Sustainability Accounting and Reporting in the Public Sector: Towards Public Value Co-Creation?

Abstract

The economic, social, and environmental contingencies of the last two decades have called into question the need for public sector organizations to align accounting practices with sustainable concerns. Sustainability refers to the ability of organizations to co-create economic value in the long run, involving all stakeholders, safeguarding the environment, and generating well-being for the community. While this topic attracts increasing interests from several perspectives, there is a lack of a comprehensive assessment of how academia is debating it. Therefore, this paper reviews the field of sustainability, accounting, and reporting (SAR) in the public sector in order to develop insights into how the literature is developing the theme of public value (PV) co-creation, offer a critique of the state-of-the-art to date, and outline future research opportunities. The study is based on a structured literature review (SLR) methodology that enables studying the corpus of scholarly literature, developing insights, critical reflections, and future research paths. The results highlight that, although the involvement of stakeholders appears as crucial for developing SAR practices in the public sector, scholars have not yet adopted a PV co-creation perspective to this phenomenon, since, at best, previous studies only focused on the stakeholders’ involvement, without considering other aspects such as synergistic integration of resources and alignment of purposes. Therefore, academics should rethink their research setting and implications to provide a significant contribution by conducting studies capable of leading future development of SA in the public sector.

Integrated thinking in the integrated reports of public sector companies. Evidence and contextual factors

“…In this context, non-financial information takes centre stage (Farneti and Guthrie, 2009; Guthrie et al , 2017; Nistor et al , 2019). Nonetheless, public organisations have difficulties connecting non-financial reporting and the process of creating public value (Tommasetti et al , 2020).…”

“…First, in the view of stakeholder theory, these entities must connect the process of value creation and the use of capitals with the expectations of a greater diversity of stakeholders, who exert increased pressure (Manes-Rossi, 2019; Tommasetti et al , 2020; Nicolò et al , 2020b). Particularly, in the public sector, citizens and the government are the primary recipients of the report so the informative function should also be extended to these groups.…”

“…Particularly, in the public sector, citizens and the government are the primary recipients of the report so the informative function should also be extended to these groups. Integrated thinking can contribute to respond to the greater complexity and diversity in the relationships of public entities with these stakeholders (CIPFA, 2016; Guthrie et al , 2017; Tommasetti et al , 2020). Citizens should be able to see this mindset reflected in the disclosure of information, justifying the use of taxpayer-funded resources (Nistor et al , 2019) and enabling an assessment of the sustainability of public service provision (CIPFA, 2016; Nistor et al , 2019).…”

Sustainable Public Procurement Best Practices at Sub-National Level:

“…65 the uptake of GPP at the Catalan level, 73 giving priority to the procurement of sustainable products, services and works under the general policy framework of innovative procurement. 74 Barcelona, on the other hand, defined PPI as solving societal challenges and needs by asking the market for the existing or future solutions which offer good value for money under the life cycle cost method, 75 fraiming its whole PPI strategy in terms of sustainability. More than a matter of reverse causality, the PPI policy in Barcelona seems to be subdued to sustainability concerns, 76 the latter having a higher position in the hierarcy of societal needs than the innovation itself.…”

“…74 RIS3CAT (n70). 75 In terms of social sustainability, the Catalan government built on the succes of the Sant Pau Hospital's Stop & Go 82 and RITMOCORE 83 projects to regionally implement new comprehensive and patient-centered care models for arrhytmias with implantable cardiac devices. Under the framework of RIS3CAT, a call for operational programme for the SISCAT centres has been issued with the objective of implementing CPI projects across Catalonia, resulting in 18 projects being chosen for a broader implementation of novel solutions for patient care.…”