Issues in Social and Environmental AccountingVol. 2, No. 1 June 2008Pp. 3-18 Social and Environmental Accounting and  Repo...
4                      R. Gray / Issues in Social and Environmental Accounting 1 (2008) 3-18customer and other stakeholder...
R. Gray / Issues in Social and Environmental Accounting 1 (2008) 3-17                      5much to my astonishment, has n...
6                  R. Gray / Issues in Social and Environmental Accounting 1 (2008) 3-18dertaking this work. These motivat...
R. Gray / Issues in Social and Environmental Accounting 1 (2008) 3-17           7To leave matters like this would be to   ...
8                  R. Gray / Issues in Social and Environmental Accounting 1 (2008) 3-18Equally, however, it is necessary ...
R. Gray / Issues in Social and Environmental Accounting 1 (2008) 3-17                       9trends in UK reporting to - w...
10                  R. Gray / Issues in Social and Environmental Accounting 1 (2008) 3-18emerging Institute for Social and...
R. Gray / Issues in Social and Environmental Accounting 1 (2008) 3-17         11prior work. Was the work (much of it      ...
12                 R. Gray / Issues in Social and Environmental Accounting 1 (2008) 3-18But for me, something much more im...
R. Gray / Issues in Social and Environmental Accounting 1 (2008) 3-17                     13ber of languages) plus intervi...
14                 R. Gray / Issues in Social and Environmental Accounting 1 (2008) 3-18have evidence of the ways in which...
R. Gray / Issues in Social and Environmental Accounting 1 (2008) 3-17                         15plete disregard for method...
16                 R. Gray / Issues in Social and Environmental Accounting 1 (2008) 3-18References                        ...
R. Gray / Issues in Social and Environmental Accounting 1 (2008) 3-17         17     (Spring), pp. 51-75.                 ...
18                R. Gray / Issues in Social and Environmental Accounting 1 (2008) 3-18      agenda for change?" Asia-Paci...
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  1. 1. Issues in Social and Environmental AccountingVol. 2, No. 1 June 2008Pp. 3-18 Social and Environmental Accounting and Reporting: From Ridicule to Revolution? From Hope to Hubris? - A Personal Review of the Field* 1 2 Rob Gray The School of Management University of St Andrews, UKAbstractThe objective of this essay is to provide a coherent overview of author’s research and scholar-ship over the last two decades or so. As such it is a compromise between a revisionist history,an auto-critique and a review essay. This compromise arises, primarily, for two reasons. First,the work I have undertaken in developing social accounting has often been ad hoc and prag-matic; it certainly has not followed a carefully crafted master plan or research design. Sec-ondly, the work is heavily context dependent. Issues such as personal history, changing atti-tudes in politics, business and the profession, the development of the author’s understandingsand, interaction with colleagues have all had major influence on the research. Some of the workmay only make sense when seen in those contexts.Keywords: Social and environmental accounting, social and environmental reporting, per-sonal review, sustainabilityINTRODUCTION is the area of study to which I have dedi- cated my scholarship. It is not easy toSocial accounting3 is not an organised, define - but a definition will help. Mywholly coherent area or activity. It is currently preferred definition is:wide-ranging, organic and disjointed. Attimes, it can be contradictory, confusing .. the preparation and publication of anand divergent. It can be either trivial or account about an organisations social,profound, conservative or radical. This environmental, employee, community,Rob Gray is Professor of Social and Environmental Accounting and Director of the Centre for Social and Environ-mental Accounting Research (CSEAR), School of Management, University of St. Andrews, UK, email:
  2. 2. 4 R. Gray / Issues in Social and Environmental Accounting 1 (2008) 3-18customer and other stakeholder interac- In essence, the history that lies behindtions and activities and, where, possible, this work is as follows. The 1970s saw athe consequences of those interactions fairly widespread interest in issues ofand activities. The social account may corporate social responsibility and thecontain financial information but is first substantive experiments with socialmore likely to be a combination of quan- accounting and auditing. Social account-tified non-financial information and de- ing made it as far as a legal requirementscriptive, non-quantified information. in France, (the bilan social), had tangi-The social account may serve a number ble influence on corporate disclosureof purposes but discharge of the organi- requirements in the UK and was seri-sations accountability to its stake- ously as a potential addition to companyholders must be the clearly dominant of law in the UK in the late 1970s. Al-those reasons and the basis upon which though pockets within the accountingthe social account is judged. profession were enthusiastic supporters(Gray, 2000) of social accounting, it never made it into the orthodoxy of either the profes-This essay is an attempt to provide a sion or of business practice. There arecoherent overview of my research and some obvious, though largely un-stated,scholarship over the last two decades or reasons for the non-adoption of socialso. As such it is a compromise between accounting (for example, it threateneda revisionist history, an auto-critique and capital with costs and with accountabil-a review essay. This compromise arises, ity). However, the principal stated rea-primarily, for two reasons. First, the sons for its status were that it was not awork I have undertaken in developing part of "accounting" and it was not co-social accounting has often been ad hoc herent - either theoretically or practi-and pragmatic; it certainly has not fol- cally. Both of which accusations werelowed a carefully crafted master plan or probably true at the time. 1979 and theresearch design. Secondly, the work is, election of Thatcher in the UK signalledinevitably I suppose, heavily context the end of any brief flirtation with con-dependent. Issues such as personal his- cerns like social accounting and untiltory, changing attitudes in politics, busi- they rode in on the coat tails of environ-ness and the profession, the development mental concern in the late 1980s, socialof my own understandings and, very accounting and auditing were the prov-importantly, interaction with colleagues ince of the dispossessed and dissatisfied.have all had major influence on the re- By 1990, however, everybody was sud-search. Some of the work may only denly "green" and the environmentalmake sense when seen in those contexts. agenda has steadily developed and, 2* This paper was previously published in Modelli di I should emphasise from the outset that this is, explic-Rendicontazione Etico-Sociale e Applicazioni Pratiche itly, a personal and self-reflective essay and is, as aVol.3 2005 (pp113-131) and permission for republica- consequence, far more self-referential that would nor-tion has been granted by Editors (G.Rusconi and M. mally be considered appropriate. Being personal, theDorigatti) through the author essay also has an explicitly UK orientation. I apologise1 This paper has been translated by Massimo Con- if either of these emphases offend anybody. 3trafatto and has appeared as "Il Social and Environ- I will not concern myself with nomenclature here.mental Accounting and Reporting: da speranza a sfida? Generally, I use "social accounting" as the generic termUnopinione personale sul tema" Modelli di Rendicon- to cover the whole area of social, environmental, sus-tazione Etico-Sociale e Applicazioni Pratiche (eds G. tainability, employee etc accounting, reporting andRusconi and M. Dorigatti) Vol.3 2005 (pp113-131) (see disclosureabove)
  3. 3. R. Gray / Issues in Social and Environmental Accounting 1 (2008) 3-17 5much to my astonishment, has not been with Reg Mathews, James Guthrie andwheeled off into obscurity again. The Lee Parker that provided the support toenvironment even finds mention in ac- take this social accounting seriously.counting standards and some areas of The turning point was the 1987 bookaccounting education. By the mid 1990s with Dave Owen and Keith Maunders -even social accounting was re-emerging Corporate Social Reporting. Not that- first in the non-profit sector and then, resistance disappeared at that point - or,belatedly, in the corporate sector. By the indeed, has disappeared since. Activeearly 21st Century, social and environ- hostility to environmental issues in ac-mental accounting are almost main- counting was present until 1990; activestream. The history now, it seems, will hostility to social accounting was pre-be a record of the struggle for the type, sent until the mid 1990s; and passiveubiquity and quality of such accounting hostility - or, at best, overwhelming in-and reporting rather than for its exis- difference - is still present in both thetence. profession and academe4. Social and environmental accounting has garnered,This "history" (and versions of it) have and continues to garner, considerablerepeatedly influenced my work. (See, hostility from critical theorists, feministsespecially, Gray, 2000; Gray and Beb- and post-modernists - and although thisbington, 2000; Owen, Gray and Beb- critique continues, it has helped generatebington, 1997; Gray, 2002a; Gray a more coherent theoretical basis for2002b;). Influenced by a combination of social accounting.Schumacher (1973); Goldsmith et al.,(1972), Dickson (1974) and the work of These experiences of resistance haveSocial Audit (Medawar, 1976) together encouraged a more self-reflective andwith an early exposure to Keith Maun- careful approach to both theoretical andders work plus three years training and empirical research in social accounting.studying with (now) KPMG and the In- This is not least because one interpreta-stitute of Chartered Accountants in Eng- tion of the resistance might be that theland and Wales, I was drawn into aca- issues and/or the subject of social ac-demic life by an advertisement for a lec- counting indeed, have no place in ac-turer in "social accounting" at a (then) counting and/or are a malign influencePolytechnic. There was, it transpired, on the public good. Such concerns havevery little literature on social accounting been addressed directly in a numberand attempts to undertake research in the of my papers (Gray, Owen and Adams,field (as part of my Masters degree) or to 1996; Gray, 1992; Gray, 2002a; Graymake it a personal specialism when ap- 2002b;) which are briefly consideredplying for posts at "traditional" universi- below.ties were met with resistance, scepticismand, indeed, hostility. That theme of From this preamble, it is possible tohostility to and scepticism about social identify some of my motivations in un-accounting - typically coupled with as- 4 These assertions have motivated - and are developedsertions that it was not a part of further in - educationally related research in which I"accounting" - is an abiding and forma- have been involved; see, for example, Gray, Bebbing-tive influence. It was only meeting up ton and McPhail, 1994; Gray, Collison, French, McPhail and Stevenson, 2001; and Collison, Gray,with David Owen and, subsequently, Owen, Sinclair and Stevenson, 2000.
  4. 4. 6 R. Gray / Issues in Social and Environmental Accounting 1 (2008) 3-18dertaking this work. These motivations The following section provides an over-have varied over the course of the study view of social and environmental ac-and are historically and pragmatically counting. It provides a brief definition,determined. The aims include: outlines its concerns and conceits and, in particular, explains the central role that I to deconstruct "accounting" and bet- have given to accountability in my work. ter understand its limitations, its al- Part II explores social accounting and its legiances and its influences - in development. Part III turns to the envi- practice and in education; ronmental and sustainability dimensions to articulate a view which formally of social accounting while IV attempts relates "accounting" and "social ac- to provide a reconciliation of the themes counting"; whilst offering a personal view on the to offer a reasonably rigorous view principal challenges for academic work of social accounting that expressed a in the field. There is a brief concluding coherent theoretical position that comment. could be related to social accounting practice, (i.e. a praxis which ac- cesses both the normative and posi- OVERVIEW tive dimensions of the area); to make social accounting This introduction to the subject area is "teachable" predicated on a useful conceit. That is, in to engage with colleagues not active the early stages of "social accounting" it in social accounting and entice them was assumed by many that this new into discussion of the subject and its "accounting" could be considered as a implications; subset of conventional "financial" ac- to engage with and help develop counting. On the contrary, however, it practice; proves useful to imagine that there is a to seek ways to keep a social and universe of all possible accountings of environmental agenda alive in ac- which conventional accounting is a very counting and business; minor subset. Conventional accounting to support and encourage new lec- refers to only those accountings which: turers and researchers in the field; relate to specific accounting entities; to seek to change company law re- describe only economic events; employ garding social and environmental only financial description; and assume a disclosure; limited set of "users" for the resultant to respond to institutional and indi- accounts - most typically and ubiqui- vidual initiatives that would foster tously, private sector owners of capital5. social and environmental account- Social accounting might be thought of as ing. that universe of all possible accountings and as the accounting one gets when theEach of these aims (in so far as one can artificial limits of conventional account-assess ones own motivations) is present, ing are a greater or lesser degree, in most ofmy papers. 5 See. also, Bebbington, Gray and Laughlin, 2001 and earlier editions through which these ideas were initiallyThis essay is now organised as follows. developed.
  5. 5. R. Gray / Issues in Social and Environmental Accounting 1 (2008) 3-17 7To leave matters like this would be to understood "accounting". Although theleave one with an impossibly large and literature on accountability was woefullyill-formed area of investigation. Conse- thin in accounting when I first startedquently, the conventional limitation of researching the area, the term (typically"entity" has been maintained - most of undefined and unexamined) was in verysocial accounting is concerned with ac- widespread use.counts about companies, in fact6. Andthe universe of possible accounts about This notion of acceptability was impor-and by organisations is anchored (or has tant in other ways. I wanted a conceptbeen anchored) - with varying degrees of that derived from notions that were ac-firmness - to the notion of accountabil- ceptable to those with whom I wouldity. speak - colleagues, students, accountants and business people. It had to be a con-Accountability has been key to the cept that not only avoided immediatewhole project. Accountability is a duty - rejection but was recognisable fromsometimes empirical (typically legal), many discourses - that is a place wheresometimes moral - and it arises from the the Marxist could talk to the liberal.responsibility that individuals and or- Most of those I encounter as an aca-ganisations have to provide "accounts" demic and researcher will, at least on theof their activities. The accountable entity surface, subscribe to "democracy" tois typically subject to two responsibili- some degree or other as a base accept-ties: the responsibility to act; and the able idea. A democracy (which is cer-responsibility to provide an account of tainly not a simple and singular notion)those actions, (these may be synony- can only run if the demos is informedmous). Accountability is an explicitly and if its rights are identifiable and re-normative (and ultimately moral) notion spected. Accountability turns out to be atied closely with responsibility and re- pre-requisite for a democracy. Thussponding - to differing degrees - to soci- could "accounting" in the broadest senseetys right to information. In this regard be argued to be principally motivated byit is a fundamentally democratic no- democratic ideals and to be an essentialtion. (See, for example, Gray, Owen component of a democratic society. Inand Adams, 1996). this way, "accounting" would be able to continue its professional claims of work-The reasons for the use of accountability ing in the public a central concept are complex. In thefirst place I needed a conceptual appara- From this perspective it becomes possi-tus in which both "conventional account- ble to ask questions about what sorts ofing" and "social accounting" were accountings are necessary, who has whatequally at home. Accountability pro- rights and whether or not conventionalvides a convenient normative framework accounting meets any democratic desid-for both. Equally, whatever was used erata. It turns out that conventional ac-had to be something that accountants counting is probably anti-democratic andwould recognise as related to how they that, to the extent that there is no formal social accounting, Britain - and much of6 It should be noted that there is, however, an increasing the so-called developed world - are notinterest in social accounting for other organisationssuch as non-profit and community-based enterprises. democratic.
  6. 6. 8 R. Gray / Issues in Social and Environmental Accounting 1 (2008) 3-18Equally, however, it is necessary to Second, different elements of social ac-demonstrate that the vast majority of all counting do, from time to time, gain asocial accounting - including environ- high level of attention and develop asmental reporting and so-called sustain- sub-subjects (as it were) with little or noability reporting - fails quite spectacu- consideration for the overall coherencelarly to discharge any reasonable sense of, what I am calling here, social ac-of accountability either, (see Gray counting. Employee, employment and2000). union issues experienced this attention in the 1970s and into the early 1980s.Thus in terms of the motivations out- Environmental issues - together withlined above, my work seeks to offer a sustainability - have experienced thissubstantive challenge to conventional attention since 1990. (This is examinedaccounting and expose new angles on below).that monolith that we so take forgranted. It relates "accounting" and One key theme in the work here has"social accounting" in a systematic way been the exploration of trends and pat-and provides an "acceptable" basis for terns in disclosure by UK companies.articulating, teaching and debating forms Gray, Kouhy and Lavers, (1995a;of accounting. 1995b) were a response to a number of factors. These factors included: the di- versity and inconsistency of studies ofSOCIAL ACCOUNTING AND RE- social reporting; lack of consistency inPORTING measurement methods; lack of formal theorising; the absence of longitudinalSocial accounting has generally been studies; and, most especially, the lack oftaken to comprise reporting about a spe- datasets for UK researchers.cific range of issues and/or reporting to a These papers laid out, carefully, howvariety of stakeholders. The topics/ semiotic meaning could be used consis-stakeholders are normally assumed to tently in content analysis (the principalcover: employee and employment is- means of measuring social disclosure)sues; environmental issues; customer and introduced the need for decisionand product issues; and community and rules and consistency. (These are matterswider social issues. There are (at least) very competently developed in Hackstontwo problems with this simple outline. and Milne, 1996; and Milne and Adler,First, there is no unique or even well- 1999). However, for reasons which re-argued reason why these four categories main unclear, social accounting re-of things should (a) dominate and/or (b) searchers still do not approach theirbe exclusive. Other matters such as hu- work with consistency in their descrip-man rights, working with repressive re- tion and measurement of social disclo-gimes, corporate governance and at- sure and, consequently, the comparabil-tempts to influence government and pol- ity of studies remains a restriction on theicy makers would all be seen as likely field..candidates for the attention of social ac-counting. But whether each would ap- However, the Gray et al (1995a, b) pa-pear and under which heading they pers do illustrate the value of longitudi-would be identified remains blurred. nal studies and they link the described
  7. 7. R. Gray / Issues in Social and Environmental Accounting 1 (2008) 3-17 9trends in UK reporting to - what has be- corporate characteristics. As with thecome - the standard range of theoretical Gray, Kouhy and Lavers, the principalexplanations for social reporting. These innovation in the paper lies in the use oftheories - stakeholder in its various a longitudinal data set. In doing so theforms; legitimacy theory and its vari- paper not only demonstrates one plausi-ants; what is called "political economy ble explanation for inconsistencies in thetheory" and its variants; plus the eco- results of prior studies but also pointsnomic theories like agency theory - are towards an exploitation of triangulationall massively under-specified and can across studies. That is, simple cross-only offer, at best, partial explanations sectional studies have failed to recogniseof social reporting behaviour. These lon- that changes in disclosure patterns needgitudinal studies in Gray, et al (1995a; not be annual events but could easily be,1995b)graphically illustrate (literally) as field work would suggest, periodicthe incompleteness of reporting in the events which only a longitudinal studyabsence of regulation, the changing fash- would capture. Furthermore, the study,ions in voluntary disclosure and the fail- in employing a wide team of researchersures of extant theory to fully explain or including a finance expert and a statisti-predict reporting changes. cian, tried to raise the standard of studies in this area - standards which have beenA side ambition in these papers was also patchy at establish a data set of social disclo-sures - backed up by a library of the re- The explicitly functional methodologyporting data (typically the annual re- of Gray et al (2001) and the positivisticports). This data set (the Centre for So- leanings of Gray et al, (1995a) contrastcial and Environmental Accounting Re- starkly, with the ethnomethodologysearch- CSEAR - database) has been which lies at the heart of Gray, Dey,used by a number of researchers and is Owen, Evans and Zadek, (1997) available for download (free) on theCSEAR website7. It has been used in a Gray et al, (1997) is an attempt - bothnumber of doctoral studies and is em- incomplete and not entirely successful -ployed to good effect in Gray, Javad, to articulate and guide the practice ofPower and Sinclair (2001). social accounting (which was becoming more widespread in the mid-1990s)Gray et al, (2001) shares two compo- within a coherent theoretical framework,nents with the above two papers. It ex- That is, the paper is reflexively deduc-ploits the uniqueness of the CSEAR da- tive and inductive - drawing from thetabase and it self-consciously seeks a experience of practice whilst trying toreplication of prior, predominantly US deduce key normative characteristics forand Australasian, studies in a UK con- "ideal" social accounts. It had two politi-text. In the present case, the replication cal aims. The first aim was to try and(and development) concerns the relation- offer a coherent framework (what ac-ship between disclosures and observable counting bodies have called a7 "conceptual framework") that the newly The access to the database was encouraged and sup-ported as part of a suite of studies covered by a 3 year 8 The issue of apparently conflicting methodologies isresearch grant from the Institute of Chartered Account- explicitly examined in Gray 2002 and will be touchedants of Scotland upon later in this essay.
  8. 8. 10 R. Gray / Issues in Social and Environmental Accounting 1 (2008) 3-18emerging Institute for Social and Ethical despair will be re-examined in the finalAccountability (ISEA) could use in de- section of this essay. The feelings deriveriving its standards for best practice. Its from a number of sources - one of whichsecond aim was derived from the first in is the academic community.that the hope was that it would be possi-ble to demonstrate that social accounting Much of the effort reported in these pa-standards could be genuinely derived pers had a sub-text of seeking to gainfrom theory -as opposed to pragmati- more co-operation - and, thereby, syn-cally justified in ad hoc ways. The paper ergy - between the limited number ofalso drew extensively from the personal academics working in the area of socialexperiences of four of the authors in de- accounting and to provide support forriving, development and proselytising them in this endeavour. CSEAR (Centresocial accounting at a small fair-trade for Social and Environmental Account-company called Traidcraft - the pioneers ing Research), and the CSEAR databasein the field of social accounting. are the most tangible manifestations of this attempt. This has, to a significantI believe that the paper remains the most degree, been a privilege as so many incomprehensive attempt to significantly the social accounting networks are im-relate theory and practice and it does mensely mutual and supportive. How-offer a perfectly practicable and theoreti- ever, the attempts have tended to fallcal basis upon which social accounting down when they have sought mutualcan be derived. However, in this, as in purpose with consultants, practice, regu-so much I do, I demonstrate ludicrous lators or non-social accounting academ-optimism and childlike naivete. ISEA, ics - especially in the US. On these occa-despite the brave and selfless efforts of sions seeking synergy, co-operation orsome, has not become the professional systematic development of theory andbody some of us hoped. The usual issues method has been frustratingly fruitless.of corporate funding, respectability and A paper by Sutton and Arnold (1998)the intellectual foundations and integrity demonstrates this most clearly. The pa-more typically associated with private per proposed a "new" approach tosector consultancy mean that ISEA acts "social accounting". It was used as aless to hold large organisations to ac- stimulus by the editors of Critical Per-count than, perhaps, it acts as a quasi- spectives on Accounting to hold a forumautonomous legitimation process for of responses to the suggestion. My re-corporate non-accountability. It has be- sponse (Gray, 1998) dwelt on the re-come - to a degree at least - captured, invention of wheels, the foolishness of(see, for example, Owen et al, 2000). It not considering prior work and the hu-is sometimes difficult to escape the idea bris of launching proposals without ana-that the last thing that many involved in lysing, justifying or grounding the pro-producing or regulating social account- want is any sort of process whichderives defensible and grounded stan- There is an important personal elementdards that might lead to more account- to this - which may or may not beability and transparency. unique to social accounting. Sutton and Arnold are not unique in social account-This growing cynicism, radicalism and ing in taking virtually no cognisance of
  9. 9. R. Gray / Issues in Social and Environmental Accounting 1 (2008) 3-17 11prior work. Was the work (much of it bates - certainly outside North own) ignored because it was of poor And yet my motivation to develop socialquality? ignored because it wasnt under- accounting arose from concerns forstood? ignored because it wasnt known community and environment - prettyabout?. All are exceptionally poor ex- much the sorts of concerns that UK andcuses for scholarship and do not encour- European Greens had emphasised, (andage one to feel optimistic about the no- to degree continue to emphasise). Thetions of scholarly communities. The early material cited above had seen envi-upshot is that arguments that one ronmental issues as a major componentthought were dead are re-hashed; causes of the social accounting agenda. Withthat one thought one had solved are re- the upsurge of interest in (and respect-invented; questions that one thought ability of) "environmental issues" fromwere identified as trivial are re- the late 1980s, "environmental account-investigated. And nowhere is there a ing and reporting" began to take on a lifesystematic argument to which I or col- of its own that was only loosely linkedleagues could respond. The work ap- (empirically or theoretically) to the ear-pears to be dismissed, ignored or over- lier work.looked. It is a strangely debilitatingsense - especially when, normally, those Although they were certainly not thein social accounting feel so very pas- first works on environmental issues andsionately about what they are doing - or, accounting (see, for example, Ullmann,at least, trying to do.9 1976; Dierkes and Preston, 1977), my monograph and book (Gray, 1990 andThe re-invention of wheels, the ignoring Gray et al, 1993) certainly opened theof prior work and the entirely unjustified issues up and set a number of hares run-claims of territory and/or originality are ning in both practice and academe. Theall significant issues in the development (often neophyte) environmental account-of environmental accounting agenda. ing scholar was faced with a panoply of developments in practice - in financial and management accounting as well asENVIRONMENTAL ACCOUNTING in reporting and auditing. The scholarAND REPORTING — TOWARDS would need to engage with, inter alia, aSUSTAINABILITY growing ethical investment movement and an increasing level of claims that theEnvironmental issues had, for no very environment was safe in the hands ofobvious reason, received relatively little business. Scholars would have to try toattention in the social accounting de- locate this within the framework(s) of social accounting research and theoris-9 A major positive experience has been the progres- ing whilst dealing with the emergingsively constructive debate as a result of the critiqueoffered by critical theorists of social accounting. This theoretical and practical exigencies ofhas been exceptionally productive. Unfortunately, such sustainability. It was unlikely thatdebate has not been offered by either the more man- "environmental accounting" - any moreagerialist of social accountants or, more particularly,those in conventional accounting and finance who, than social accounting before it - waspresumably, consider social accounting to be a major going to emerge as a coherent and or-irrelevance. It is difficult to respond to a lack of argu- ganised sphere of research, theory andment - especially when the global social and environ-mental data could not counsel complacency. practice.
  10. 10. 12 R. Gray / Issues in Social and Environmental Accounting 1 (2008) 3-18But for me, something much more im- cept of sustainability to the organisationportant happened in 1990. Up until that - typically a company - and articulatestime I had always felt defensive - having this application through accounting.10 Itto justify what I did, why I did it and to develops further the engaging, even ar-defend it from both left and right wing resting notion that most companies haveattack (most famously Tinker et al., not made profits for many years and1991). Suddenly, from being somebody have been paying dividends (income)who was tolerated (at best) I was some- out of natural (i.e. other peoples)one sought out and lionised - my 5 min- wealth, (i.e. capital). If one translatesutes in the sun had arrived. sustainability into the economists no- tions of capital one can, as Turner andAt first, it took some mental rearrange- Pearce demonstrate (Turner, 1987;ment to move from a modest defensive Pearce, 1991), subdivide this into natu-mode to an aggressive constructive ral, critical and man-made capital. Onemode but a number of my papers chart can then demonstrate fairly convincinglymy attempts to respond to the opportuni- that the maintenance of capital - one ofties offered by the ebullient green the very few fundamental concepts inagenda. accounting - is not being adhered to and, consequently, corporations are not sus-Gray (1992) was a very strange personal tainable and are not profitable. This pa-experience. This paper lays out the deep per provided a basic calculus that might(er) green ecological agenda and seeks be used to demonstrate this and con-to relate it to accounting. The first links cluded that - given the state of the globalbetween sustainability and accounting commons (i.e. the diminishing natural(of which I am aware) are outlined and capital) - the answer had to be thethe radical green agenda is linked di- "right" one.11rectly with pragmatism. That agenda isplaced in direct opposition to marxian Gray and Bebbington (2000) is a furtherand liberal traditions, (i.e. virtually all development of these ideas but in anprior accounting and finance research). empirical and expressly engaging con-This was enormously liberating. I was text. This paper contains the results of aable, for the first time, to express what I study commissioned by the United Na-believed about the world - and get it tions to investigate why and to what ex-published!. This was not what I had been tent large corporations understood envi-trying to do up until this point - I had ronmental accounting and sustainabilitybeen trying to compromise and seek rec- and what impediments there were toonciliation, reasonableness and fairness - adopting the idea and practices moretypically through accountability. From fully. The study employed a series ofthis point onwards my radical agenda administered questionnaires (in a num-has slowly begun to emerge from thecloset (of which more later). 10 It is this development of ideas that provide the start- ing point from which Jan Bebbingtons excellent workGray (1994) is a less radical piece at one in accounting and sustainability have developed. 11level but seeks to develop, from the My attempts to gain funding to examine these con- tentions were unsuccessful. However, CSEAR wasabove paper, a more subversive agenda. commissioned by the (then) SOAFD to advise on aIt applies the widely accepted (?) con- significantly funded project which examined these propositions in the agricultural sector.
  11. 11. R. Gray / Issues in Social and Environmental Accounting 1 (2008) 3-17 13ber of languages) plus interviews and stereotype and avoid taking initiatives inmini-case studies in 19 countries with this field. Indeed, accountants and thesome of the worlds largest companies12. accounting systems look much moreIt demonstrates empirically, what is, I likely to prevent environmental innova-increasingly believe, self-evident - tion than to aid it. The central argumentnamely that social justice and environ- (in this essentially managerialist piece -mental stewardship (sustainability in which supports the essentially manageri-other words) are anything but "safe in alist Accounting for the Environment) isthe hands of business". And yet this is that accountants are an essential compo-exactly what business - typically through nent of any organisations environmentalorgans such as WBCSD, ICC, WTO, response and, indeed, accounting can -Davos - does indeed claim. And these in principle at least - be a major innova-claims have influenced governments and tor with relatively little difficulty. Itpan-national bodies and persuaded them seems that some combination of thenot to legislate nor to exercise any form training, education, selection of account-of control over (particularly) MNC ac- ants and, perhaps, even the very naturetivity. This conclusion of self-delusion of accounting all conspire to prevent theor deliberate deceit in the face of in- fulfilment of such self-evident innova-creasingly desperate social and environ- tions13.mental disaster has forced me to developyet further, my increasingly radical ori- The second of these papers (Gray et al,entation. 1995c) was more consciously explora- tory and inductive and sought, princi-By contrast, however, two other earlier pally through interviews, to explore howpapers - Bebbington, Gray, Thomson environmental reporting comes to frui-and Walters (1994) and Gray, Bebbing- tion, how it is stimulated, who champi-ton, Walters and Thomson, (1995) - are ons it. The study employed Laughlinsmore conventional empirical investiga- (1991) model of organisational changetions within which the political agenda (and, indeed, owes a great deal to his(or, at least, the more radical intent of advice and support) to examine the envi-that agenda) is less overt. These two pa- ronmental agenda generally and environ-pers emerged from the field work which mental reporting in particular as agentswas undertaken to write the book Ac- of change. It finds, somewhat againstcounting for the Environment - Gray and prevailing views, that environmentalBebbington (1993). reporting is often the initiative of single individuals and that whilst reportingBebbington et al (1994) is mainly based opens up the world to the company, theon a postal questionnaire and explores champion of the reporting used the re-the extent to which accountants can help ports as a way of letting the outside intoto develop the environmental agenda the organisation and, thereby, strength-within organisations. It finds that ac- ening his or her position. There is thus acountants are more likely to follow their link with the material referenced in the earlier part of this essay in that here we12 This range of coverage was possible through the 13exploitation of the CSEAR networks and, particularly, These concerns are key to the work I have undertakenits network of country associates who supported, and at on educational issues in accounting. These are refer-times undertook, the research. enced in an earlier footnote.
  12. 12. 14 R. Gray / Issues in Social and Environmental Accounting 1 (2008) 3-18have evidence of the ways in which re- A properly applied form of social ac-porting can enable and, indeed, be a po- countability will, indeed, lead to sub-tential agent of change in the name of stantive change. Nevertheless, there isthe social and the environmental. more than enough evidence to show that social accounting more often than notThe papers I have cited here to represent ends up captured and it behoves re-my work on environmental accounting searchers to (i) acknowledge this and toand reporting illustrate some of the ten- (ii) constantly seek ways to disruptsions that I believe many must feel. The (apparent) consensus and work with thetensions between a kind of Foucauldian idea that hegemony is never complete.self-disciplining and the desire for self-expression; the need to only talk, write At its simplest, this is an argument forand lecture at a level which may engage pragmatism when one is faced with aones colleagues and students; the need drastic need for change but has little ac-to offer alternatives and demonstrate cess to obvious vehicles for change.their practicability whilst increasingly When faced with overwhelming inertiadespairing of a system (economic and what can one do?14 The second paper ineducational) within which nothing of this section, Gray, 2002a), explores thisaspirational value is possible. These con- more carefully. This paper is a reviewcerns are dealt with more explicitly in essay (commissioned by AOS for its 20ththe final section of this essay. anniversary) which tries to find a new "history" of social accounting. This his- tory seeks, as the title suggests, to con-LOOKING FOR THE FUTURE trast theoretical nicety with the pragma- tism of engagement coupled with theI have selected three publications for this inspiration of imagination. I suppose thepenultimate part of the essay which rep- audiences for this sermon are both socialresent, in my own mind at least, some- accountants (trying to encourage anthing of a taking-stock, the beginnings imaginative confidence) and conven-of a potential turning point perhaps. I tional accounting and finance academicswill briefly outline these papers and, in (trying to persuade them that questionsdoing so, touch upon a few matters of matter more than solutions).methodology that, traditionally at least,should feature in any respectable review This method - and, indeed, methodologi-of research. cal - rumination is explored further in the paper in British Accounting ReviewOwen et al, (1997) is a short essay (Gray, 2002b)). Looking back over awhich was led by David Owen and ad- (probably, fairly successful) social ac-dressed, more directly than we had in the counting project - a retrospective in-past, the central tension of political spired by the AOS paper - clarified thatjudgement which had been at the heart key issues of passion, context, praxis,of the critical theoretical attack on the pragmatism and engagement have runsocial accounting project. In essence, the through the whole project. Social ac-paper reviews the evidence that social counting largely demonstrates a com-accounting can change - and has 14changed - perceptions and relationships. Pacifism ruling out, in my case, the possibilities of revolution and/or terrorism.
  13. 13. R. Gray / Issues in Social and Environmental Accounting 1 (2008) 3-17 15plete disregard for methodological con- listen to most academic discussion, to sitcerns - if positivism provides useful in- in on most lectures and seminars, yousights then, fine. If an engagement can could be forgiven for believing thatbe most productively achieved using never has capitalism been so robust orethnography, then that is fine too. It is a the prospects for the joy and fulfilmentdawning realisation that matters of the- of mankind so positive. You would findory, elegance, methodology or even the yourself wondering just who perpetratesstrutting of intellectual testosterone are all this angst about the power of MNCs,matters of such triviality - are deserving the abdication of governments, the ratesof such utter scorn - when faced with the of species extinction, the growth in eco-facts of starvation, privation, degrada- logical footprints, the rate of childtion, injustice and so on. It all comes deaths through drought and so on15.back to what is it to be human? What isit to live the good life - or, rather, to Because that, at its heart, is what an es-work the good work? What is it to be a say such as this - as part of the socialscholar (despite the abuse of the current accounting project - is about. I remain,climate)? For social accountants, that as I have become better informed, nomeans that the research question is all - less able to savour my awesome level ofare you asking a question which bears comfort and privilege than I was whendirectly on matters of injustice, sustain- first I answered an advertisement toability or exploitation? If not - then why teach social accounting. I have morenot? Why should we waste our time in fellow travellers than I did, but in termssuch vain, intellectually prissy pursuits? of substantive impact on research, teach-If the question is sufficiently important - ing and practice the project has been athen the means of answering it is secon- failure.dary to the "cash value" of getting an And yet, as I glumly consider the bleakanswer that may - just may - contribute prospects I see for my children and myto the public good. Thus, do we arrive students I do have to recall that the last(by a different route and with a great time I wrote such a gloomy prognosisdeal less playfulness) at the same place (in the Introduction to Corporate Socialas Feyerabend and recognise the irrele- Reporting in 1986) within 5 years envi-vance of method. ronmental (and to an extent social) ac- counting and reporting had been trans- formed. So, it is optimism which keepsCONCLUDING COMMENT the project moving whilst it is the pessi- mism - or realism - that makes it so veryAnd, continuing the retrospective review necessary.- has the project been successful, met itsobjectives? Surprisingly enough, it hassucceeded in a number of the objectiveslisted in the Introduction. CSEAR, inparticular, has played a very positive and 15 Central to much of the foregoing and essential to thissurprisingly enabling role. Many of the point is that, despite 20 years of assiduous searching, I am yet to come across one substantive piece of workobjectives, however, remain relatively which argues - against the enormous volume of work onun-assailed. In particular, to read most social and ecological crisis - that capitalism is fine and the world is going to be wonderful. It all looks like self-accounting and finance publications, to delusion dressed up as optimism to me
  14. 14. 16 R. Gray / Issues in Social and Environmental Accounting 1 (2008) 3-18References Environmental Values, Vol. 3, No. 1, Spring (pp17-45)Bebbington, K.J., Gray, R.H. & Laugh- _________ (1998) "Imagination, A lin, C. (2001) Financial Account- Bowl of Petunias and Social Ac- ing: Practice and Principles 3rd counting", Critical Perspectives Edition. London: Thomson Learn- on Accounting, Vol. 9, No. 2 ing. (April), pp205-216.____________, _________, Thomson, _________ (2000) "Current develop- I. & Walters, D. (1994) ments and trends in social and "Accountants Attitudes and Envi- environmental auditing, reporting ronmentally Sensitive Account- and attestation: A review and ing", Accounting & Business Re- comment", International Journal search, No. 94 Spring, pp. 109- of Auditing, Vol. 4, No. 3 120 (November), pp. 247-268.Collison D.J., Gray, R.H., Owen, D.L., _________ (2002a) "The Social Ac- Sinclair & Stevenson, L. (2000) counting Project and Accounting "Social and environmental ac- Organizations and Society: Privi- counting and student choice: An leging Engagement, Imaginings, exploratory research note", Ac- New Accountings and Pragma- counting Forum, Vol. 24, No. 2 tism over Critique?", Accounting (June), pp170-186. Organizations and Society, Vol.Dickson D. (1974) Alternative technol- 27, No. 7 (October), pp. 687-707. ogy and the politics of technical _________ (2002b) "Of messiness, sys- change. Glasgow: Fontana. tems and sustainability: TowardsDierkes M. & Preston, L.E. (1977) a more social and environmental "Corporate Social Accounting and finance and accounting", British Reporting for the Physical Envi- Accounting Review, Vol. 34, No. ronment: A critical review and 4 (December), pp. 357-386. implemetation proposal", Ac- _________ & Bebbington, K.J. (2000) counting, Organizations and Soci- "Environmental accounting, man- ety, Vol. 2, No. 1, pp. 3-22. agerialism and sustainability: IsGoldsmith E. et al (1972) Blueprint for the planet safe in the hands of Survival. Harmondsworth: Pen- business and accounting?" (with guin. K.J.Bebbington), Advances in En-Gray R.H. (1990) The Greening of Ac- vironmental Accounting and Man- countancy: The profession after agement, Vol.1, pp. 1-44. Pearce, London: ACCA. _________ & ________ (2001) Ac-_________ (1992) "Accounting and En- counting for the Environment 2nd vironmentalism: An exploration Edition. London: Sage. of the challenge of gently ac- _________, _________ & McPhail, K. counting for accountability, trans- (1994) "Teaching Ethics and the parency and sustainability", Ac- Ethics of Accounting Teaching: counting Organisations and Soci- Educating for immorality and a ety, Vol.17, No.5, pp. 399-425. case for social and environmental_________ (1994) "Corporate Report- accounting education" Accounting ing for Sustainable Development", Education, Vol. 3, No. 1
  15. 15. R. Gray / Issues in Social and Environmental Accounting 1 (2008) 3-17 17 (Spring), pp. 51-75. Auditing and Accountability Jour-__________, __________, Walter, D. nal, Vol. 8, No. 2, pp. 78-101. (1993) Accounting for the Envi- _________, Javad, M., Power, D. & Sin- ronment: The greening of accoun- clair, D. (2001) "Social and Envi- tancy Part II. London: Paul ronmental Disclosure and Corpo- Chapman. rate Characteristics: A Research_________, _________, ________ & Note and Extension" (with) Jour- Thomson, I. (1995c) "The green- nal of Business Finance and Ac- ing of enterprise: An exploration counting, Vol. 28, No. 3/4 (April/ of the (non) role environmental May), pp. 327-356. accounting and environmental ________, Owen, D.L. & Maunders, accountants in organisational K.T. (1987) Corporate Social Re- change" Critical Perspectives on porting: Accounting and account- Accounting, Vol. 6, No. 3 (June), ability. Hemel Hempstead: Pren- pp. 211-239. tice Hall._________ & Collison, D.J. with ________, _________ & Adams, C. French, J., McPhail, K. & Steven- (1996) Accounting and Account- son, L. (2001) The professional ability: Social and environmental accountancy bodies and the provi- accounting in a changing world. sion of education and training in Hemel Hempstead: Prentice Hall relation to environmental issues. International. Edinburgh: ICAS. Hackston D. & Milne, M. (1996) "Some_________, Dey, C., Owen, D., Evans, determinants of social and envi- R. & Zadek, S. (1997) "Struggling ronmental disclosures in New with the praxis of social account- Zealand", Accounting Auditing ing: Stakeholders, accountability, and Accountability Journal, Vol. audits and procedures" (with) Ac- 9, No. 1, pp. 77-108. counting, Auditing and Account- Laughlin R.C. (1991) "Environmental ability Journal, Vol. 10, No. 3, Disturbances and Organisational pp. 325-364. Transitions and Transformations:_________, Kouhy, R. & Lavers, S. Some Alternative Models", Or- (1995a) "Corporate Social and ganisation Studies, Vol. 12, No. 2, Environmental Reporting: A Re- pp. 209-232. view of the Literature and a longi- Medawar C. (1976) "The social audit: a tudinal study of UK Disclo- political view", Accounting, Or- sure" (with R.Kouhy and ganizations and Society, Vol. 1, S.Lavers) Accounting, Auditing No. 4, pp. 389-394. and Accountability Journal, Vol. Milne, M.J., & Adler, R.W., (1999) 8, No. 2, pp. 47-77. "Exploring the reliability of social_________, _______ & _______ and environmental disclosures (1995b) "Methodological Themes: content analysis", Accounting, Constructing a Research Database Auditing and Accountability Jour- of Social and Environmental Re- nal, Vol. 12, No. 2, pp. 237-256. porting by UK Companies: A Owen, D.L., Gray, R.H., & Bebbington, methodological note" (with R. K.J. (1997) "Green Accounting: Kouhy and S.Lavers), Accounting, Cosmetic irrelevance or radical
  16. 16. 18 R. Gray / Issues in Social and Environmental Accounting 1 (2008) 3-18 agenda for change?" Asia-Pacific Tinker A.M., Lehman, C. & Neimark, Journal of Accounting, Vol. 4, M. (1991) "Corporate Social Re- No. 2 (December), pp. 175-198. porting: Falling down the hole in________, Swift, T., Bowerman, M. & the middle of the road", Account- Humphreys, C. (2000) "The new ing, Auditing & Accountability social audits: Accountability, Journal, Vol. 4, No. 1, pp28-54. managerial capture or the agenda Turner R.K. (1987) "Sustainable global of social champions?", European futures: common interest, interde- Accounting Review, Vol. 9, No. 1, pendence, complexity and global pp. 81-98. possibilities", Futures, Vol. 10,Pearce D. (ed) (1991) Blueprint 2: pp. 574-582. Greening the World Economy. Ullmann A.E. (1976) "The corporate London: Earthscan. environmental accounting system:Sutton T. & Arnold, V.(1998) "Toward a a management tool for fighting framework for a corporate single environmental degradation", Ac- audit: Meeting financial statement counting, Organizations and Soci- users needs", Critical Perspec- ety, Vol. 1, No. 1, pp. 71-79. tives on Accounting, Vol. 9, No. 2
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