Is accounting for sustainability actually accounting for sustainability…and how would we know? An exploration of narratives of organisations and the planet

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Abstract

The emergence of sustainable development as the complex notion through which social and environmental issues must be addressed – whether at policy, personal or organisational levels – has had a growing influence in the accounting literature. In addition to explorations of what sustainability may mean for accounting and finance, we have experienced a growth in both critiques of sustainability reporting (sic) and in experiments and speculations on how accounting for sustainability might advance. This growth – as with social and environmental accounting before it – has very properly attracted critique. One convergent theme in that critique has been a challenge that much of the realist and procedural baggage associated with conventional accounting is no longer apposite when seeking to account for sustainability. What may be required, is a more nuanced understanding of what ‘sustainability’ actually is and how, if at all, it can have any empirical meaning at the level of the organisation. This essay seeks to initiate an auto-critique of accounting for sustainability via an examination of meanings and contradictions in sustainable development which, in turn, leads towards a suggestion for the development of multiple and conditional narratives that whilst no longer realist or totalising, explicitly challenge the hegemonic claims of business movements in the arena of sustainability and sustainable development.

Introduction

The language by which people justify their behaviour when challenged by another social actor… is an ‘account’…[T]he idea of accounts has been widely used … to study the ways in which … deviants attempt to deny or to reduce their responsibility for behaviour which is regarded as untoward or socially unacceptable. The use of accounts is a method of avoiding the stigma of an accusation of … deviance (Abercrombie, Hill, & Turner, 1984, p. 13).1

The development of social and environmental accounting and reporting over the last 40 years or so has resulted in a wide range of actual and potential accounts of (typically) organisational interactions with society and the natural environment. For all their strengths and weaknesses (Tinker et al., 1991, Owen et al., 1997, Lehman, 2001, Everett, 2004, Cooper et al., 2005), such accounts can be understood – to some degree at least – as narratives of local events articulating (with varying degrees of thoroughness and misdirection) the relationships of the organisation with (what have become to be regarded as) its “stakeholders” and/or its immediate substantive environment. When, sometime during the 1990s, we began to see organisations speak about “accounts of sustainability”, this linguistic turn, deliberately or not, drew our attention to a global scale. No longer were accounts potentially parochial things, loosely articulated through ill-specified notions of accountability and responsibility – they had become the contested terrain of global planetary desecration, of human and other species suffering and of social justice addressed through the language of sustainability, sustainable development and commerce.

The concerns we may have over social and environmental accounting – whether it be the failures of organisational accounts to (say) discharge accountability or the failures of its proponents to embrace real politik or to sufficiently embrace the contested nature of any such accounting (Tinker et al., 1991, Lehman, 2001, Everett, 2004, Cooper et al., 2005) – are certainly not trivial (Gray et al., in press, Owen et al., 1997, Gray, 2002). Such disputes and concerns take us to the heart of what we might seek in terms of balances of power and responsibility, what democracy might mean and whether capitalism needs to – and can be – reformed. Important though this might be, such concerns do not (usually) directly confront us with system-wide threats to do with life and death. And yet it is this plus matters as crucial as species extinction; what it is to be human; how we should engage with our humanity; and our responsibility to the planet that these appeals to sustainability and sustainable development raise.

It is increasingly well-established in the literature that most business reporting on sustainability and much business representative activity around sustainability actually have little, if anything to do with sustainability. (Beder, 1997, Gray, 2006b, Gray and Milne, 2002, Milne et al., 2006, Milne et al., 2003). Indeed these accounts might most easily be interpreted as how organisations would like to understand sustainability and how, in turn, it would convenience them if the body politic would accede to such a view. In doing so, business is in the process of constructing the dominant discourse around sustainability but in a way which – at best – ignores discourse in both the development literature and the development community as well as the growing body of scientific consensus. (Bebbington, 2001, Spence and Gray, 2008, Milne et al., 2008, Gray and Bebbington, 2007).

But there are more complex issues at work here. The most immediate is probably that any simple assessment of the relationship between a single organisation and planetary sustainability is virtually impossible. The relationships and interrelationships are simply too complex. Furthermore, to assume that the notion of “sustainability” has tangible meaning at the level of organisation is to ignore all we know about sustainability. Sustainability is a systems-based concept and, environmentally at least, only begins to make any sense at the level of eco-systems and is probably difficult to really conceptualise at anything below planetary and species levels. So whatever else organisational ‘accounts of sustainability’ are, they are probably not accounts of sustainability. (Gray and Milne, 2002, Gray and Milne, 2004, Milne et al., 2008).

The same reasoning, however, also applies to the proposals and experiments – predominantly academic – that have sought to challenge current organisational reporting practices and offer something that looks more like an account of – or report upon/narrative about – sustainability. In all probability, these are unlikely to be accounts of sustainability either. And, if they are probably not ‘accounts of sustainability’, what, indeed, are they?

This brings us to the principal thrust of this essay: To what extent, if at all, can we account for sustainability at the organisational level? More especially, what is this sustainability that we wish to account for and why would we wish to undertake such an accounting? Should we, in fact, seek to construct accounts about it (whatever it turns out to be)?

The initial departure point for this paper is a concern about the un-sustainability of current global human organisation. That concern is exacerbated by a commensurate concern that western, expansive, international financial capitalism in particular is implicated in this un-sustainability2. (Gladwin, 1993, Gladwin, 1999, Gladwin et al., 1995a, Gladwin et al., 1995b, Gladwin et al., 1997, Zimmerman, 1994, Kovel, 2002, Gray, 2006a). However, rather than take this starting point for granted – as the social and environmental accounting literature has tended to do to date (see, for example, Everett and Neu, 2000, Lehman, 2006) – this essay seeks to expose a more nuanced understanding of sustainability. More especially I wish to begin an exploration of what sort of sustainability it is that concerns us and, in so doing, to try to better understand how we might claim to know about (un)sustainability. Such an examination will raise some difficult and uncomfortable questions about the claims of an implicitly realist ontology and the epistemology(ies) that employ(s) it, (Quattrone, 2006). Indeed, it will transpire that the very notion of sustainability has a troubled relationship with modernity and it may well be that we need to enter, for instance, the unstable ontological territory of the aesthetic in order to understand how we know about sustainability. If we embrace such a level of doubt in our ontological and epistemological attachments we may need to more explicitly embrace the recognition that accounts of sustainability will both communicate and construct reality (as Hines, 1988; reminds us). Our challenge then becomes how to arbitrate between the claims of the purely rhetorical and those of the purely objective as humankind seeks to determine how it might engage more sensitively with this planet and its denizens.

Consequently, the paper is structured as follows. ‘What does accounting for sustainability look like?’ lays out what we might understand to be the current state-of-the-art in accounting for sustainability, considering both organisational and academic claims in this direction. ‘Sustainability? Conflicts, ambivalence and modernity’ delves into the complex and conflict-laden relationship that sustainability has with modernity. This provides a basis from which to explore a more nuanced understanding of sustainability in ‘So what is sustainability?’. ‘Organisations and sustainability?’ then tries to relate sustainability to the organisation: something which is great deal more difficult than typically assumed. ‘Accounting for sustainability?’ reintroduces accounting and then makes an attempt to discuss issues that might be thought to have emerged from the essay.

Section snippets

What does accounting for sustainability look like?

…“[accounts] are always engaged in interpreting a complex reality, partially, and in a way that is heavily weighted in favour of what the accountant is able to measure and chooses to measure, through the particular scheme of accounting to be adopted”. Morgan (1988, p. 480).

It has been said more than once that if one was looking to solve the problems of the world one would be unlikely to choose accounting as one’s starting point. However if we are to consider narratives of sustainability at the

Sustainability? Conflicts, ambivalence and modernity

“… in attempting to save nature from further destruction [the possibility is that radical ecologists will] repeat the errors that undermined modernity’s positive emancipatory aims and led to such ecological destruction” Zimmerman (1994, p. 7).

The subject matter of this paper is ‘sustainability’ and accounts thereof. But ‘sustainability’ (and, indeed, obvious analogues like ‘sustainable development’) is not only a contested and ambiguous term or concept but is frequently a captured one. As we

So what is sustainability?

“…. postmodern critical sensibility excommunicates the world of the spirit, absolutizes earthly man, instrumentally rationalizes all of life, and clings to the belief that fates can be mastered through science. Such secularization is believed to have led to moral anarchy, moral relativism, and cultural nihilism. With the dimming of spiritual life, society has become demoralized and self-restraint has evaporated. Many see the crisis of global unsustainability as fundamentally a moral problem

Organisations and sustainability?

It is not possible currently (and it may be that it never will be possible) to construct a fully reliable narrative that directly speaks of sustainability at the corporate or organisational level. This is because of three principal – and fairly insurmountable – reasons.

First, sustainability is both an ecological and societal concept which will only rarely, if at all, coincide with corporate or organisational boundaries. (Gray and Milne, 2004, Milne and Gray, 2007). That is we may speak of

Accounting for sustainability?

Accounting, certainly conventional accounting, must be thought of as the very essence of modernity and any engagement with an accounting needs to be braced against those biases of which Morgan (1988) warns us. More pertinently, Everett (2004) offers a telling counsel against the simplistic nature of much environmental accounting – particularly for its simplistic dualism. It seems correct that we should seek out penetrating criticisms of a simplistic (environmental) accounting – there will

Acknowledgements

This paper is derived from a presentation initially prepared for the AOS seminar “Calculating Sustainability” Venice, March 2007. The comments of participants at that seminar and the early stimulus of Anthony Hopwood and Fabrizio Panozzo are very gratefully acknowledged. Subsequent comments from, inter alia, Nick Barter, David Collison, Jesse Dillard, Sue Gray, Anthony Hopwood, Richard Laughlin, Markus Milne, David Owen, Paolo Quattrone, Crawford Spence, participants at the 2007 APIRA and CSEAR

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