Conceptualising future change in corporate sustainability reporting

Abstract

Purpose -The purpose of this paper is to conceptualise how future changes in corporate social disclosure (CSD), aimed at improving accountability for corporate performance to key stakeholder groups, might be brought about. Design/methodology/approach -Drawing on the work of the Austrian economist Ludwig von Mises with respect to human (and organisational) action and the work of Leon Festinger and Kurt Lewin with respect to human (and organisational) change, the paper examines how academics and other corporate stakeholders might effect changes in CSD. Findings -Managers act in a way which maximises their formal happiness (from von Mises) and change occurs following the creation of cognitive dissonance (Festinger) which leads to "unfreezing" (Lewin). Stakeholders can effect change by creating cognitive dissonance. With specific reference to Anglo-American limited liability and publicly traded corporations, such cognitive dissonance and unfreezing normally involves a perceived threat to profitability. Research limitations/implications -Research and theorising in corporate social disclosure patterns should take as given: that the managers of Anglo-American limited liability and publicly traded corporations continue to be strongly encouraged, via both legal and remunerative means, to maximize shareholder wealth; and that this state of affairs significantly influences the information which management choose to disclose. Future research might instead examine and consider means of creating sources of dissonance significant enough to result in managerial concern for change within the constraints imposed on managers of Anglo-American corporations. Such research might be conducted by engaging with organisations and their stakeholders. Practical implications -The findings have implications for the manner in which corporate stakeholders act and interrelate with others in order to effect change towards more complete and credible sustainability reports which demonstrate accountability for material impacts to key stakeholder groups. Originality/value -The paper focuses on how change in corporate behaviour might be brought about given the personal motivations and institutional constraints imposed on the behaviour of corporate actors.

Conceptualising the contemporary corporate value creation process

“…In response Adams (2002) called for more case study work examining internal contextual factors and in recent years a growing body of research has sought to understand the inter linkages between corporate sustainability reporting practices and other organisational functions with increasing recognition that internal factors both influence and are influenced by reporting practices (see for example Adams and McNicholas, 2007;Correa and Larrinaga, 2015;Cho et al, 2015;Lodhia, 2015;Milne and Gray, 2013;Queen, 2015). This work has increasingly drawn on broader management and social science theories to understand (impediments to) particular aspects of the transformation processes such as, for example, the role of social actors or stakeholders in the transformation (see, for example, Adams and Whelan, 2009;Archel et al, 2011;Gray et al, 2014;Hall et al, 2015), or the role of individual organisational actors (Cho et al, 2015;Hahn et al, 2014).…”

“…Other external factors that influence the relationship between ESG risk and opportunity, strategy and value creation (the blue box in figure 1) could include social and environmental issues at the global (such as those in KPMG, 2011), regional or national levels and the actions of stakeholders and social actors (see, for example, Adams and Whelan, 2009;Archel et al, 2011;Gray et al, 2014;Hall et al, 2015).…”

Determinants of intention to engage in Sustainability Accounting & Reporting (SAR): the perspective of professional accountants

“…The concept of SAR has evolved out of the need to increase corporate accountability and transparency about the impact of corporate decisions on the environment and society as a whole (Ball et al 2000;Adams and Whelan 2009). This according to Henri and Journeault (2010) is critical to the development of decision support systems for enhancing corporate sustainability management.…”

Configuring management control systems: Theorizing the integration of strategy and sustainability

“…Sustainability involves organizational strategic renewal [2,3] as well as the creation of new calculative practices which drive, for example, the development of carbon trading markets [4,5]) and sustainability accounting and reporting [6,7,8]. This has led to the emergence of alternative paradigms to the financial profit maximisation captured in such phrases as the 'triple bottom line' in which economic, social and ecological criteria of performance are expected to be integrated [9].…”