether we interpret forests as assets or ecosystems is not only an epistemic question but affects how we treat these environments. In this respect, viewing theories as limbs holds scholars more accountable for the ways of knowing we propose.

My full argument has three stages:

1. What does the ‘lens metaphor mean? In SEA scholarship, lens metaphors present theories akin to coloured glasses, which show our subjects in different shades. This metaphor implies a certain post-positivist playfulness towards theory, in which we can cycle through multiple theories without ascribing truth or objectivity to any. Lens metaphors also tend to privilege certain types of research over others: Generating novel perspectives on SEA issues, for example, over interrogating which theories are right.  

2. What’s wrong with lens metaphors? Lens metaphors can be misleading in two senses. First, lens metaphors can misrepresent our subjects’ beliefs or our own. Consider an accountant who views her professional ethics as an objective moral standard. If we label her moral system an ethical lens, we mispresent her own (objective) understanding. Lens metaphors might also misinterpret our own beliefs. For example, if we genuinely believe natural systems have intrinsic value, imagining a ‘deep ecological lens’ filters – and thereby truncates – both our real ontology and ethics. Second, lens metaphors can (mis)lead our research time by privileging theoretical novelty over extending or applying those theories we hold are true. 

3. An alternative? Imaging theories as limbs suggests theories are less ways of seeing than ways of inhabiting the world. This perspective is consistent with how SEA scholars have long interpreted accounting: As a mode of knowing that inherently (re)shapes the world it (nominally) records, and so is never simply technical or neutral. For example, to describe a person’s performance in numbers is a deeply theoretical exercise that gives a person’s actions some properties (e.g. comparable and transferable) and takes others away (e.g. specificity and social context). Representing theories as limb matches our metaphors to these maxims.

Imaging theories as limbs also helps clarify what is at stake in contests between ideas. As limbs, conflicting theories are not simply different vantage points on the same reality but conflicting injunctions about how to interact with our social and natural worlds. If we accept organisations should serve society rather than shareholders, for instance, we cannot be benignly indifferent to perspectives – like legitimacy theories – that privilege financial interests. 

I extend the metaphor one step by imaging theoretical limbs within bodies of research tradition rather than as discrete entities. Gadamer famously wrote that we understand a text only when we know the question to which it is an answer. Traditions provide the questions that theoretical texts answer, and thereby offer a fuller sense of theories’ meanings and possibilities. Understanding theories in traditions also reminds us that learning theory is not only memorising axioms or tools, but immersing ourselves in an historical conversation such that we intuitively grasp both the import and logic of the principles we apply. 

We can think of SEA research as itself a tradition. So conceived, SEA research is not simply a set of technical skills but a distinctive approach to accounting praxis. As such, the task of SEA scholarship is not only to cultivate novel perspectives on contemporary problems, but to assert ways of knowing we have learned collectively, and which our teaching and research preserve. This last metaphor foregrounds how to (re)produce knowledge is also to remember what has gone before. In my article’s closing words: 

As our politics sleepwalks our natural environment towards catastrophe, and as our economics bends once more towards inequality and injustice, one critical role for our tradition of SEA research is to remind each other, and the wider community, of what we already know.


Wednesday, 8 September 2021

Global survey aims to map sustainability and climate change across accounting and finance education

By Dr Shona Russell, CSEAR Co-director

Do you teach about carbon disclosures, or ESG? Does sustainability feature in your teaching? What have you experienced when teaching these topics? What insight and support could you offer to those wishing to teach these subjects? 

 

Shona Russell, John Ferguson and Ian Thomson have launched an online survey aims understand academics’ experiences of teaching sustainability and climate change in accounting and finance degree programmes around the world. If you have experience of teaching these topics or would like to teach these topics, you can complete this 15-20 minute survey:

English version: 
https://standrews.eu.qualtrics.com/jfe/form/SV_5AXjhioKLf1A6hg

Version in either French, Spanish, Italian, Portuguese, Simple or Traditional Chinese: 
https://standrews.eu.qualtrics.com/jfe/form/SV_0jn2aeb2UWkqR8y

Complete the survey before 16th September to win one of five copies of Sustainability Accountability and Accounting by Matias Laine, Helen Tregidga and Jeffrey Unerman.
 
The survey is part of the Building Carbon Literacy project involving colleagues from the Centre for Social and Environmental Accounting Research is funded by the Royal Society of Edinburgh’s COP 26 International Climate Network Grant.
 
Motivated by a concern that public and private accounting and finance have been identified as central to achieving net-zero carbon ambitionsthe project aims to understand the education, knowledge, skills and capabilities of professionals tasked with understanding, evaluating and investing in climate solutions. 

Findings will be publicised in October 2021 before the Conference of the Parties 26 in order to:
  • Enhance understanding of climate change and/or sustainability in accounting and finance education and academics’ experiences of teaching these topics
  • Work with stakeholders to develop transformative curricula to ensure that current and future professionals are equipped to achieve net-zero ambitions. 
 
Please contact Shona Russell (sr65@st-andrews.ac.uk) to learn more about this project. 




Monday, 1 March 2021

The missing piece from Mark Carney's Reith lecture on value


By Jeremy Nicholls, CSEAR member and director & co-founder of Social Value International

In this blog, social value expert (and optimist) Jeremy Nicholls responds to the recent Reith lectures delivered by former Bank of England Governor Mark Carney – and asks how eminent economists can explore new notions of ‘value’ while apparently ignoring the fundamental role of accounting.

It has increasingly dawned on those responsible for managing the global economy that the scale of the challenges of climate change and rising inequality is going to need some fundamental changes.  What sort of fundamental change depends on your goal, but you can take your pick from responsible capitalism, inclusive capitalism, or social welfare capitalism. It depends on what we value.

In the most recent Reith Lectures entitled ‘How We Get What We Value’, Mark Carney, one of the world’s top economists and until recently the Governor of the Bank of England, explored the question of value starting with the breakdown of the link between morals and markets, considering the challenges we now face and then proposing solutions to the climate crisis. He asked why many of the resources on which our businesses depend are not in a ledger and gave the example of the Amazon rainforest only appearing when it has become a cattle farm. He recognised that price was not always a good measure of value. The extent to which people still talk about high value jobs for highly paid people, when Covid-19 has shown us that it is the relatively low paid jobs that are high value, shows though the extent to which worth and price have become substitutes. Carney argues that markets have run away with themselves and that the most common solution to market failure of more markets and less regulation only exacerbates our problems caused by our very human behaviours. Humans are notably guilty of short termism, over-reliance on what we have done before, and on the assumption that things we know about are more common than they are. Add self-interest and the challenge of the commons to the mix and it is no surprise we’re in this mess.

Most importantly, Mark Carney recognises that society’s goal is to increase wellbeing, which is bang on the message with the British Standard on Enhancing Social Value that was also released just before Christmas. And although inequality isn’t one of his big challenges, Covid is, and Oxfam’s recent report on the Inequality Virus focuses on how Covid is increasing inequality. And he knows we need a way to ensure that society’s values drive the creation of value. All good.

A social construct

But extraordinarily for a banker, Carney makes no mention of financial accounting as either part of the problem or part of the solution. And yet there would be no banking without accounting, no economics without accounting, no investment driving growth of any kind, carbon neutral or not, without accounting. It is as if accounting is already neutral and can be ignored. But how can it be neutral? It is a social construct, constructed in a particular time and place. 

Over the last 200 years our economic system has generated massive increases in living standards, driven by using the planet’s limited resources and by our ability to invest against future returns. Unfortunately, this system has not effectively priced the use of the resources on which we are all dependent, nor has it effectively priced for the needs of future generations. It has blithely assumed that growth means there will be more for those generations, and largely ignored both population growth and how benefits and disbenefits from growth are distributed. Where dependencies are recognised, they still tend to focus on environmental issues and on natural capital and do not sufficiently recognise our dependency on poorly paid, insecure jobs, in care and deep in supply chains. Supply chains where few or no trade unions leave people protected only by national legislation in countries desperate to create employment and by voluntary company supplier audit processes. Let alone our dependency on what is bizarrely called modern slavery, as if it is somehow more shiny and up-to-date than that old fashioned slavery.   

It is, though, difficult to conceive of the scale of investment that has been made possible by the ability to invest against future returns. The numbers are in the trillions and simply too big to grasp.

Historically, charging interest for lending money has been frowned upon by most of the world’s religions, until the Pope needed to finance the Crusades and trade off the sin of paying interest against time spent in purgatory. But this was just the first step. Getting to scale needed more than a change in culture, it needed new vehicles to manage and share risk; first the joint stock company and then today’s dominant legal vehicle, the limited liability company. But to really ramp up investment, we needed secondary markets so we could invest in companies where we would never know the managers, and we needed an approach to measuring the value the company was creating and calculating our share.

And so, we already have a dominant, standardised approach to accounting for value. It underpins our economic system and contributes to investment decisions – financial accounting.

For most of us, accounting is the very boring but intrinsically simple approach to counting money. It measures how much money a company has, which determines my dividends, and informs its potential to generate more money, which influences the value of my investment in that company. So boring that all the solutions we have been offered to this global crisis have ignored it. It's neither part of the problem nor part of the solution. Of course, investors bring in other information in making their assessments of the value of the enterprise, in assessing the value of future cash flows, but financial accounting is the standardised starting point.

Accounting has been around for thousands of years but its current form kicks off with universities in the 12th century (and the enthusiasm for measurement and personal accountability) and is picked up by the nascent banking system before becoming the international standardised approach we all directly or indirectly use today. There is not one single international approach, but the differences are like the differences between sheep to a shepherd, so we can focus on the main international standard that is managed by the IFRS, a privately organised, not-for-profit organisation established to serve the public interest. The IFRS is in turn overseen by a monitoring committee made up of capital markets authorities responsible for setting the form and content of financial reporting. Its mission is "to develop standards that bring transparency, accountability and efficiency to financial markets around the world. Our work serves the public interest by fostering trust, growth and long-term financial stability in the global economy".

In the IFRS Due Process Handbook there is a more specific reference: "The confidence of all users of financial statements in the transparency and integrity of those statements is critically important for the effective functioning of capital markets, efficient capital allocation, global financial stability and sound economic growth."

‘Sound economic growth’ is not defined but either way this begs the question – why do we need these things? Mark Carney would perhaps now say to increase global wellbeing and if so I would agree. If it were to concentrate wealth in the hands of a few it could perhaps claim success but if it is global wellbeing, then it has not been so successful. GDP just does not hack it as a measure of global wellbeing for many reasons but, to pick one, because it fails to allow for distribution. While there has been an increase in the global middle class, standardise for population growth and there are broadly the same number of people who are extremely poor (currently the 800 million people living on less than US$1.9 per day) as when Mark Carney’s most referenced economist, Adam Smith, was writing The Wealth of Nations. The main difference is that we also now have around 3 billion on between $1.9 and $10 dollars a day, many of whom work in those supply chains on which our lifestyles depend.

So the first part of the solution to our global challenges must be for the IFRS to redefine its mission in terms of human wellbeing and then consider whether its standards fit the new bill.

Currently those standards aim to provide the maximum number of future and potential primary users (that is investors, lenders and suppliers) with information to make decisions to provide resources to an entity (the language used for a business) and for this they need information on the economic resources that the entity controls and on managers’ stewardship of those resources in order to assess the ability of the company to generate net cash inflows (which will drive those dividends and stock market valuations). In other words, it’s about individuals investing to make personal financial returns.

Rich, white men

There are a few problems with this.

The purpose is for users that have no interest in what happens to other people because of those investments and it does not fully consider the safety of investors who are making short-term decisions. There is a word to describe a person with no empathy who does not think about their own safety and does not have the ability to make long-term plans. A sociopath.

We must back up a bit and think about the history of accounting to work out why this has happened. In those early days, from beginnings of banking in Italy in the 13th century to the rise of the limited liability company in the UK in the 19th century, nearly all those people making these decisions were (and probably still are) men and specifically rich men. And in the early stages many of those men were investing in trade and shipping, in activities that drove and underpinned European colonialism. It was the approach that allowed people to report profits from (old-fashioned) slavery. And so accounting was designed by and for, rich white men and until we can bring a class, race and gender lens to accounting standards, accounting is going to continue to drive inequality and climate change far faster than any of the other proposals that Mark Carney, and others, are making will offset them. It is not as if everything is standing still while we sort a few problems out. We are running (though with the general appearance of stability) towards a cliff edge.

Although IFRS aims to meet the information needs of a maximum number of current and potential investors, it turns out it was designed to meet the information needs of a maximum number of rich white men and to indirectly reinforce the imbalance of power between men and women and between ownership of economic resources still rooted in the historical exploitation of other people and their resources.

This is not what Adam Smith would have promoted. Mark Carney refers to his excellent other book, The Theory of Moral Sentiments, where Smith said: "However selfish man may be supposed, there are evidently some principles in his nature, which interest him in the fortune of others, and render their happiness necessary to him, though he derives nothing from it except the pleasure of seeing it."

That history means that accounting is specifically not interested in this. The consequences of a business’s activity – for example, its contribution to climate change as experienced by others – are not in scope, whether positive or negative. Accounting standards have no empathy, no guilt and no remorse if others are harmed or mistreated. Unless of course these consequences may affect the assessment of ability to generate cashflows. And even then, only selectively, based on assets under the entity’s control and on liabilities from past events, where these assets and liabilities can be measured in terms of money.

There is plenty of research that investors – and I do not mean those who manage investments on our behalf directly or, like pension funds, hold them in trust, I mean you and I, the underlying owners of those investments – are interested in consequences and do not want financial returns alongside negative impacts. Social Value UK carried out research with YouGov that suggested that 85% people wanted an accounting system that was not limited to financial returns. An accounting system with wellbeing at its core would continue to account for financial returns alongside other ‘returns’ that increase wellbeing. But it would also recognise that ever-increasing income doesn’t mean ever increasing wellbeing, while societies with low inequality have higher well-being than those with a similar GDP but a higher level of inequality.

It may not have been IFRS’s intention when they developed standards for existing and potential investors to see potential investors as anyone who is not investing now. Perhaps ‘potential’ referred to those that had the resources to invest. But the world has changed; not only should we consider potential investors irrespective of people’s current resources but in any case recognise that investment is no longer restricted to rich white men. Most of us directly or through pensions and forms of national insurance are already investors. I am willing to take a stab that this wider pool of investors, across class, gender and race, do not only want information about an enterprise’s ability to generate cash inflows for owners. I suspect they also want information on its ability to create positive impacts for others and not to reinforce and exacerbate the effects of decades of colonialism. And there is no reason why accounting standards could not do this.

Mark Carney realised that we need a measure of income and welfare that reflects societies' values but did not raise accounting as part of the solution. The request for more transparency and additional or supplementary information might help, but not if investors have no confidence that the information is complete or can understand how it has informed managements decisions. Focusing on climate is understandable but if decisions to reverse climate change are also increasing inequality, we are swapping one risk for another. We need to jump to an approach that includes the material impacts experienced by people because of a business’s activities. Existing accounting standards would need some development, perhaps a separate statement of impact alongside the balance sheet and the profit and loss, but valuing those impacts in the same units, money, and reducing an entity’s ability to pay dividends where there was a net negative impact, would ensure that the information was useful to those investors.

This is the change that is needed alongside all these other initiatives, one that directly and immediately makes enterprises that are not creating value for societies, to return to Mark Carney’s point, less interesting to investors and driving innovation through new enterprises that can create social and financial returns. IFRS acts for the public good and since governments are represented on the Monitoring Committee through their capital markets authorities, it should be possible, and it is also absolutely necessary, to align social values with the purpose of financial accounting.   

Editor's note: this blog was originally posted on 23/02/21 on PioneersPost, and is republished here with permission.

Tuesday, 16 June 2020

Crowdsourcing Corporate Transparency through Social Accounting: Conceptualising the ‘Spotlight Account’

By Dr Stephanie Perkiss, Dr Bonnie Dean & Dr Belinda Gibbons, University of Wollongong, Australia 

Winners of the 2019 Reg Mathews Memorial Prize for the paper considered to have made the most significant contribution towards the social and environmental accounting literature published in Social and Environmental Accountability Journal. The paper is FREE to download here.

Image L-R: Stephanie Perkiss, Theresa Heithaus
(Program Manager, WikiRate), Belinda Gibbons, Bonnie Dean.
Organisations play a key role in addressing global economic, social and environmental challenges. Increasingly we are seeing organisations selecting to integrate sustainability activities into their Corporate Social Responsibility (CSR) efforts. Yet, these CSR reports are indispensably limited, privileging self-serving discourses. 

External accounts, such as alternative and counter accounts, offer opportunities to increase transparency and accountability in the areas of sustainable development. While external accounts challenge organisations’ social accounting, there remains a need to develop this further and investigate new models of social accounting that engage multiple viewpoints and stakeholders. With the evolution and public adoption of technology into our everyday lives, there is great potential for crowdsourced applications to enhance organisational accountability. 

This paper explores the role of accounting in the context of social and environmental change agendas and introduces a new framework for social accounting, the ‘Spotlight Account’. What is significant about the Spotlight Account is the use of the crowd and technology as a way of creating new visibilities and channels for participation. Unlike shadow or silent external accounts, the Spotlight Account seeks to illuminate and transform global organisational transparency and disclosure practices by centrally locating and recording comparable, aggregated and independently sought organisational information. 

The paper conceptualises the Spotlight Account through the exploration of a new technological platform, WikiRate. WikiRate is a collective awareness platform for sustainability that organises corporate narratives, disclosures and accountings relating to the United Nation’s Sustainable Development Goals (SDGs) and other frameworks such as the GRI, into a peer-produced, crowdsourced database. While crowdsourced platforms are not new - think about websites such as TripAdvisor - WikiRate is unique to the CSR field as a free platform that engages stakeholders through information sharing. 

Image: sample of a 'metric' on Wikirate


This conceptual paper highlights a new social accounting framework, empowering anyone to assume the role as a social accountant through participation in the platform and leveraging technology to facilitate transparent and comparative organisational data. In naming this new account, we wanted our readers to think about a spotlight – how it gives centre stage to a space, a number, a metric – each light coming from a member of the crowd to brighten sustainability information for decision-making or, to brighten a lack of corporate sustainability information that may drive better disclosure. 

Spotlight Accounting has the potential to address (some) issues of contemporary CSR practice as it focuses on the process through which accountability information is created. It represents an accounting theory or practice (process, method) and an effective form of social change. We conclude that the exploration of new social accountings can bring about emancipatory change. It opens up the possibilities for social accounting to achieve greater accountability and communication between companies and their stakeholders. We invite accounting scholars to consider the implications of Spotlight Accounting, and consider how advances in technology and increased participation from stakeholders can drive organisational SDGs. 

You can check out WikiRate at: wikirate.org or contact the WikiRate team via info@wikirate.org to discuss setting up your own WikiRate higher education program. 

Editor’s note: As part of the award, Stephanie Perkiss, Bonnie Dean & Belinda Gibbons’ original paper published in Social and Environmental Accountability Journal is available FREE to download via the publishers' website, via this link.

Monday, 3 February 2020

Another call for papers on sustainability in accounting? Please let's help us stop it!

By Diane-Laure Arjaliès, Michelle Rodrigue, and Andrea Romi

Reflections on the call for papers “Accounting for the circular economy” in Accounting Forum

Let’s be clear. Guest editing a special issue is an unspeakable source of pleasure: collaborating with colleagues, helping authors find their voice, consolidating a research project, contemplating the product of our dreams taking shape as days and nights and review letters unfold… and writing an editorial with no worry about whether the latter will be accepted or not feels nice, fun and – let’s admit it – ego flattering. Although we do love the research community and contributing to the latter, one must also admit that we might well spend our time doing something else, like hiking, renovating houses or taking care of our kids. Academics are also human beings, after all.

So, let’s be clear again. If we proposed this call for papers on “Accounting for the Circular Economy” to Accounting Forum, it is because we felt that we desperately needed it. Yes, the research on the circular economy is not new, albeit it might have been approached under a different label (see Milne and Gray, 2013). Yes, Schumacher (1973) is right in his assessment that knowledge and understanding are gradual processes of great subtlety. And yes, there have been other calls in the past on sustainability and accounting that look similar. But still, we have not solved humxnkinds’[1] most significant problems – such as the imminent collapse of ecosystems all over the world, the drama of the microplastic polluting our oceans or the rise of global inequalities, among many others.

How can a call for papers on the circular economy for accounting help? First, because even if in a matter of six decades we have achieved little, it does not mean we should stop trying to influence and stimulate change. Hope is life, and one should fight till the end, if not for us, at least for the next generations. After all, many of us do our best to be compassionate individuals. Second, because there is actually relatively little research on the circular economy in the field of accounting specifically – yet this is maybe a place where accountants could play a key role and where (for once) research could trigger real change. Last, because a special issue can provide a space for scholars to engage in an open dialogue, and hopefully act toward the betterment of all.

In the rest of this blog, we will elaborate on each of these points. We will also bring some evidence on the state of the planet – in case there are still some readers who believe that we are participating in a giant conspiracy attempt – and explain why we should keep fighting and hoping. But as we are also aware that some might need to rush to the classroom, let us summarize what we are looking for in this special issue:
  • Papers that deal with accounting for the circular economy – in a broad sense of the term, on any aspect of it, from any research tradition, with any methodology, and any geography.
  • Interdisciplinary lenses, (critical) essays, reviews, fictions: those lonely children will be appreciated as much as their big siblings.
  • Big names, not such big names, big schools, small schools, doctoral students, stressed tenure-track, relaxed emeritus: everybody is welcome. We strive for inclusion; what matters is the quality of the work.
We will host a workshop at the CSEAR NA Conference in July 2020, during which we will provide developmental reviews, but you are not obliged to attend in order to submit. Deadline is October 31st. Now that you know the practicalities, let’s dig into the research itself.

The United Nation Convention on Biological Diversity just released a report indicating the Earth’s animal population is facing unprecedented mass extinction rates during the next ten years due to the ongoing biodiversity crisis (Yeung, 2020). Biodiversity is fundamental to the survival of humxnity and while there have been environmental effort and attention to this issue over time, the problem is “projected to continue or worsen under business-as-usual scenarios.” The outlook for Earth and its inhabitants looks even more dire when we turn to scientists. A recent article in Science, titled “Pervasive human-driven decline of life on Earth points to the need for transformative change,” addresses the idea that scientists have been raising a red flag and calling for societal change, reducing our impact on nature, for decades, yet the natural environment continues to decline due mainly to the abundance of humxn consumption (Díaz et al., 2020). They too address that only an immediate transformation of the “global business-as-usual economies and operations will sustain nature as we know it, and us, into the future” (Díaz et al., 2020, p. eaax310).

So, here we are, writing about the same issues of those in the 1960s, warning humxns of their actions and the broken production processes, driven by capitalist economics and the marketization of mass production and consumption. And, in spite of all this research-based activity and evidence, a recent internal United States’ Department of Homeland Security document described five non-violent climate activist who cut through fencing and turned off valves on several pipelines carrying crude oil from Canada's tar sands to refineries as "extremists" (Federman, 2020). Sharing space in a category to date reserved for the likes of white supremacists and mass killers. So, what then is the answer? Business as usual? Continue to fight a significantly worsening issue with the same tactics and the same research? Haven’t we been taught since childhood that we can overcome such overwhelming tasks? Is this a David and Goliath moment? Can we be the tortoise and still beat the rapidly detrimental environmental hare? Are these stories just that, a method to keep the common humxn reliant on hope even in the direst situations, refocusing them from the key issues at hand, the real culprit – the system?   Or is it sufficient to merely gather in pubs and critically dismantle all attempts toward such positive change? We would argue this is not working given that the amount of degradational change to Earth over the last half-century is almost incommensurable.

Yet, in spite of growing criticisms about inevitable failures on the part of ever-consuming humxns, we refuse to give up. We instead choose to grasp at hope, even if small. There have been true success stories of humxnkind’s impact on the combination of extinction and preservation. In 1918, a supply ship ran aground on Lord Howe Island. While being fixed, rats on board the ship escaped onto the island (Gibbens, 2017). These rats proceeded to feed on a very large insect known as the Dryococelus australis, or more commonly as the Stick Insect or Tree Lobster, driving the insect into extinction (humxn interventive extinction we should add). In the 1960s, rock climbers thought they saw the insect, yet no one was willing to scale the dangerous area at night, when the nocturnal insect could be examined. In 2001, intellectual curiosity and the desire for knowledge changed, and scientists decided to step up to the challenge and took four of those insects from the island to Australia for preservation. In a successful effort, this insect emerged from extinction, but it took intervention and a new perspective for the scientists and a new way of life for the insect, a similar combination we would argue needed to save humxnkind at the moment.

This brings us back to Schumacher and his claim that one of the most fateful errors of his time, and now our time again, is the belief that 'the problem of production' has been solved. Maybe our research needs to focus on “construct[ing] a political system so perfect that human wickedness disappears and everybody behaves well, no matter how much wickedness there may be in [them]” (Schumacher, 1973, p. 4). Maybe we need to shift our focus from influencing corporations to influencing the economic and political systems which support consumption and the dissolution of our natural world. This will not be an accounting solution alone, but an integrated solution, aligned with our research call. Research on the circular economy is not narrowly subject to discussions of production in a corporate and capitalist system, but might also provide empirical suggestions for some of the immediate and extreme change needed in our political and economic systems.

Successful attempts at transitioning to a circular economy model requires a systemic shift in business approaches - one in which value is redefined in order to find worth in elements that were once neglected or discarded; one in which traditional ways of doing business are cast aside and in which networks and partnerships are pivotal (Paquin & Howard-Grenville, 2013).  While this shift has been discussed for some time now, in different disciplines and under different labels, the success of the transition remains ever evasive. This state of stagnation – Failure? - Utmost concern? - led us to develop this call for papers. Whether accounting for the circular economy it is old news to some or a new topic for others is beyond the point. What matters is to try yet again to stimulate change in our destructive economic system. Our call for papers aims to encourage scholars to (re)engage with the circular economy movement and reflect on the role of accounting in this process.

You can read more about our special issue here.

Díaz, S., Settele, J., Brondízio, E. S., Ngo, H. T., Agard, J., Arneth, A., Balvanera, P., Brauman, K. A., Butchart, S. H. M., Chan, K. M. A., Garibaldi, L. A., Ichii, K., Liu, J., Subramanian, S. M., Midgley, G. F., Miloslavich, P., Molnár, Z., Obura, D., Pfaff, A., Polasky, S., Purvis, A., Razzaque, J., Reyers, B.,  Chowdhury, R. R., Shin, Y-J, Visseren-Hamakers, I., Willis, K. J., and Zayas, C. N. 2020. Pervasive human-driven decline of life on Earth points to the need for transformative change. Science, (6471), eaax 3100.366. DOI: 10.1126/science.aax3100.

Federman, A. 2020. Revealed: US listed climate activist group as ‘extremists’ alongside mass killers. The Guardian, January 13, 2020. Accessible at: https://www.theguardian.com/environment/2020/jan/13/us-listed-climate-activist-group-extremists

Gibbens, S. 2017. Huge 'Tree Lobster' not extinct after all. National Geographic, October 9, 2017 Accessible at: https://www.nationalgeographic.com/news/2017/10/lord-howe-island-stick-insect-dna-spd/#close

Milne, M. J., & Gray, R. (2013). W(h)ither Ecology? The Triple Bottom Line, the Global Reporting Initiative, and Corporate Sustainability Reporting. Journal of Business Ethics, 118(1), 13-29.

Paquin, R. L., & Howard-Grenville, J. (2013). Blind Dates and Arranged Marriages: Longitudinal Processes of Network Orchestration. Organization Studies, 34(11), 1623–1653.

Schumacher, E. F. 1973. Small is beautiful: Economics as if people mattered. New York: Harper & Row.

Yeung, J. 2020. “We have 10 years to save Earth's biodiversity as mass extinction caused by humans takes hold, UN warns”. CNN.com, January 20, 2020. Accessible at: https://www.cnn.com/2020/01/14/world/un-biodiversity-draft-plan-intl-hnk-scli-scn/index.html

Editor's note: this blog article was originally published on the EAA-ARC blog on 24 January 2020, and is republished here with permission.

[1] We rely on the alternative spelling of human (i.e., humxn) as a gender-inclusive expression repudiating the traditions that define all individuals by a reference to a male norm.

Thursday, 23 January 2020

Developing Accountants for more Creative Futures

Alessandro Ghio (Monash University)
Thomas Kern (The Accountability Institute)
Nick McGuigan (Monash University | The Accountability Institute)

How can we foster a socially progressive accounting that is based on human-centered design? Can we radically and openly discard the ‘Accounting as Art or Science’ debate, and transition towards explicitly addressing accounting as a social construct? A social construct that we feel needs reorganising, reinterpreting, reworking and repackaging for a dramatically changing world.

We have been thinking about the future of the world, of human organising and of doing business. We have been thinking a lot about governance and accountability of a changing world. How best to facilitate the future learning of accounting? What accounting really means in such social contexts? We began to question current economic principles, systems and the assumptions underpinning them. Is up the only way? Is growth the only measure of success? How is accounting and its language entangled up in all this? These conversations led to the laying of an alternative path, reinvigorating accounting education, by adopting a more humanistic approach to accounting.

The course ‘Global Issues in Accounting’ was thus designed and created as a type of experiment exploring the intersections of accounting, art, society and futures, integrating within a cohesive ecological narrative.  This undergraduate course taught in the last year of studies at Monash University in Melbourne (Australia) envisions a space for students to explore their lived experience, contextualise this and create their own unique understanding of accounting. Educators and students work collaboratively and creatively to interrogate accounting frameworks, accountability and conscious leadership. Students do this across three different contexts, the individual, the profession, and society. This has enabled them to see more than accounting’s technical aspects, and to explore how accounting fits into the world around them.

We based our course design on the principles of Constructivist Developmental Pedagogy developed by Marcia Baxter-Magolda at the University of Ohio. This approach is based on three decades of empirical work investigating epistemological understanding of her students. Constructivist Developmental Pedagogy promotes an active involvement in the process of sensemaking and knowledge creation. Baxter-Magolda believes that the three elements necessary for effective learning are:
  1. A validation of students as knowers, acknowledging students have prior understandings and experience;
  2. Learning needs to be situated within the lived experience of students;
  3. Learning is seen as a mutual construction of meaning between students and educators.
So in actively thinking and designing our learning experiences for students the teaching team constantly hold these principles in mind and actively search for engaging ways in which to explore material in this way jointly with our students.

In this context, we draw on humanities and the natural sciences to provoke and induce student imagination and to continuously challenge the role of accounting in society.

We draw on permaculture[1] design principles to investigate a systems approach to accounting. Students have the opportunity to explore a permaculture garden, where they are introduced to the permaculture ethics and design principles. Students explore a natural ecosystem through a permaculture lens, and subsequently contrast this against the human design system of accounting and its business context. In doing so, they start to see how such design principles could inform the organising of business and new forms of governance.

Figure 1. Permaculture garden site visit and discussion

To further prepare students for a complex and changing professional environment, we use context-specific case-study design, where students explore the role of accounting within the Australian refugee crisis as a part of their in-semester assessment. Students analyse and evaluate the financial statements of BroadSpectrum (the organisation responsible for Australia’s offshore detention centres). Students then view ‘Chasing Asylum’, a documentary exposing Australia’s offshore detention policies. This is instrumental to reflect on what they have seen and compare this to their financial analysis. They then bring together their learning across both activities, with their exploration of theoretical accounting viewpoints discussed in seminars, to critically question whether - “current business is immoral?” This encourages our students to think widely about the context in which accounting operates, where students see heightened relevance in accounting assessments.

Further provocation towards ethical reasoning and social, environmental impacts, is achieved through the use of a creative design method of ‘futuring’. Developed and actively trialled by Johan Galtung in the context of peace development, this creative design approach draws heavily on constructivist principles to enact positive ways of solving complex problems. Being placed in the year 2039 our students are asked to reflect back on their relationship to accounting in 2019, students then brainstorm key structural and behavioural forces of change that are and will continue to affect society in the future. By choosing two of these forces of change they then create a quadrant which affords them the opportunity to populate four different accounting futures. These in turn are evaluated by students and presented amongst their peers. Students leave the room empowered and more prepared for an undetermined future:
“During the discussion, we formed constructive arguments that brought a different understanding to what Accounting is and will be in the future. I felt that we were encouraged to think out the box and provide our own opinions towards the task. Very rarely are we required to express our thoughts in a more mature manner. This unit has enabled me to think out of the box, a very important element.” 
Figure 2. Students collaborating to create unboxing videos

Finally, we make use of artistic ways of thinking and doing to develop an activity that asks students to discuss the idea of becoming a professional. To stimulate students’ imagination, we employ the use of unboxing videos, finding recent popularity on YouTube. Unboxing videos are advertisements of new products where individuals unbox new products they receive, or they are used by celebrities to sponsor products. Students are usually familiar with such videos and associate them with today’s consumerism. We ask students to create their own type of unboxing video that addresses the question ‘What role should accountants have in today’s society?’ We provide various material, e.g. play-doh, children’s toys, chalk, coloured paper to invite students to think about the accounting profession with objects not usually associated with accounting. In their one-minute video, students express their creativity. Examples of videos developed include future-oriented accountants that make use of new forms of technology, accountants problematising the integration of non-financial matters, and accountants as part of wider eco-systems. We watch the videos together so students can explore their peers’ views of the accountants’ role in society and stimulate follow-up debate and discussion. 

Figure 3. Futuring seminars, depicting student engagement and future mapping 

‘Global Issues in Accounting’ was awarded a 2019 Ideas worth Teaching Award by The Aspen Institute in New York. This award honours educators and universities which are redefining business education by providing learning experiences that equip managers of tomorrow with the context, skills and decision-making capabilities needed to lead in an increasingly complex business environment.

By creating transformative learning experiences that ask students to transform their own world, this course provides the space for students to grow as professionals, active members of society. Students actively position accounting within its broader social context, develop skills associated with holistic and integrated thinking, complex decision-making, creative brainstorming and sensemaking required to engage in a complex and rapidly changing profession and society.

[1] Permaculture, standing for permanent agriculture, was developed by Bill Mollison and David Holmgren in Australia during the 1970s. Permaculture is a human design system derived from indigenous community practices from around the world and comprises of 3 ethics and 12 design principles. These can in turn be used by humans to design self-sustaining ways of living.  


Monday, 11 November 2019

Frustration, schizophrenia and a touch of sneakiness: insights in the process of doing ethnographic research

By Michelle van Weeren, Université Paris Dauphine

Winner of the inaugural Best Paper Award at the 2019 CSEAR International Congress

This summer, I participated for the first time in the Emerging Scholar Colloquium and the International Congress on Social and Environmental Accounting Research hosted by the University of St. Andrews from the 25th to 29th of August. I was quite positively surprised as I discovered the approachability of the senior researchers, it was clear that this was an open community willing to help and encourage future members. I was even more surprised as it turned out that my co-author Clarence Bluntz and me had been awarded with a prize for the best paper of the conference for our article “It’s not about manipulating the results, it’s about refining the methodology”- creative friction in the production of sustainability ratings. I was actually just about to sneak away to my room in the Agnes Blackadder Hall to practice this paper’s presentation that I was supposed to hold for the next day as Michelle Rodrigue stopped me and summoned me back to the conference room, where the award ceremony was just going to start. I was flabbergasted to hear we had won (to be honest, I wasn’t really aware of the existence of this ceremony that was organized for the first time this year) and unable to say a word, but luckily for me, this was not required for my picture being taken (it would have been better to keep my eyes open, though). All this did not exactly lower my level of tension for the next day’s presentation, but I am of course very grateful and happy with CSEAR’s recognition of our work.

The paper was, in the words of inaugural Best Paper Award Committee member Matias Laine, “not the most polished paper”, but the result of an “innovative approach in an area that needs more research”. For this blogpost, I thought it might be interesting to write a few words about this innovative approach.

The article is the result of an ethnography I conducted in the young sustainability rating agency where I used to work as an analyst for a period of three years. Just like most of my colleagues, I started working there with the firm conviction that sustainability ratings could help to bring ethics to the financial sector, thus making it a powerful lever for conducting a positive change in the world. This idea was reflected in the features of the agency’s rating methodology, that was based on strong sustainability principles but at the same time relied on the analysts’ capacity to ask the right questions rather than on quantitative and standardized checklists. This qualitative approach to evaluation worked out fine within the borders of our organisation but was, as it turned out as the agency matured and confronted its products to the market, not quite understood by the companies we rated. The result was a non-linear standardisation process of the rating methodology, with the analysts struggling with the tension between an internal pressure to make sense of sustainability performance while sticking to a case-by-case and common sense-based form of judgment, and an external pressure to communicate their ratings on sustainability performance in a way that was acceptable for external parties. This process was full of paradoxical situations and moments of bricolage where analysts had to make arbitrations between these two types of pressure.

Of course, the above-described analysis did not occur to me as precisely as I now write it down while I was still working there. The starting point of the project was rather one of general wonder about what was going on. Fascinated with the struggles my colleagues and I were going through but also fairly frustrated with the concessions we had to make to comply with external expectations, I started to keep a diary about one and a half year after my hiring. As my colleagues and me were working in an open space with all doors and walls made of glass and my screen was facing the hall where everybody continuously passed to grab a coffee in the kitchen, I had to be very careful with the Google Doc I used. I also had to be careful with What’s App that was installed on my desktop and that I used to talk to my friend Clarence Bluntz, who was in the second year of his Ph.D. at the time and with whom I shared my observations.

As my notes piled up and thanks to discussions with Clarence, who came to the company twice to conduct interviews with my colleagues (this part of the data collection was thus fully uncovered), I was more and more able to see the events at the agency from a distance. At the same time, I still was one of the analysts and had to complete my ratings and attend meetings just like all of my colleagues. When something occurred at the company everyone was upset about (this happened quite frequently), I at first felt just as troubled as everyone else, but quite quickly I was also able to analyse the events from a greater distance, thanks to Clarence and to the observing approach I had taken and that had become natural. The result was a sort of schizophrenic state of being, switching back and forth from playing the role of a devoted employee to being a kind of undercover agent. This was not always easy and more than once I felt scared or guilty about my sneaky behaviour.

It is now more than a year ago since I left the company and started my Ph.D., which can be regarded as the continuation of this ethnographic work. Because I wondered whether the tensions my colleagues and I experienced are shared more widely in the field, I have been doing interviews with analysts and other actors from the French sector for responsible investment during the past year. Thanks to these discussions and to my readings, I now understand that the company I used to work actually was an exception in the field, sticking to a strongly ethically-driven approach to sustainability analysis in a sector where this type of analysis is more and more instrumentalised to better identify financially material risks and opportunities. This does not mean that tensions are not felt by analysts in other organizations, but generally, they do not get the same degree of autonomy from their managers to develop and refine their own methodologies, that are often highly formalized. In other words: if we wanted to attract mainstream investors, who are used to quantitative reports and data, we did not have any other choice than to adapt ourselves, and it is rather praiseworthy that our employer gave us the freedom to carry out this adaptation process as we wished, thus leaving room for our own interpretation of the compromise between ethics and efficiency.

The frustration that led to this inquiry at the start has thus made place for a more nuanced view on my period as a sustainability analyst. The schizophrenia has disappeared, as I am now a full-time academic. The guilt about the sneakiness that my covert participatory observation implied stayed, as I never disclosed my full intentions and the detail of the data collection process to my former employer (the project would not have been possible if I had). The odds are low that he will ever read this blogpost, but if one day he would, I can only hope that he will be able to appreciate the honesty of this confession.

Friday, 1 November 2019

Teaching Management Control for Sustainability

By Delphine Gibassier, Audencia Business School

Next Tuesday I will have my class on management controls for sustainability. Many colleagues, who normally teach environmental and social accounting classes tell me, they do not teach management control, because they would not know how to. As of today, no excuse, here is how I teach it!

The content of the course is as follows:

1/ I teach a definition of it (that you can find in Crutzen et al. 2017)


2/ I first use a classic classification of management control tools by Schaltegger et al. 2000 (Schaltegger, S. and Burritt, R., 2000, Contemporary Environmental Accounting. Issues, Concepts and Practice, Greenleaf, Sheffield.), that exists in French (Antheaume, 2013) and has been also used in Burritt et al. 2011 with carbon as an example.

3/ I introduce Simons' controls (1995) and the example of them being used by Arjaliès and Mundy (2013) in the French CAC 40 companies.

4/ I then introduce further the "integration" of sustainability through management control systems, with the paper by Gond et al. 2012

5/ Last but not least, I finish through the "package" view of Malmi and Brown 2008, used in Crutzen et al. 2017 and the Michelin case study (Baker et al. 2018).


(do not reuse without authorization, Gibassier, 2018)

6/ I introduce the notion of management controls beyond the company (you need to for sustainability) using the figure 1 in the paper "Environmental Management Accounting: The Missing Link to Sustainability?" (2018).

7/ I explain what are "controls for sustainability using the different tables of the same paper (Gibassier and Alcouffe, 2018)


This table is used in our SEAJ special issue intro and Baker et al. 2018. If you use it, cite it!

8/ I present a few tools such as "green capex" (you can use Vesty et al. 2015, or examples using Finance for the Futures Case study of SHE)

9/ Finally I introduce the notion of "sustainability management controller". You can use both Renaud (2014)'s paper (available in French & English) and our report on sustainability CFOs.

I have them read the Michelin Case Study (2018) and then we do an exercice (same as Michelin) to look for controls and put them in the "package" way, +reflect on their sustainability orientation. I am using in French the last L'Oréal report, but any (short) report will do.

You can use our case study on Danone which talks about many of those items available in French and English at the CCMP website.
(this class is part of my "societal impact class where I teach 15 hours, 3 hours on management controls, and the rest on natural capital, social capital and multi-capitals).

More resources here:



More papers here:

  • Bartolomeo, M., Bennett, M., Bouma, J.J., Heydkamp, P., James, P., and T.Wolters. 2000. “Environmental management accounting in Europe: current practice and future potential. “ European Accounting Review 9: 31–52.
  • Guenther, E., Endrikat, J., and T.W. Guenther. 2016. “Environmental management control systems: a conceptualization and a review of the empirical evidence.” Journal of Cleaner Production. 
  • Lisi, I.E., 2015. “Translating environmental motivations into performance: The role of environmental performance measurement systems.” Management Accounting Research 29: 27–44. 
  • Milne, M.J. 1996. “On sustainability ; the environment and management accounting.” Management Accounting Research 7: 135–161.
  • Norris, G., and B. O'Dwyer. 2004. “Motivating socially responsive decision making: the operation of management controls in a socially responsive organisation.” The British Accounting Review 36: 173–196.
  • Rodrigue, M., Magnan, M., and E. Boulianne. 2013. “Stakeholders’ influence on environmental strategy and performance indicators: A managerial perspective.” Management Accounting Research.
  • Schaltegger, S., and D.Zvezdov. 2015. “Gatekeepers of sustainability information: exploring the roles of accountants.” Journal of Accounting and Organizational Change 11: 333–361.
  • Songini, L., and A. Pistoni. 2012. “Accounting, auditing and control for sustainability.” Management Accounting Research 23: 202–204.


See SEAJ 2018 special issue on this, and the 2013 MAR special issue.
Look for papers in AAAJ and SAMPJ recently (from 2012 to now), and papers by Leanne Johnstone as well.
Check out the EMAN group books, and Stefan Schaltegger's work (as well as Roger Burritt's work).

Editor's note: this blog article was originally published on Delphine Gibassier's own blog in October 2019, and is republished here with permission.

Monday, 21 October 2019

6th Emerging Scholar Colloquium and the 31st International Congress on Social and Environmental Accounting Research, 2019: Insights and thoughts from an emerging scholar

By Miriam Corrado

From the 25th to 29th August, the University of St. Andrews hosted the 6th Emerging Scholar Colloquium and the 31st International Congress on Social and Environmental Accounting Research, joining together several emerging scholars, experienced researchers and professors from all around the world.

It was the first time I have participated in the Emerging Scholar Colloquium, and the desire to meet with the academics who, through their journal contributions, are at the basis of my academic training and knowledge, was very strong. Indeed, when I received the letter of acceptance for the Emerging Scholar Colloquium, I felt honoured but at the same time hesitant, to present and talk about my research in an international context such as CSEAR.

Thanks to the generous support from the sponsors (many thanks to Robin Roberts, Pegasus Professor and Al and Nancy Burnett Eminent Scholar Chair in The Kenneth G. Dixon School of Accounting at the University of Central Florida, USA, the Chartered Institute of Management Accountants and Charles Cho, Professor of Accounting and the Erivan K. Haub Chair in Business & Sustainability in the Schulich School of Business at York University, Canada), CSEAR has been able to offer bursaries to selected emerging scholars, providing us an opportunity to present our research projects to a cohort of distinguished international faculty and to be introduced into the social and environmental accounting research community.

As soon as I was welcomed at the Agnes Blackadder Hall on Sunday 25th August, I suddenly perceived the friendly and comfortable environment which the CSEAR community enjoy. That impression was confirmed the next morning when Lori Leigh Davis warmly welcomed all the emerging scholars in the Gateway Building, making us feel like we have always been part of that community. The colloquium proved to be useful and constructive, as well as the following days during the CSEAR UK Congress, especially for creating a lively and engaged forum for discussion and reflections on emerging issues in social and environmental accounting research.

I would like to thank the organising committee and the Faculty members (in particular Jesse Dillard, Ericka Costa, Matias Laine, Den Patten, Shona Russell, Ian Thomson, Giovanna Michelon and Carmen Correa) for the opportunity given to share our ideas, to learn through their constructive feedback and, in particular, to give suggestions for our academic career such as the guide for the publication process.

I would strongly recommend to all early researchers and PhD student, to catch the opportunity like the one offered by CSEAR for two main reasons: first, the comparison with other researchers and PhD students from all around the world, allow you to open up your mind, to know about different practice existing in academia and build a strong network; second, the discussion with the Faculty members allow to expand your own research insights thanks to the different backgrounds, research traditions and expertise of various theoretical and methodological approaches of each member.

Many thanks,
Miriam


Friday, 20 September 2019

Climate Emergency, Climate Action and Accounting Education?

By Ian Thomson, University of Birmingham Business School and CSEAR Executive Council Convenor

Today, the 20th September 2019, children in the UK and around the world are participating in mass demonstrations stressing the need for global action on climate change. Climate scientists warnings are more urgent,  nations are waking up to this climate emergency, some financial institutions are divesting of fossil fuel investments levels, some businesses are reducing their carbon footprint and a growing number of committed individuals are struggling to live low carbon lives. Despite an awareness of how to resolve this, where change is happening it appears too slow to make a difference.

Despite this crisis, many universities and business schools continue to teach accounting and finance, with its hidden carbon curriculum, as if they were climate change deniers. The need for carbon literate graduates has never been greater, yet with a few notable exceptions accounting and finance programmes across the world are largely ignoring this global challenge. Carbon accounting and finance needs to become the new normal for our students.

Of all the social and environment accounting topics this is perhaps the easiest to assimilate into professional practice and is broadly supported by professional accountancy bodies. Carbon intensity disclosures are part of UK corporate reporting and in many other countries. There are standards, protocols, taxes, techniques to measure carbon in ways that can be appropriated into organisational decision processes and reporting.

However, we must ask ourselves how competent are graduates from your programme in understanding drivers of climate change, deciding which carbon accounting method to use,  applying carbon accounting methods and making meaningful and impactful recommendations as to the lowest carbon course of action. Even though I have been teaching this topic for over 25 years I only reach a percentage of our students. These students are aware of the topic, but far from competent in doing carbon accounting.

So why it is it that in 2019, climate literacy and carbon accounting are not core parts of our degrees?

  • Why do we not teach our students to become carbon literate and provide them with the accounting skills to contribute to the meaningful application of carbon accounting to real world problems?
  • Why do we teaching management accounting students to resolve problems with labour or machine capacity constraints, but not with carbon constraints?
  • Why to do teach students about asset impairment standards, but not taking into account unburnable fossil fuels or stranded assets? 
  • Why do we not teach students to take into account carbon emissions as a material risk in audits? 
  • Why is possible exposure to future regulations on carbon, not a factor in corporate valuations or setting cost of capital? 

The list of whys could go on and on. Before you get too annoyed with me – I know many of you are doing wonderful things in this space, and members of the CSEAR community are at the frontiers of practices. But we need every graduate in every institution to have some level of capacity in climate literacy and effective carbon accounting.

This is a challenge CSEAR should take the lead on. I would like us to share our best practice, create learning resources that are translated into different languages. We also need greater accountability and transparency on how climate change is integrated into global accountancy education programmes.

This will not solve climate change on its own, but is a necessary first step, and at least may mitigate the worst consequences of the production of carbon illiterate accounting and finance graduates. This is not a trivial task, but we have the expertise, knowledge, ability and motivation to change what we teach in our programmes. Let us not be bystanders as the world burns.

Monday, 19 August 2019

Can Accountants Save the World? Incorporating Sustainability in Accounting Courses and Curricula

By Charles Cho and Hannele Mäkelä

The new academic year is about to start, turning our minds back into teaching. How tempting it would be to take the slides from the prior year(s) and do what we know best. However, recent changes in global governance and accounting standard setters’ agenda encourage (force?) us to step outside our comfort zone and think: “how can we incorporate sustainability into accounting courses and curricula?”

While many of us have successfully been doing this for years, and even more of us regularly experiment with novel ideas in their teaching, it is time that we, as a community, start carrying responsibility and take action towards a better – and more formal – alignment between accounting and sustainability. Pursuing sustainable development and mitigation of climate change require new understandings of corporate accountability and measuring corporate performance. How companies manage sustainability is crucial for their long-term success. It is no longer enough to measure organisational success by financial measures only. The role of accounting is acknowledged central in achieving sustainability, as strongly emphasized by high-profile speakers at the recent World Congress of Accountants – including former UN Secretary-General Ban Ki-Moon, His Royal Highness, the Prince of Wales and Mark Carney, Governor of the Bank of England.

For instance, recent developments for non-financial reporting require new understandings of social and environmental value, and how to account and measure for such value. Carbon accounting and disclosure, water accounting, and human capital accounting are just a few examples of the types of non-financial information that companies are now required to disclose. Consequently, and in parallel, business schools are globally and increasingly expected to commit to sustainability education. How can we as academics, researchers and teachers, equip future accounting professionals to better deal with the challenges (and possibilities?) associated with sustainability issues?

Both of us have recently attended workshops, panel discussions and other related events with valuable opportunities to learn and share thoughts around accounting and sustainability with experts from different backgrounds. One of us is part of a group of eight Canadian academics who (still) call for an “integration of sustainability into the CPA Canada curriculum” as follows:
It is our responsibility – as accounting educators and researchers – to contribute to the sustainable development of the profession. This academic commitment to accounting is also an engagement that will ensure the prosperity of future generations. We live in turbulent times where the natural resources of the planet are compromising economic growth, where fiduciary duty requires the inclusion of environmental, social and governance issues and where the ethics of economic actors has become essential to the conduct of business. The integration of sustainability into the CPA Canada curriculum is crucial to the building of a successful, inclusive and leading accounting profession that could pursue an ideal of good business.
We firmly believe that besides the new tools and accounting-related ideas and theories we teach at our business schools – and perhaps as a driver for change –  the accounting profession, via its professional orders, associations and/or societies (e.g., ACCA, AICPA, CA ANZ, CPA Canada, ICAEW), must lead and take action to make concrete changes by including sustainability as a core competency in their examinations and certification/licensing requirements. Unfortunately, we have only seen much discourse without much action so far—a ‘déjà vu’ (?).

Moving forward and “on the ground”, we need new methodologies and new ways of approaching accounting education. Many of the key ideas and concepts in accounting need to be thoroughly and fundamentally re-considered when applied to the sustainability arena. In this process, multidisciplinary thinking is the key. We need to build and educate students with strong core competencies in accounting, but it is equally important to critically analyse the role of accounting-related ideas, tools, and information in the bigger picture of the ecosystem we live in and its sustainable development. What are the critical accounting concepts, theories and tools that we need to master? What is the sustainability-related information that we need, how and from where do we get it? How and what do we conceive of value? What is the time-span to be considered? And so on.

In addition to a critical analysis of these pressing questions, we also need the ability to collaborate in multidisciplinary settings and with different actors in society. This should be reflected in how we teach at business schools. Businesses, governments, NGOs and all other societal actors could (should) be involved, and we could experiment with? new kinds of participatory methods. Then again, sustainability could be easily included even in introductory courses through case studies, for instance. As often mentioned, the question is not only about what you teach but how you teach; that is, teaching methods that foster critical analysis, collaborative skills and problem-solving should be in use throughout curriculum.

This blog aims to stimulate debate around how we should teach accounting to advance and improve sustainability. It constitutes a call for action from us – the community of accounting educators – to change our accounting courses and curricula to integrate sustainability issues, a response for the challenge posed for accountants to save the world.

Editor's note: this blog article was originally published on the EAA-ARC blog on 8 August 2019, and is republished here with permission.

Thursday, 31 January 2019

How The World Thinks

By Dr Jack Christian

How The World Thinks is the title of a recent (2018) book by Julian Baggini. It probably overstates what the book has to offer because whilst it is a good introduction to the major cultures of the Northern Hemisphere it has little to say about the indigenous cultures and religions of Africa, Australia and South America.  Nevertheless it is a valuable book offering insights into why other cultures might see things differently, something which is overlooked all too frequently in the Western world.

From a personal perspective it fleshed out my knowledge of Buddhist and Chinese thought, widened my knowledge of Hinduism and Islam and spoke to me of Shintoism for the first time in 50 years.  It made plain the interdependence of religion and philosophy in all these cultures and contrasted this (in my eyes) with the analytic atomism of the Western world which had led to their separation.  That however is not to say that religion and philosophy do not underwrite today’s culture in the Western world, they are just studied separately (again in my eyes).

The book is organized into four parts and a short conclusion.  In the first two parts Baggini discusses the epistemology and ontology of the Islamic world and the various cultures across Asia.  In part three he focusses on the nature of self as seen by these cultures.  (As a follower of deep ecology I found this section particularly fascinating.  Baggini speaks of no-self, relational self and atomised self; I believe it is in our understanding of self that causes us to identify with deep or shallow ecology).  Part four considers how the different cultures live, delving into their different ethical choices and positions.  The concluding section is only 19 pages long, I guess Baggini would prefer the reader to form his/her own conclusions.

Interesting lessons for me included the Japanese attitude to technology as an extension of Nature introduced on p140.  Humans are part of Nature, hence so it their technology.  This interplay of human ingenuity and Nature is discussed at some length and it left me wondering if it left any room at all for Nature to express herself, or whether she was just seen as some sort of poor relative who should welcome the changes being thrust on her.  I need to find out more about this.

Another lesson from a Japanese setting on p298 is the understanding that life is transient and thinking about (focusing on) the now is just as important as making rational (logical) deductions that will affect the future or analyse the past.  This underwrites an understanding that feelings are as important as rational thought and allows us to bypass Hume’s is/ought logical fallacy.  Thus we can take something we observe and allow it to influence how we act (naturalism).

This Western subordination of feeling to logic goes a long way to explaining something Baggini discusses earlier on p79, science for science sake.  Only in the west is science and intellectual development valued for its own sake, elsewhere it exists to serve human flourishing.

It might also explain the search for impartial ethical rules or guidelines such as Kant’s imperative or Bentham’s utilitarianism in the West.  This compares with the focus on virtue that can be found in most of the rest of the world.  Chapters 25 and 21 respectively discuss and exemplify these points in detail.

I suspect this critique of science, and logic and language would chime with many post-modern philosophers although I am not sure where they would stand on human flourishing.

Another lesson, this time from a Chinese setting on p224, is the difference between harmony and unity.  By definition to create harmony there must be more than one input, ie there cannot be unity!  This insight is further developed by Baggini on p315 to illustrate how cultures could mix in what he describes as moral pluralism.  I like this idea but I would talk in terms of agonistic pluralism; I suspect we mean the same thing though, a world where we live with different ideas but find ways make space for each other’s ideas.

However I would also heed his warning on p314 that ideas are part of living ecosytems and must be transplanted carefully or they can wither and die.  This reminded me of his earlier comments on p214 about relational versus atomistic selves and how the Western focus on individuality has lost sight of belonging and community.  This has led, he suggests, to considerable misunderstanding and disenchantment amongst many of its citizens.  Disenchantment that, I feel, has led to an antipathy towards other cultures that are perceived, rightly or wrongly, as receiving more attention.

In the final chapter, on p338, he returns to pluralism as part of a world seen through a multitude of perspectives.  This undoubtedly chimes with my view of the world.  We are all on the Way (Dao) but each of us sees it from a different vantage point.  If we can accept this it may help us build a better world.