Sustainability accounting education, regulation, reporting and stakeholders
ADVANCES IN ENVIRONMENTAL ACCOUNTING & MANAGEMENT: SOCIAL AND ENVIRONMENTAL ACCOUNTING IN BRAZIL
ADVANCES IN ENVIRONMENTAL ACCOUNTING & MANAGEMENT Series Editors: Ataur Belal and Stuart Cooper Recent Volumes: Volume 5:
Accounting for the Environment: More Talk and Little Progress, 2014
Sustainability, Environmental Performance and Disclosures, 2010
Environmental Accounting: Commitment or Propaganda, 2006
Advances in Environmental Accounting and Management, 2003
Advances in Environmental Accounting and Management, 2000
ADVANCES IN ENVIRONMENTAL ACCOUNTING & MANAGEMENT VOLUME 6
ADVANCES IN ENVIRONMENTAL ACCOUNTING & MANAGEMENT: SOCIAL AND ENVIRONMENTAL ACCOUNTING IN BRAZIL SERIES EDITORS ATAUR BELAL Aston University, Birmingham, UK STUART COOPER University of Bristol, Bristol, UK GUEST EDITOR FÁTIMA DE SOUZA FREIRE University of Brasília, Brazil
United Kingdom – North America – Japan India – Malaysia – China
the chapters are those of the authors. Whilst Emerald makes every effort to ensure the quality and accuracy of its content, Emerald makes no representation implied or otherwise, as to the chapters’ suitability and application and disclaims any warranties, express or implied, to their use. British Library Cataloguing in Publication Data A catalogue record for this book is available from the British Library ISBN: 978-1-78635-376-4 (Print) ISBN: 978-1-78635-375-7 (Online) ISBN: 978-1-78714-629-7 (Epub) ISSN: 1479-3598 (Series)
CONTENTS EDITORIAL ADVISORY BOARD LIST OF CONTRIBUTORS LIST OF REVIEWERS ACKNOWLEDGMENTS REFLECTIONS ON EDITING ADVANCES IN ENVIRONMENTAL ACCOUNTING & MANAGEMENT Martin Freedman and Bikki Jaggi
GUEST EDITORIAL: INTRODUCTION TO THE SPECIAL ISSUE Fátima de Souza Freire
HEGEMONIES, POLITICS, AND THE BRAZILIAN ACADEMY IN SOCIAL AND ENVIRONMENTAL ACCOUNTING: A POSTSTRUCTURAL NOTE Barbara de Lima Voss, David Bernard Carter and Bruno Meirelles Salotti
AN ANALYSIS OF THE ADHERENCE TO GRI FOR DISCLOSING INFORMATION ON SOCIAL ACTION AND SUSTAINABILITY CONCERNS Vicente Lima Crisóstomo, Priscila de Azevedo Prudêncio and Hyane Correia Forte
FINANCIAL PERFORMANCE OF STOCKS OF COMPANIES PARTICIPATING IN THE CARBON EFFICIENT INDEX (ICO2)
Patrícia Lacerda de Carvalho and Aldo Leonardo Cunha Callado
PERFORMANCE OF SUSTAINABILITY AND NEGOTIABILITY INDEXES IN THE BRAZILIAN STOCK MARKET Patrícia Lacerda de Carvalho and Orleans Silva Martins
DO ENVIRONMENTAL DISASTERS IMPACT ON THE VOLUME OF SOCIO-ENVIRONMENTAL INVESTMENT AND DISCLOSURE OF BRAZILIAN COMPANIES? José Venâncio Ferreira Neto, Sônia Maria da Silva Gomes, Adriano Leal Bruni and José Maria Dias Filho
EDITORIAL ADVISORY BOARD Professor David Campbell Newcastle University, UK Professor Charles Cho ESSEC Business School, France Professor Aracéli Cristina de S. Ferreira Universidade Federal do Rio de Janeiro, Brazil Professor Maisa de Souza Ribeiro University of Sao Paulo, Brazil Professor Charl de Villiers University of Auckland, New Zealand Professor Martin Freedman Towson University, USA Dr. Suzana Grubnic Loughborough University, UK Professor Christian Herzig University of Kassel, Germany Professor Mike Jones University of Bristol, UK Dr. Matias Laine University of Tampere, Finland Professor Carlos Larrinaga-Gonzalez Universidad de Burgos, Spain Professor Glen Lehman
University of South Australia, Australia Professor Collins Ntim University of Sothampton, UK Professor Carlos Noronha University of Macau, Macau Professor Brendan O’Dwyer University of Amsterdam, The Netherlands Professor Lee D. Parker RMIT University, Australia Professor Dennis Patten Illinois State University, USA Professor Robin Roberts University of Central Florida, USA Professor Stefan Schaltegger Leuphana University Lüneburg, Germany Dr. Javed Siddiqui University of Manchester, UK Professor Chris van Staden Auckland University of Technology, New Zealand
LIST OF CONTRIBUTORS Aldo Leonardo Cunha Callado
Federal University of Paraíba, Paraíba, Brazil
David Bernard Carter
Faculty of Business, Government and Law, University of Canberra, Canberra, Australia
Patrícia Lacerda de Carvalho
Federal University of Pernambuco, Pernambuco, Brazil
Vicente Lima Crisóstomo
Department of Accounting, Federal University of Ceará, Ceará, Brazil; University of Valladolid, Valladolid, Spain
Sônia Maria da Silva Gomes
Federal University of Bahia, Bahia, Brazil; Federal University of Santa Catarina, Florianópolis, Brazil
José Maria Dias Filho
Federal University of Bahia, Bahia, Brazil; University of São Paulo, São Paulo, Brazil
José Venâncio Ferreira Neto
Federal University of Bahia, Bahia, Brazil
Hyane Correia Forte
Federal University of Ceará, Ceará, Brazil
Towson University, Towson, MD, USA
Fátima de Souza Freire
Departamento de Ciências Contábeis e Atuárias, Faculdade de Administração, Contabilidade e Economia, Universidade de Brasília, Brasília, Brazil
Rutgers University, New Brunswick, NJ, USA
Adriano Leal Bruni
Federal University of Bahia, Bahia, Brazil; University of São Paulo, São Paulo, Brazil
Orleans Silva Martins
Federal University of Paraíba, Paraíba, Brazil
Priscila de Azevedo Prudêncio
Federal University of Ceará, Ceará, Brazil
Bruno Meirelles Salotti
School of Economics, Business and Accounting, University of São Paulo, São Paulo, Brazil
Barbara de Lima Voss
School of Economics, Business and Accounting, University of São Paulo, São Paulo, Brazil
LIST OF REVIEWERS Aracéli Cristina de S. Ferreira Federal University of Rio de Janeiro – UFRJ, Rio de Janeiro, Brazil André Luiz Bufoni Federal University of Rio de Janeiro – UFRJ, Rio de Janeiro, Brazil Maisa de Souza Ribeiro University of São Paulo – USP, São Paulo, Brazil
ACKNOWLEDGMENTS We would like to acknowledge the support and help extended to us in the compilation of the special issue. Thanks are due to colleagues Maisa Sousa Ribeiro, Araceli Cristina de Sousa Ferreira, André Luiz Bufoni, and Sônia Maria da Silva Gomes for their excellent organization of the South American CSEAR Conference 2015 at Bahia, Brazil.
REFLECTIONS ON EDITING ADVANCES IN ENVIRONMENTAL ACCOUNTING & MANAGEMENT Martin Freedman and Bikki Jaggi
ABSTRACT The purpose of this paper is to provide a reflection on our time of creating and editing AEAM. Our planet is and will continue to experience some environmental turmoil in the future. Accounting educators and the professionals need to determine how they can contribute to abating the environmental consequences of past and present political and economic decisions that have placed the planet in this perilous state. The volumes we produced included articles discussing accounting’s role in assessing and reporting on environmental conditions and some suggest how accounting can contribute to alleviating some of these problems. The reflections we provide are our understandings of the contributions that the works in the first five volumes of the series have made in advancing the discussion in the field of environmental accounting. As editors we have a unique view of these contributions. Almost certainly more than any other single factor, the adoption of the Kyoto Protocol (Kyoto) in December 1997 triggered increased discussion on the possibility for a sustainable future for our planet. Considered a watershed event in recognizing the need to reduce greenhouse gas (GHG) emissions, Kyoto provided a strong impetus for research, not only with respect to GHG reductions, but also for accounting issues associated with environmental measurements and disclosures. Thus, a growing number of accounting scholars, many of them new to the field, started producing studies concerned with environmental accounting and disclosure. Unfortunately, because the major North American mainstream accounting journals had largely ignored the social and environmental realm over the last part of the twentieth century (see, e.g., Cho & Patten, 2010; Deegan & Soltys, 2007; Patten, 2013), publication outlets for this expanding body of work were limited to a few key journals including Accounting, Organizations and Society, Accounting, Auditing & Accountability Journal, Critical Perspectives on Accounting, and a handful of others (many of which published environmental-themed articles only sporadically). Although our original intent was to publish a book on environmental accounting, a publisher’s representative instead suggested we start a journal. Thanks to the JAI publishers agreeing in 1998 to its launch, Advances in Environmental Accounting and Management (AEAM) now provided another quality outlet for environmental accounting research.
We published the first issue of AEAM in 2000 and, as would be the case throughout our tenure as editors of the journal, topical coverage across the contributions was wide. The volume included theoretical articles dealing with accounting, ethics, environment, and the role of business in dealing with environmental issues. Reflecting a debate that continues to this day, the inaugural AEAM also included empirical pieces providing support for environmental disclosure being explained by legitimacy theory (Patten, 2000) and alternatively, by voluntary disclosure theory (Bewley & Li, 2000). By the time the second volume was published in 2002 (by Elsevier which acquired JAI), Kyoto was closer to ratification and climate change continued to be much debated. The relatively young European Union (EU) was committed to the Kyoto Protocol and was in the process of developing a system of cap-and-trade to reduce GHG emissions.1 But the importance of Kyoto was overshadowed by the turmoil in the financial markets in the United States at the turn of the twenty-first century as, for example, several large corporations including Enron, WorldCom, and Tyco International were involved in major financial scandals. Many considered accountants culpable in these scandals, and Enron’s financial manipulations ultimately led to the downfall of its auditor, the Big 8 accounting firm, Arthur Andersen. These developments provided a strong impetus for passage of the Sarbanes– Oxley Act at the end of July 2002. In general, the papers appearing in the second volume largely expressed concerns about corporate environmental (and sometimes social) reporting. For example, one of the articles (Epstein, 2004) provided a history of social accounting and indicated that, while the level of social disclosure had increased, its quality had not, thus making a case for integrating social accounting and management decision-making. Another article (Hunt & Grinnell, 2004) echoed findings of an earlier study (Schmidheiny & Zorraquin, 1998) by documenting that financial analysts do not find environmental disclosures made in annual reports particularly useful. In some respects, the largest theme within the second volume was that environmental disclosures, which are mostly voluntary, are motivated by something other than the reflection of what actually occurred. Finally, the issue also included what we believe to be the first accounting article discussing disclosures within a cap-and-trade system as it focused on the U.S. electric utilities and cap-and-trade for sulfur dioxide emissions (Freedman, Jaggi, & Stagliano, 2004). By 2006, when the third volume was published, the EU already had begun its cap-and-trade system for GHG emissions, although it was only a practice round for the real system that would begin two years later. In the United States, the Bush administration continued to deny human culpability for global warming. On a more positive note, substantially more firms across the world were producing social/environmental sustainability reports and many of them were following the Global Reporting Initiative guidelines. While the third volume of AEAM included articles providing at least some degree of optimism in terms of environmental disclosures and performance, these were tempered by concerns with the progress that was really being made. The overall story from this volume seems to be that if companies make a real commitment to improve environmental performance, it can be achieved. However, there is a difference between real commitment and paying lip service to environmental concerns, and unfortunately, the latter seems to be the norm. Emerald purchased AEAM from Elsevier and the fourth volume was published by Emerald in 2010. By this time, the EU’s real cap-and-trade system was up and running, but in spite of this, and
other efforts worldwide, global GHG emissions continued to grow. Positively, the push for utilizing renewable energy sources including wind, solar, and geo-thermal continued to grow. The title of the fourth volume was “Sustainability, Environmental Performance and Disclosures,” partly to reflect that sustainability had become a hot topic in academia. The American Accounting Association had a plenary session in its annual meeting devoted to sustainability and it was also the theme of the annual Academy of Management meeting. As was true of most of the other volumes in this series, the fourth volume contained considerable variety with respect to the issues examined. One article (Gray, Owen, & Adams, 2010) provided the basis for a theory of social accounting (specifically noting environmental accounting as a subset of the theory), while another discussed the limitations with respect to publishing in the social and environmental accounting domain (Cho & Patten, 2010). A third article ( Brown, Guidry, & Patten, 2010) documented that the quality of stand-alone sustainability reports appears to matter with respect to impacts on corporate reputation. Consistent with one of the articles from the prior issue, one of the papers (Weisnner, Epstein, & Bagozzi, 2010 ) showed that firms making a true commitment to improve their environmental performance by integrating the environment into their managerial decisions do the best environmentally. Finally, the volume contained a study ( Freedman & Jaggi, 2010) of disclosures concerning Kyoto and GHG emissions that found companies headquartered in the EU disclosed less than Canadian or Japanese companies (and that environmental disclosures within the EU companies differed with regard to quantity as well as quality). Our last volume was published in 2014 and it included papers concerning Chinese social accounting, corporate governance and environmental performance, measuring environmental performance, developing a framework linking management controls to sustainability and the impact on companies of the SEC mandated climate change regulation. Although the papers seemed to continue the trend of both good and bad news about business and sustainability, we cannot help feeling that the small incremental steps toward a cleaner and healthier future for the planet are not leading to successful results. We began this journey as editors with hopes for the environment and the role that the accounting profession might play in helping to protect it, but more than a decade and a half in, they still remain as hopes. Though several countries of the world are still discussing ways to reduce their impacts on climate change, GHG emissions continue to increase. Kyoto had a success in that the EU did decrease its overall GHG emissions by 8 percent compared to 1990s emissions, but Australia, which had become a belated participant in Kyoto, instituted and then rescinded a carbon tax. Canada dropped out of the agreement altogether. More positively, the United States and China have orally agreed to reduce their GHG emissions while the EU agreed to a 40 percent reduction. Of course, it is only through execution that such statements become more meaningful and we will see what actually transpires. The Intergovernmental Panel on Climate Change (IPCC) indicated that the effects of climate change are already upon us. Forests are dying, land ice is melting throughout the world, seas are rising resulting in coastal flooding, and heat waves are killing crops and people (Gillis, 2014). Drastic action is needed and the accounting profession has not been at the forefront of the social/environmental/sustainability movement. While many firms have produced stand-alone environmental/sustainability reports and some of these have been audited, these companies represent a small fraction of the world’s business organizations. Furthermore, given the limited regulations
regarding environmental (and other sustainability) disclosure (and the findings that even those that are mandated seem to lack meaningful compliance – see, e.g., Cho, Freedman, & Patten, 2012), it appears that most of the corporate sustainability reporting is more about image than transparent accountability. Without greater accountability for the consequences of industrialization and modernity, the future of the planet and its inhabitants, as documented by the IPCC, will face ever increasing trouble. We really believe that accounting can play a positive role in addressing the environmental concerns facing the world, but we must admit a degree of pessimism in that regard. As we stated in the introduction to our last volume of AEAM, accounting educators, at least in the United States, rarely teach the issues of sustainable/environmental accounting. And while AEAM has been joined by at least a few other academic outlets for sustainability-themed research, the major mainstream North American accounting research journals, in spite of publishing a few articles purportedly dealing with social or environmental connections, do not seem to understand the real nature of the problem (see, e.g., Patten, 2013). Accordingly, we see the role of journals such as this one as immeasurably important. Our reflection would not be complete without some acknowledgment of those who helped to make our journal the success that we believe it has been. First and foremost amongst this group are the researchers who considered AEAM as an outlet for their studies. We appreciate not only the choice to submit to the journal, but also that so many of the authors were willing to endure the process of revising and resubmitting their articles (some for a number of rounds). As editors, our work was also made easier by our supportive editorial board. One of the critical activities in creating AEAM was the formation of the editorial board. Its creation was important because the body both provides feedback to the editors about strategic planning for the journal and also serves as a source for choosing the right people to review the submitted papers (not to mention the members doing reviews themselves). Since we were not sure what specific environmental topics would be covered by submissions, we decided to create a board whose expertise spanned many potential areas. Accordingly, our choice of the board members was influenced by our expectation of submissions on the broad themes related to environmental accounting, management, and economics, and we believe we did a good job of bringing in recognized scholars across all of these areas. Particularly in the process of producing the first two volumes, we discovered that there were some reviewers who were dependable and provided excellent and timely reviews. This was true for both editorial board members and ad hoc reviewers. Like all peer-reviewed publication outlets, reliance on ad hoc reviewers is a crucial factor in running the journal, and we chose these reviewers based on their expertise with respect to the topic covered by the submission (e.g., a particular ad hoc reviewer might have been cited by authors in their articles or he or she may have had a reputation in the area). It is amazing that, almost without exception, when asked, these people would readily agree to review a paper for the journal, and most of the reviews were excellent. Over the years, we received much help, advice, and encouragement from our colleagues with respect to the journal. And while we cannot name everyone, we would like to especially thank Den Patten and A. J. Stagliano, who served as associate editors for a number of the volumes, and Nola Buhr, for their contributions, cooperation, and excellent and timely reviews. We enjoyed editing these five volumes of AEAM.
NOTE 1. The United States, however, was moving in the opposite direction. Bill Clinton, U.S. President at the time of Kyoto’s adoption, chose not to ask the Senate to ratify the agreement, based largely on substantial opposition to the treaty amongst legislators. The next President, George W. Bush, did not support Kyoto and did not believe that global warming was even a problem, and obviously never called for passage of Kyoto in the United States. And although Barack Obama, who came to office in 2009, was far more liberal on environmental issues, he, too, has never pressured for ratification of the treaty. Thus, the United States has never been a formal participant in the Kyoto Protocol.
REFERENCES Bewley, K., & Li, Y. (2000). Disclosure of environmental information by Canadian manufacturing companies: A voluntary disclosure perspective. Advances in Environmental Accounting and Management, 1, 201–226. Brown, D. L., Guidry, R. P., & Patten, D. M. (2010). Sustainability reporting and perceptions of corporate reputation: An analysis using Fortune most admired scores. Advances in Environmental Accounting and Management, 4, 83–104. Cho, C. H., Freedman, M., & Patten, D. M. (2012). Corporate disclosure of environmental capital expenditures: A test of alternative theories. Accounting, Auditing and Accountability Journal, 25(3), 486–507. Cho, C. H., & Patten, D. M. (2010). Social and environmental accounting in North America: Who? Where? Whither? Advances in Environmental Accounting and Management, 4, 161–177. Deegan, C., & Soltys, S. (2007). Social accounting research: An Australian perspective. Accounting Forum, 31(1), 73–89. Epstein, M. J. (2004). The identification, measurement and reporting of corporate social impacts: Past, present and future. Advances in Environmental Accounting and Management, 2, 1–30. Freedman, M., & Jaggi, B. (2010). Global warming and corporate disclosures: A comparative analysis of companies from the European Union, Japan and Canada. Advances in Environmental Accounting and Management, 4, 129–160. Freedman, M., Jaggi, B., & Stagliano, A. J. (2004). Pollution disclosures by electric utilities: An evaluation of the first phase of the 1990 Clean Air Act. Advances in Environmental Accounting and Management, 2. Gillis, J. (2014). U.N. panel issues its starkest warning on global warming. The New York Times, November 3, p. A6. Gray, R., Owen, D., & Adams, C. (2010). Some theories for social accounting? A review essay and tentative pedagogic categorization of theorisations around social accounting. Advances in Environmental Accounting and Management, 4, 1–54. Hunt, H. G., & Grinnell, J. (2004). Financial analysts’ views of the value of environmental information. Advances in Environmental Accounting and Management, 2, 101–120. Patten, D. M. (2000). Changing superfund disclosure and its relation to the provision of other environmental information. Advances in Environmental Accounting and Management, 1, 101–122. Patten, D. M. (2013). Lessons from the third wave: A reflection on the rediscovery of corporate social responsibility by the mainstream accounting research community. Financial Reporting, 2(1), 9–26. Schmidheiny, S., & Zorraquin, F. J. L. (1998). Financing change. The financial community, eco-efficiency, and sustainable development. Cambridge, MA: MIT Press. Weisnner, P. S., Epstein, M. J., & Bagozzi, R. P. (2010). Environmental proactivity and performance. Advances in Environmental Accounting and Management, 4, 105–128.
GUEST EDITORIAL: INTRODUCTION TO THE SPECIAL ISSUE Fátima de Souza Freire The papers in this special issue include a selection of articles presented at the 2015, CSEAR conference in Brazil. This special issue is aimed at celebrating the research that Brazilian social and environmental accounting researchers have been undertaking for some time. As far as we know this is the first special issue compiled for this purpose. The first paper in this special issue by Barbara de Lima Voss, David Bernard Carter, and Bruno Meirelles Salotti in “Hegemonies, Politics and the Brazilian Academy in Social and Environmental Accounting: A Post-Structural Note” undertakes a comprehensive review of the Brazilian research on social and environmental accounting (SEA). The paper highlights the hegemony of business case thinking and the dominance of the economic imperative in Brazilian SEA research. Adopting a poststructural perspective that reflects Laclau and Mouffe’s discourse theory, a total of 352 articles are analyzed that reflect the Brazilian literature on SEA. In “An Analysis of the Adherence to GRI for Disclosing Information on Social Action and Sustainability Concerns,” Vicente Lima Crisóstomo, Priscila de Azevedo Prudêncio, and Hyane Correia Forte investigate the degree of adherence to the Global Reporting Initiative (GRI) by organizations from all over the world, as well as the quality of CSR reports using institutional and legitimacy theoretical frameworks. The sample consists of annual data from all organizations that have disclosed sustainability reports through GRI since its first year, 1999, until 2013. By means of a set of chi-squared tests, they evaluate whether organizational attributes are associated with the quality of organizations’ CSR reporting. They conclude that the legal and institutional environment, organization size, and type of organization have an influence on the use of GRI as a means to report organizations’ CSR. These variables have also influenced the quality of information of organizations’ GRI reports. Patrícia Lacerda de Carvalho and Aldo Leonardo Cunha Callado compare the financial stock performance of Brazilian companies that participate in the Carbon Efficient Index with those that participate only in market-wide indices of the São Paulo Stock Exchange (BM&FBovespa) in “Financial Performance of Stocks of Companies Participating in the Carbon Efficient Index (ICO2).” To draw up a comprehensive picture of the Brazilian stock market, the sample is comprised of four BM&FBovespa indices, namely, ICO2, the Bovespa Index (IBOV), Brazil 100 Index (IBrX100), and Brazil 50 Index (IBrX50). The ICO2 is the only sustainability index. They reveal that sustainable enterprises consider not only financial results but also intrinsic environmental and social benefits. Complementing the previous study, in “Performance of Sustainability and Negotiability Indexes in the Brazilian Stock Market,” Patrícia Lacerda de Carvalho and Orleans Silva Martins examine and compare the stock returns of the sustainability index member companies with the returns of companies out of these indexes. All information from two indexes on sustainability and social responsibility of the Brazilian stock market were used in the study. The review period was 2005–2014. They infer that
the sustainability indexes do not indicate higher returns although Brazilian companies with sustainable practices appear to be concerned with economic performance and social, cultural, and environmental issues. Finally, José Venâncio Ferreira Neto, Sônia Maria da Silva Gomes, Adriano Leal Bruni and José Maria Dias Filho in “Do Environmental Disasters Impact on the Volume of Socio-environmental Investment and Disclosure of Brazilian Companies?” investigate the impact of environmental disasters on the volume of disclosure and investments of Brazilian companies in the period 1997– 2012. The authors have shown that the companies reported a higher volume of socio-environmental disclosure in the two years after the occurrence of the accidents. We hope that the contributions contained within this special issue will stimulate further reflections and discussions on the topics presented and discussed by the authors. Finally, we would like to thank all authors for submitting their papers and their willingness to engage with the review process. We would also like to thank the reviewers of this special issue for their time and efforts against a rather tight time frame.
HEGEMONIES, POLITICS, AND THE BRAZILIAN ACADEMY IN SOCIAL AND ENVIRONMENTAL ACCOUNTING: A POST-STRUCTURAL NOTE Barbara de Lima Voss, David Bernard Carter and Bruno Meirelles Salotti
ABSTRACT We present a critical literature review debating Brazilian research on social and environmental accounting (SEA). The aim of this study is to understand the role of politics in the construction of hegemonies in SEA research in Brazil. In particular, we examine the role of hegemony in relation to the co-option of SEA literature and sustainability in the Brazilian context by the logic of development for economic growth in emerging economies. The methodological approach adopts a post-structural perspective that reflects Laclau and Mouffe’s discourse theory. The study employs a hermeneutical, rhetorical approach to understand and classify 352 Brazilian research articles on SEA. We employ Brown and Fraser’s (2006) categorizations of SEA literature to help in our analysis: the business case, the stakeholder–accountability approach, and the critical case. We argue that the business case is prominent in Brazilian studies. Second-stage analysis suggests that the major themes under discussion include measurement, consulting, and descriptive approach. We argue that these themes illustrate the degree of influence of the hegemonic politics relevant to emerging economics, as these themes predominantly concern economic growth and a capitalist context. This paper discusses trends and practices in the Brazilian literature on SEA and argues that the focus means that SEA avoids critical debates of the role of capitalist logics in an emerging economy concerning sustainability. We urge the Brazilian academy to understand the implications of its reifying agenda and engage, counter-hegemonically, in a social and political agenda beyond the hegemonic support of a particular set of capitalist interests. Keywords: Social and environmental accounting; sustainability; discourse theory; poststructuralism; emerging economies
The politics of social and environmental accounting (SEA) focuses on understanding, interpreting, and enacting notions of sustainability, corporate responsibility, and social participation in a sustainable world. In a complex interplay, sustainability incorporates, interacts with, and articulates from a range of rhetorical and political influences, including sustainable development, corporate social responsibility, and SEA. For us, we suggest that this provides opportunities for hegemonic politics, rhetoric, and post-structuralism. Sustainability derives from “sustain.” While “sustain” could have a myriad of meanings, the logic of capitalism was quick in attempts to limit the scope of meaning that might apply to “sustain,” as economics sought to confine the definition as a form of economic growth– sustainable economic growth was defined in 1965 as “economic growth [where] economic stagnation will not set in” (Simpson & Weiner, 1989 , p. 327). We are interested in this signification process whereby economics is attached to sustainable, and in particular, the implications of “growth” and “development.” One issue that we will examine in this paper is the rhetorical politics between development in the traditional economic sense and development in the sustainable development context. We argue that sustainability and SEA discourses, and consequently, the tools and techniques of SEA and sustainability are within the ambit of advanced capitalist societies. This, we argue, poses significant challenges in relation to the employment and adoption of SEA and sustainability into emerging economies, and especially, in this context, in relation to Brazil. A dominant development agenda (in the traditional economic growth context), we argue, poses significant challenges for a sustainable development agenda, and we argue that the import between these two agendas (they are antagonistic to the other) has special significance for how SEA literatures and practices have informed the adoption, employment, and critique of SEA in Brazil. Sustainable development received significant attention in the literature, with much of the debate focused on the oft-cited definition of sustainable development in the Brundtland report (1987, p. 4): Sustainable development is a familiar concept to people concerned with the environment … we define sustainable development in simple terms as paths of progress which meet the needs and aspirations of the present generation without compromising the ability of future generations to meet their needs.
The problem for us, though, in a similar vein to Cintra and Carter (2012), is that this definition is in effect, an empty signifier, as there is little consensus on what is signified by sustainability, sustainable development, or SEA. Acting in the “name” of sustainability requires articulation, and we argue that the articulatory practices in Brazil, due to its emerging economic status, renders the development of “sustainability” and “responsibility” vulnerable to co-option by other political economy movements, such as economic development. Gray (2010, p. 48) argues: …[A]ny 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.
Gray (2010) suggests an inherent lack (at definitional and systemic levels), and consequently, we hold that this “lack” is magnified in the emerging economy context, as sustainability is vulnerable to economic development and growth agendas, as users of the capitalist system point to the logic of wealth creation and upward class mobility through socioeconomic groupings such as lower middle class as evidence of development. One might suggest that this agenda runs contrary to “sustainability” which holds a deeper commitment to the longer term, and this contingency suggests scope for
hegemonic politics. Despite this, it is clear that significant numbers of Brazilian companies provide sustainability reporting, despite a lack of clearly defined boundaries around what constitutes sustainability. As Cintra and Carter (2012, pp. 112–113) argue: For sustainable development, Brazil is intriguing. It is an essential player due to its vast natural resources and the Amazonian rainforest draws attention to environmental issues … Economically, Brazil is a developing country, with the potential to be an economic powerhouse … the private corporate sector – multinational and national entities – play an important role in the country’s economic development. But this has been the source of some controversy. The capitalist, corporate need for growth is the antithesis, potentially, of sustainability. We see evidence of this in critical reports of Brazil’s biofuel industry, the sugar cane industry, and Amazonian deforestation.
Lohmann (2009, pp. 511–512) continues a similar line of critique through critiquing carbon credits: One example of this overflow can be found in the actions of residents of an area of Minas Gerais, Brazil, much of whose land a local company, Plantar, had been occupying to plant environmentally destructive eucalyptus plantations to produce charcoal to fuel its pig iron operations … The residents vociferously opposed the accounting procedures involved: “The argument that producing pig iron from charcoal is less bad than producing it from coal is a sinister strategy … [W]e want to prevent these impacts and construct a society with an economic policy that includes every man and woman, preserving and recovering our environment” (FASE, 2003). In a June 2004 letter to the CDM Executive Board, some 143 local groups and individuals, after insisting that “the claim that without carbon credits Plantar…would have switched to coal as an energy source is absurd,” went on to characterize the accounting procedure as a “threat:” “It is comparable to loggers demanding money, otherwise they will cut down trees…[the CDM] should not be allowed to be used by the tree plantation industry to help finance its unsustainable practices.” (Suptitz et al., 2004)
This suggests the tension between corporate growth, economic development, sustainability, social development, and environmental protection. For Brazil, despite some economic development, there is much work to do with respect to social development: there is a tremendous gap between rich and poor, and there is much to do to improve quality of life standards. For example, approximately nine percent of the population (16 million people) earn less the $70 Reais per month (approximately $40 USD/month) – Minister for Social Development, Tereza Campello (MDS, 2010). Thus, while the Brundtland report may constitute an attempt to develop a formal, universal understanding of what sustainable development might mean, the reality is that that definition raises more questions than it answers and even if we were living in a sustainable world, we would not have the ability to determine if that is the case. One reason for this disappointment might be that sustainability requires a significant shift in democratic and social values, as a form of revolution against the cult of the individual promulgated by the modernist, liberal, contractarian social order. In this, sustainability may invoke broader democratic, communitarian values, where life chances do not depend on bargaining positions (Millon, 1993, p. 1379), and thus, sustainability invokes an imagery of a fairer society based on sharing, protecting, and caring at the collective level, where we owe obligations to each other merely by our existence in society. In a Rousseauian version of the social contract, to maximize liberty, fraternity, equality, and sustainability, we may have to give “something up.” In brief, sustainability is an open, antagonistic concept that is systematically under rhetorical challenge from development, in the economic growth context; for us, this illustrates that sustainability and SEA are subject to changes and attempts to close and constrain its meanings and for us, this invokes the political: which in a post-structural sense, is always implicated, as “some sort of shadowy underside of politics” (Devenney, 2002, p. 176). Sustainability, though, is a social construct. This is rendered explicit in the original Brundtland
report, which suggests: [Sustainable development] contains within it two key concepts: the concept of needs, in particular the essential needs of the world’s poor, to which overriding priority should be given; and the idea of limitations imposed by the state of technology and social organization on the environment’s ability to meet present and future needs. (Brundtland, 1987)
Invoking poverty, technology and social organization render, rhetorically, sustainability a social construct (Suddaby & Greenwood, 2005). However, the integration of society into articulations of sustainability and SEA has proven more complex, largely because discourses of economic growth and sustainability are not easy to integrate: one discourse may require sacrifice from the other discourse. In accounting, Gray (2010, p. 53) argues that the contradictions between sustainable development and the organization result in the debate concerning the notion of sustainability and sustainable development being reconfigured to suit powerful groups. This “re-articulation” or “redescription” of sustainability operates to draw attention away from any internal conflicts of logic, such as the potential sacrifices concerning economic growth. We argue that economic growth and sustainability should antagonize each other, but powerful hegemonic politics, mobilized predominantly through the emerging economy discourse of development (growth) operates to “redescribe” and “re-orient” sustainability into a more acceptable discourse (more acceptable as the discursive threat is rendered weaker). We argue that the social meaning of sustainability, sustainable development, and SEA changes with changes in social politics. In this, as accounting is the language of capital, its integration into the sustainability space, through SEA and other manifestations, further obfuscates these hegemonic processes, as accounting operates to obfuscate conflicts of interest within societies and between organizations and societies. Equally, the academy plays a role here, as few scholars question corporate sustainability and comparatively fewer illustrate corporate unsustainability. Gray (2010) and Boyce (2000) contend that accounting should recognize the multiple voices of accounting for sustainability instead of privileging the narrow narratives of accounting for a hegemonic developmental economic purpose. This study constitutes a critical intervention. A critical intervention recognizes that hegemony is embedded in social demands, political agendas, and economic interests. However, this is not to suggest that critical intervention takes only one form, as for example, Spence (2009) argues that emancipation lies in a radical posture that pursues the exposition of contradictions between society and organizations (Spence, 2009). In contrast, Bebbington, Brown, Frame, and Thomson (2007, p. 356) suggest that a dialogic approach for SEA would contribute to a “more authentic engagement” for a sustainable world. As a poststructural intervention, this paper encourages both dialogic (Bebbington et al., 2007) and antagonistic (Boyce, 2000) positions to examine the implications of a capital agenda that seeks to redescribe sustainability and SEA as emerging economic growth for development purposes. There are limited Brazilian studies that adopt a critical lens and acknowledge the function of politics in the construction of meanings in the SEA academy. The resilience of literatures of sustainability, business, and decision-making favors the economic growth aims, as co-equivalent terms, obscures and dominates sustainability. In this tradition, Cintra and Carter (2012) debate the internalization of sustainable development into management accounting processes, and illustrate a lack of understanding and education as to what sustainability means and thus, this delimits the integration of sustainability into
Brazilian business. The main objective of this study is to understand the politics of SEA in the Brazilian literature, and consequently, it adopts the following approach. The following section briefly introduces constituent theoretical components, including hegemony. This is followed by a focus on the question “what is SEA literature in Brazil?” This section is followed by a critical examination of the role of Brazilian SEA research. This study aims to empower academics by introducing a range of approaches to SEA (Bebbington et al., 2007; Gray, Owen & Adams, 2009), as we argue that the interaction between societies and organizations is multi-faceted and complex. However, we argue that this multifaceted nature is obscured through the functioning of capitalist politics, which is employed in SEA to maintain hegemonic mechanisms of domination. To increase the debate of SEA research, this study contributes to the examination of SEA research in the Brazilian context (Gray & Bebbington, 2000), and we examine the role of politics in the construction of hegemonies in the Brazilian literature through the antagonism of emerging economies and the logic of development to SEA and sustainability.
A POLITICS OF HEGEMONY Before examining the impact of logics of development and economic growth on the construction of the Brazilian articulation of SEA, we present a short theoretical foundation of hegemony, and in particular, the radicalization of Gramscian hegemony. This draws on the work of Spence (2007, 2009) and a close reading of Laclau and Mouffe’s (2001) discourse theory. Laclau and Mouffe suggest that discourse is constructed within society and that discourse represents society. As Carter (2008, pp. 178–179) argues: Hegemony is the central concept in Gramsci’s work (1971, pp. 55–56), and for discourse theory, hegemony is democracy (Laclau, 2001, p. 7). It is ‘dialectic’ rather than ‘deterministic; as hegemony attempts to recognise the interdependence and the autonomy of hegemony, culture, and ideology (Fraser & Bartky, 1992, p. 175). Hegemony is ‘the discursive face of power’.
In explanation, Fraser and Bartky (1992, p. 179) argue that hegemony is: It is the power to establish the ‘common sense’ or ‘doxa’ of a society, the fund of self-evident descriptions of social reality that normally go without saying. This includes the power to establish authoritative definitions of social situations and social needs, the power to define the universe of legitimate disagreement, and the power to shape the political agenda.
Carter (2008, p. 180) then suggest the politics of hegemony, as it: …is a contingent process of readjustment and re-negotiation, as dominant groups attempt to accommodate counter-hegemonic concerns by amending the dominant hegemony. Thus, the constitution of hegemony is inherently flexible, capable of taking many forms and positions to counter threats. Gramsci notes that accommodation results in a more complete dominant hegemony in quashing threats posed by counter-hegemonic movements.
Laclau and Mouffe (2001) operationalize and radicalize Gramscian hegemony through antagonism, in that any attempt to fix a nodal point is permeated by “the other,” which posits a form of politics based on contingency or the lack. This is crucial to the politics of the SEA and sustainability, as each articulation is impacted by its “otherness”; in a simple way, the broader social and