Issues in Social and Environmental AccountingVol. 1, No. 2 December 2007Pp. 169-198    Taking a Long View on What We Now K...
170                       R. Gray / Issues in Social and Environmental Accounting 2 (2007) 169-198surrounding business and...
R. Gray / Issues in Social and Environmental Accounting 2 (2007) 169-198      171Previous reviews (Gray et al., 1996;     ...
172                        R. Gray / Issues in Social and Environmental Accounting 2 (2007) 169-198accounting research. Se...
R. Gray / Issues in Social and Environmental Accounting 2 (2007) 169-198      173either accurate or useful is relatively  ...
174                       R. Gray / Issues in Social and Environmental Accounting 2 (2007) 169-198Colleagues who are so mo...
R. Gray / Issues in Social and Environmental Accounting 2 (2007) 169-198      175substantive sense (see the following sec-...
176                        R. Gray / Issues in Social and Environmental Accounting 2 (2007) 169-198accountants is often lo...
R. Gray / Issues in Social and Environmental Accounting 2 (2007) 169-198                   177limits13 and that such minor...
178                        R. Gray / Issues in Social and Environmental Accounting 2 (2007) 169-198both encouraged by corp...
R. Gray / Issues in Social and Environmental Accounting 2 (2007) 169-198                    179deliver utopia, is a cause ...
180                       R. Gray / Issues in Social and Environmental Accounting 2 (2007) 169-198tant that this continues...
R. Gray / Issues in Social and Environmental Accounting 2 (2007) 169-198      181nations. We have seen, first, the growth ...
182                    R. Gray / Issues in Social and Environmental Accounting 2 (2007) 169-198(a) social and/or environme...
R. Gray / Issues in Social and Environmental Accounting 2 (2007) 169-198       183Social/Environmental Disclosure and     ...
184                R. Gray / Issues in Social and Environmental Accounting 2 (2007) 169-198The first option might occur be...
R. Gray / Issues in Social and Environmental Accounting 2 (2007) 169-198         185information. The need for further fiel...
186                      R. Gray / Issues in Social and Environmental Accounting 2 (2007) 169-198Equally, there seems to b...
R. Gray / Issues in Social and Environmental Accounting 2 (2007) 169-198               187Conclusions                     ...
188               R. Gray / Issues in Social and Environmental Accounting 2 (2007) 169-198tion is woeful and only through ...
R. Gray / Issues in Social and Environmental Accounting 2 (2007) 169-198     189       pp. 1-23.                          ...
11.pp.0169www.iiste.org call for paper-198
11.pp.0169www.iiste.org call for paper-198
11.pp.0169www.iiste.org call for paper-198
11.pp.0169www.iiste.org call for paper-198
11.pp.0169www.iiste.org call for paper-198
11.pp.0169www.iiste.org call for paper-198
11.pp.0169www.iiste.org call for paper-198
11.pp.0169www.iiste.org call for paper-198
11.pp.0169www.iiste.org call for paper-198
11.pp.0169www.iiste.org call for paper-198
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11.pp.0169www.iiste.org call for paper-198

  1. 1. Issues in Social and Environmental AccountingVol. 1, No. 2 December 2007Pp. 169-198 Taking a Long View on What We Now Know About Social and Environmental Accountability and Reporting1*) Rob Gray The School of Management University of St Andrews, UKAbstractSustainability and social responsibility appear to be occupying a place of increasing importancein the discourse surrounding business and organisation. As this discourse gains acceptance or-ganisations seek for ways to measure and manage their interactions in the field. Simultane-ously, societal concerns for the way in which organisations represent themselves with respect tosocial responsibility and sustainability stimulate a need for wider accountability. This essayjoins a steadily growing trickle of papers which attempt to articulate and make sense of socialaccounting, accountability and reporting and, in so doing, offer suggestions for future direc-tions in research, teaching and/or practice. The primary purpose of this paper is to offer a viewof developments in social accounting in the last decade or so and to emphasise something I fearwe are in danger of losing – namely that sense of the importance of social accounting and theconsiderable critical potential of the social accounting project. The paper provides a brief intro-duction to the growth in the social accounting literature; a typology of research approaches tothe area; and a polemic on the crucial potential importance of social accounting. With thisbackground, the essay then takes a broad review of the social accounting literature and seeks tooffer some contentious perceptions on that research in the hope of stimulating debate.Keywords: Social accounting, CSEAR, environmental accounting, social and environmentalaccountability and reporting, social and environmental performance, social and environmentaldisclosure1 Introduction I am delighted to acknowledge the help of David Owenwho initially commissioned an early version of thispaper for the ICCSR Conference in Nottingham 2004. Sustainability and social responsibilityEarlier drafts of the paper has benefited from (and I am appear to be occupying a place of in-pleased to acknowledge) the helpful comments from: theparticipants at the ICCSR Conference; attendees at a creasing importance in the discourseRob 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: rhg1@st-andrews.ac.uk
  2. 2. 170 R. Gray / Issues in Social and Environmental Accounting 2 (2007) 169-198surrounding business and organisation. and related research into social, environ-As this discourse gains acceptance or- mental and sustainability reporting andganisations seek for ways to measure accountability. The hope is that, thereby,and manage their interactions in the it may provide a means for researchersfield. Simultaneously, societal concerns (and practitioners and teachers) infor the way in which organisations rep- (particularly) management and organisa-resent themselves with respect to social tion studies to draw from -and interactresponsibility and sustainability stimu- with -the accounting literature in thislate a need for wider accountability. Ac- field. Accountants have freely pillagedcounting research has long been inter- the management, organisational andested in both of these concerns. Interact- wider literature and we would like toing actively with organisational and encourage others to return the favour.management research whilst drawingfreely (even indiscriminately) from any Accounting researchers, once they breakdiscipline that offered (instrumental) out of their well-established tendency tostimulus, insight and conceptualisation, follow rules and adhere to the specifi-accounting research has sought to derive cally financial (see, for example, Gray etand evaluate both managerial metrics al., 2001), tend to bring a broadly sys-and new forms of organisational ac- tems-based view of the world to bear oncountability. (Such metrics and account- the representational and communicativeabilities might or might not be finan- possibilities of (typically) formal infor-cially based). Of the two, it is with the mation transmissions in (especially busi-derivation and evaluation of social, en- ness) organisations’ interactions withvironmental (and increasingly sustain- society and its physical environment.ability – sic) accountability that this pa- “Accounts”, of whatever form, representper is primarily concerned2. and construct organisations and are used by various individuals and groups toThis paper has a number of motivations. “do” things. These accounts thereby pro-At the very broadest level, the paper foundly affect employees, communities,represents an attempt to synthesise the societies, planetary possibilities, thelast three to four decades of accounting State and civil society itself. These ac- counts are the stock-in-trade of account-CEU open lecture in Budapest 2005 and especially thecomments of Keith Maunders; and delegates at the first ing researchers and, of these, social, en-CSEAR Conference in Leiria, Portugal, 2005. The vironmental, social responsibility andencouragement and detailed suggestions of Kate sustainability “accounts” are potentiallyKearins on earlier drafts of this paper have been espe-cially helpful the most important of these manifesta-*) This paper was previously published in E-Journal tions of the accounting craft3.of Radical Organisation Theory 9(1) December 2005(pp1-31) and permission for republication has beengranted by Editor-in Chief of the E-journal (Prof. Gil-son). 32 I should stress that social, environmental, social re- I will return to explain the emphasis on external report- sponsibility, “triple bottom line” and sustainability areing further later. There is a considerable amount to say certainly not equivalent notions. The interactionsalso about environmental management and environ- amongst them and how we might understand eachmental management accounting but that is largely be- within a broad agenda of pursuing un-sustainability isyond scope of this short paper – not least because I am beyond our scope here – but see, for example, Gray andprimarily interested in radical potential here and I am Milne (2002; 2004). At its simplest within the bounds ofyet to be persuaded that there is (as yet) a substantive this paper, we will see (very poor) examples of report-radical potential in environmental management account-ing.
  3. 3. R. Gray / Issues in Social and Environmental Accounting 2 (2007) 169-198 171Previous reviews (Gray et al., 1996; ture that are directly motivated by (forGray 2000; 2002) have considered this example) the state of the planet and sub-terrain and have, inter alia, examined the limely indifferent to what managers andterminological confusions that can un- organisations and/or the managementdermine the field (see, for example, and organisational literature is generallyMathews, 1997). I shall seek to avoid exercised by. Second, as I will explainissues of terminology by using the term later, social accounting is not an issue of“social accounting” as the generic term vague academic interest. It is a passionfor the whole panoply of internal and that I, along with others, have chosen toexternal accounts of organisational so- follow. I, and others, have consciouslycial, environmental and sustainability decided that one would make one’s bestinteractions and then address particular contribution to a society that has so gen-elements of these as the situations war- erously bestowed its bounty upon usrants and I will use the acronym SEAR lucky ones through engagement with(social and environmental accountability social accounting. Whether that is aand reporting) in the same way4. foolish and delusional choice is too diffi- cult to decide these days but faced withIn addition, this review will seek to de- working in social accounting or helpingpart from prior reviews in two particular run soup kitchens I personally choseways. First, in seeking to provide an social accounting. Consequently, for thatoverview of SEAR, I will outline the decision to mean anything, the work inprincipal conclusions that I believe we SEAR must forcefully address real prob-have reached and the key issues that de- lems grounded in the real experiences ofmand our attention as researchers and the disadvantaged, the oppressed and theteachers in the coming years. In doing wider ecological environment. It mustthis, I will try and illustrate how impor- also be afraid of -and seek to debunk -tant it is to retain an eye on the essence the way in which social accounting canof the research questions we ask and so easily become (or maybe already is) aavoid substituting “practical” and pub- placebo for the ills of late industrial andlishable” for “important”. The key financial capitalism. Finally, SEAR mustmeans of achieving this will be to stay also seek to try and understand and mod-closely in touch with actions and litera- ify, ameliorate or destroy that system which (as the books say) makes good people do bad things – i.e. internationaling upon “sustainability” as one (albeit potentially the financial capitalism. Such a motivationmost important) of the foci of social and environmentalaccountability and reporting. may represent a precious, delusional and4 One broad definition of social accounting might be: the massively over-ambitious approach topreparation and publication of an account about an the trivial act of being an academic butorganisations social, environmental, employee, commu-nity, customer and other stakeholder interactions and without unrealistic idealism, little oractivities and, where, possible, the consequences of nothing interesting will happen.those interactions and activities. The social accountmay contain financial information but is more likely tobe a combination of quantified non-financial informa- The paper is organised as follows. Thetion and descriptive, non-quantified information. The next section provides a very brief back-social account may serve a number of purposes butdischarge of the organisations accountability to its ground to the social accounting literaturestakeholders must be the clearly dominant of those in recent years and indicates some of thereasons and the basis upon which the social account is major sources of the growth of socialjudged (Gray 2000).
  4. 4. 172 R. Gray / Issues in Social and Environmental Accounting 2 (2007) 169-198accounting research. Section three offers tent of such growth is difficult to assessa tentative typology of research ap- because interest in social accountingproaches to social accounting with a par- does span a very wide range of discipli-ticular emphasis on the need to keep an nary interests and it is, therefore, possi-eye on the bigger picture and a need to ble to miss work in the field. The litera-explicitly address the radical potential of ture I will be drawing from here is, in-the area. Section four undertakes a po- evitably, dominated by the accountinglemic on why social accounting – a fun- literature but also picks up from, for ex-damentally trivial and manipulated ac- ample, management, organisationaltivity – might be important. Indeed, this studies, business governance and ethics,section argues for the critical importance ecology and philosophy5.of the social accounting project and be-moans that too often this is lost sight of. In the accounting literature, the “socialSection five then offers one, explicitly accounting project” of the last 20 yearspartial and selective, personal view of or so has been predominantly built upthemes in recent social accounting re- within three (relatively) mainstreamsearch and offers some (I hope) conten- journals: Accounting, Auditing and Ac-tious and unexpected interpretations of countability Journal, Accounting Forum,the findings from this work. Section six and Critical Perspectives on Accounting.offers a brief summary and conclusion. Whilst significant contributions also ap- pear in a large number of other journals (including, for example, AccountingThe Growth and Sources of SEAR Organizations and Society, AccountingResearch and Business Research, Journal of Busi- ness Finance and Accounting and TheThere is every indication that there has Accounting Review), it is in these threebeen a significant growth of research journals that the principal conversationsinto SEAR in recent years. The full ex- are held. Outside the accounting litera-5 ture, the literature (that I am familiar CSEAR produces a journal, The Social and Environ-mental Accounting Journal (SEAJ) and has done so for with) seems to be dominated by Journalover 12 years. In that time it has carried 306 reviews of of Business Ethics and Business Strat-academic articles that I (as editor of SEAJ) have no-ticed and thought apposite to a social and environ- egy and the Environment. Similarly, im-mental accounting research journal. We carried just 8 portant contributions appear in main-such articles reviews in total for the two issues pro- stream journals such the Journal of Man-duced in 1992, whilst the number of articles reviewspeaked at 36 in each of 2000 and 2001 and has pottered agement Studies and notable contribu-along at about 20 per volume since. Whilst this inevita- tions such as the review by Richardsonbly owes something to my stamina and those journals et al., (1999) in International Journal ofthat I monitor, it does give some indication of thegrowth in research publication in the field. These re- Management Reviews6. However, out-views involve 306 articles which is clearly only a small side the accounting literature account-part of the “literature” which we (whether accountants,finance specialist, management researchers, geogra- ants have found it difficult to identifyphers or whatever) might use when we construct our substantive and continuing academicview of our subject. The CSEAR website carries a conversations around social accountingbibliography, for example, which comprises nearly2000 references, the majority of which are articles and and accountability within mainstreamthe majority of wh ich relate to social and environ- journals.mental accounting in some way or other.6 Which paper can also be commended for anotherperspective on the field. Whether or not these observations are
  5. 5. R. Gray / Issues in Social and Environmental Accounting 2 (2007) 169-198 173either accurate or useful is relatively and researching social accounting is notunimportant in the face of a far more even in the same spectrum of motiva-significant concern. That is, for the bulk tions and drivers as more conventionalof academic endeavour throughout the and mainstream academic activity butsocial sciences the state of the planet, the this distinction seems to be rarely recog-position of its species (including man- nised.kind) and any deep-rooted anxiety aboutthe nature of modern economic organi-sation seem to be matters of sublime Approaches to Social Accountingirrelevance. This abandonment of agrounding of academic endeavour in the The motivations and predispositions thatpressing crises of the moment encour- lie behind academic choices of subjectages social accounting finding company (and approaches to those subjects) forthroughout academe with, for example, research and teaching are certainly com-those exercised by: critical theory; plex (Choudhury, 1987; Mitroff & Kil-analyses of modern politics; and sustain- mann, 1978). However, it does seemable development; and it is from these possible to identify a range of researchareas in particular that social accounting and teaching endeavours whose (at leastincreasingly draws its insights and theo- apparent) drivers are quite different fromretical structures and where it looks for those which (apparently) operate closeraffirmation and recognition (see, for ex- to the mainstream. That is, across (say)ample, Birkin, 1996; Milne, 1996; Lam- management, organisational studies andberton, 1998; Andrew, 2000). Increas- accounting there are areas of academicingly, social accountants hope to find endeavour whose well-spring does notthemselves in an emergent formally in- derive from management, organisationalterdisciplinary space formed around no- studies and accounting – the disciplinarytions of accountability and the conflicts focus is simply the means through whichwith sustainability. the endeavour is undertaken rather than the source and frame of the endeavourMy aim here is to try to tease out some itself. More exactly, for (possibly) a mi-key themes in the literature, to try and nority of academics, I suspect, issuesaffirm the current collaboration across such as feminism, critical theory, labour(especially) accounting, management studies, ethics and such like are sourcesand organisational studies researchers of passion whose importance lies in aand to, most particularly, offer a few world view outside conventional busi-assertions and suggestions for how we ness and academe. They are issuesmight frame our future research work. placed at the heart of the scholar’sConsequently, the next section attempts world. There is a passion which tran-to articulate a difficulty that many social scends mere employment (and the cate-accountants have faced – the difficulty gories of such employment) and whichof trying to communicate that what they seeks to repair, correct, destroy (or what-do -and why they do it -is not just ever) a world in which, for example,“different” from (say) refining econo- masculism, poverty, injustice, overt ex-metric method or devising new meta- ploitation, delusion and so on are bothphors of organisation (however worthy rife and subject of institutionalised rev-such endeavours might be). Studying erence both within and without academe.
  6. 6. 174 R. Gray / Issues in Social and Environmental Accounting 2 (2007) 169-198Colleagues who are so motivated seek to tional. Furthermore, to the extent that theconstruct, or in some way contribute to, academic activity is instrumental (asa world where such matters might be much business, management and ac-eradicated – or at least exposed and their counting activity is) it is instrumental ineffects ameliorated. Indeed, the issue of the interests of (some, perhaps unde-concern – whether it be, for example, fined) utopian aspiration rather than in-planetary desecration or the aesthetic of strumental in the interests of career,the economic – exists and motivates re- business or capitalism more widely7.gardless of the business school and itscurriculum. That curriculum itself and SEAR is of this sort for many research-the associated research can then be rec- ers and teachers: in essence it is an op-ognised as either one cause of the con- portunity to express personal valuescern and/or one (possible) mechanism through an academic subject and tothrough which the concern can be ad- bring to bear expertise on the issue ofdressed. The academic activity is thus concern. By contrast, it is difficult to seenot only an intellectual activity but is, to that, for example: the saving of costs;various degrees, also spiritual and emo- encouraging a wider consumption of aFigure 1: A Simple Typology of Approaches to SEAR Research and Teaching1. Ignore it entirely.2. Recognise its (slight) potential for economic impact, legitimation or moral haz- ard.3. Employ it as a management tool to manage stakeholders and demonstrate the beneficence of the corporation.4. Develop it as a manifestation of accountability in a well-functioning democ- racy.5. Recognise its potential as a demonstration of the limits of corporate discretion and of the extent of conflicts between economic, social, environmental and sus- tainability pursuits.6. Use it as a means to explore new possibilities, new futures and their limitations.7. Dismiss it as a self-delusional sticking plaster on the rotting hide of capitalism.largely irrelevant product; deriving an could be thought of as this sort of inte-increased financial return for already gration of (a) personal values and (b)very rich people; or the establishing of how one makes one living8.how more reliable statements might bemade by auditors to the shareholder; If SEAR actually does matter in any7 Of importance is that such aspiration is not only to be curiosity to any great degree, might be thought to un-associated with left wing, “radical” or “green” activism. derlie the mainstream of conventional, positivist, rightThere is a case – sadly not much articulated – in which wing business, management and accounting teachingliberty and freedom (including freedom from poverty (see, for example, Friedman 1962; 1970; Hayek 1960;and the oppression of nature, for example) are the essen- 1982; Benston, 1982a; 1982b).tial aspirations of academic pursuit. In such a view, the 8 Of course this does not in any way gainsay the voca-growth and liberalisation of capitalism are perceived as tion of teaching and the expression of that vocation. Itthe primary means through which this might be concerns what one chooses to teach and how one articu-achieved. Such right wing idealism, although not one lates and frames that teaching.which engages either my sympathy or my intellectual
  7. 7. R. Gray / Issues in Social and Environmental Accounting 2 (2007) 169-198 175substantive sense (see the following sec- The reason for making these points –tion), then how one approaches its study and, indeed, the distinctions above -isand practice; the questions that one that research, teaching and practiceseeks to illuminate through its pursuit; never entirely abandon their normativeand the priority one gives to the ques- groundings. When we come to examinetions of concern over the way in which the findings about SEAR over the lastone seeks to answer those questions few decades we will find that, on the(methods, methodology and research whole, the liberal, managerialist anddesign) become important. A simple Marxian articulations (categories 1, 2, 3,typology of approaches to social ac- and 7 in Figure 1) are sound descriptionscounting is, therefore, shown below9. of social accounting as practiced. Is this a matter of remark? That depends on theTwo remarks are worth making immedi- normative moment of the observation.ately. First, we should not lose sight of Central to that is the notion that SEAR isthe fact that for the vast majority of intended for a purpose and, indeed, if itteachers, students, researchers and prac- is only a marginally interesting eco-titioners in accounting, management and nomic adjunct to the management tool-organisational studies, SEAR is a matter kit, it is of virtually no importance andof sublime irrelevance. They know little barely deserves the attention it is receiv-about it and care even less10. Second, as ing. What makes SEAR worth the atten-issues like stakeholder management, tion is the potential of the activity, thecorporate social responsibility and sus- questions that are asked and the answerstainable development have started to that are exposed when one investigatescreep towards the mainstream of busi- the practice with an explicitly (as op-ness and business practice (at least in posed to implicitly) normative frame-name if not in detail), we need to be con- work.scious that they are being absorbed andcaptured. The considerable revolutionary This is what I seek to explore in the next(or even evolutionary) moment that so- section.cial responsibility and sustainability mayhave is being sucked from them as theyare appropriated as “management tools” Why Social Accounting Really Mat-and such like (see, for example, Gray & ters (Or Might Matter)Milne, 2002; 2004). I suppose that most researchers tend to9 take for granted the importance of what These categories are speculative and intended only tobe illustrative. Neither are the categories necessarily they do. In remaining unexamined, how-mutually exclusive. Most notably the critical theoretic ever, the basis of the assumption of im-view (category 7) is concerned by the (often delu-sional) beliefs of the preceding 5 categories. portance looks flimsy. Despite the pres- sure from the mainstream, social ac-10 I can make such an assertion based on inference from countants also tend to take the impor-observing the literature, courses, textbooks and prac-tices in and of accounting, management and business tance of their subject for granted. Conse-and recognising that the vast majority do not even nod quently, the opportunity, to proselytisein the direction of issues like justice or sustainability. the subject and, more precisely, to chal-In accounting in the UK, the British Accounting Re-search Register (Helliar et al, 2002; 2004) would offer lenge the widespread indifference to so-a parochial but convincing source of evidence for this cial accounting exhibited by non-socialassertion (see also Owen et al, 1994; Stevenson, 2002).
  8. 8. 176 R. Gray / Issues in Social and Environmental Accounting 2 (2007) 169-198accountants is often lost. The importance 2002 for further exploration of this point– or at least potential importance – of within an SEAR context (more generallySEAR is typically not recognised. It see, for example, Held, 1987; Macpher-therefore makes sense to restate some of son, 1973; 1977).11the tenets that make a (currently) largelytrite and trivial practice like SEAR so For convenience (although there are(potentially) important. theoretical problems with this) it is nor- mal to think of rights, responsibilitiesAt the heart of SEAR – or at least at the and accountability as arising in threeheart of the emphasis I am pursuing here dimensions around organisations: the-is the notion of holding organisations to economic, the social (including employ-account on the principal of accountabil- ment) and environmental12. Whilst theity. Accountability is based on the prin- financial statements produced by organi-cipal of rights to information – rights sations are designed to discharge ele-that derive from a number of sources: ments of the financial or economic ac-legal, quasi-legal, moral and so on. The countability of the organisation (and are,principal idea is that power and respon- most notably, governed by both law andsibility need to be matched in a fair soci- an institutional edifice of regulation andety. This matching is ensured by the monitoring), it falls to the more recentdemos who, in turn, require information (and notably unregulated) social, envi-on which to make the appropriate judge- ronmental and sustainability reports toments. The accounts of organisations are discharge the rest of an organisation’sone of these sources of information and accountability. It will come as no sur-without these accounts, democracy is prise – and will not significantly under-hollow, the demos is powerless and, de- mine our examination of research evi-pending on the circumstances, the power dence later – to confirm that the currentof the (non) accountable organisations practice of social, environmental andsignificantly outstrips their responsibil- sustainability accountability is excep-ity. These accounts are, thus, absolutely tionally patchy, very poor in quality andand definitionally central to what it is to fails, almost entirely, to meet any meas-have a just democracy (see, for example, ure of accountability (see, for example,Gray et al., 1996; Lehman, 1999; 2001; Tinker et al, 1991; Owen et al., 2000).11 I realise that these terms are offered as encompassing So if, (as we shall see below), currentsimple and uncontentious meanings whilst these asser- practices of social, environmental andtions are offered as uncontentious truths. These areprofoundly complex notions that would take us beyond sustainability reporting fail to dischargethe confines of any reasonable paper here. Neverthe- accountability then what do these cur-less, I hope that the broad brush of these comments canbe allowed to stand without harming the argument too rent practices actually achieve? And,seriously. more substantially, what might they12 Such tri-partite distinctions arose primarily as a result achieve if they were established to fullyof the growth in environmental concerns in the 1990s.Before this, “social accounting” was used to represent discharge accountability? It is here thatall those accountings that were not economic or finan- the importance of social accounting lies.cial in focus and nature. The idea behind the “Trip leBottom Line” (Elkington, 1997) can thus be seen andthe links between that idea and sustainability/ That only a minority of companies un-sustainable development are also apparent – although dertake social, environmental and/ornot without difficulties (see again Gray and Milne,2002; 2004). sustainability reporting beyond legal
  9. 9. R. Gray / Issues in Social and Environmental Accounting 2 (2007) 169-198 177limits13 and that such minority reporting 1996; Willums, 1998).is almost universally partial and basedon relatively unimportant material or It almost certainly follows that if fullmaterial which conveys good news and frank accountability is not in theabout the organisation14 tells us that interests of the corporation then it isthere is either no overwhelming (subject to costs involved I suppose) in“business case” for voluntary reporting the interests of society – which is prettyof a substantive nature or that manage- much what you would expect, defini-ment are too stupid to recognise that tionally, from an accountability. That asuch a case obtains (see also Maltby, range of efforts would be exerted – in-1997). Whilst the latter reason may not cluding a substantial minority of compa-be without foundation, the former seems nies producing weak and partial SEAR –the more persuasive. Consequently we to avoid having regulatory accountabil-can infer two things: first that full and ity suggests that formal accountabilityfrank accountability is not in an organi- has the potential to have a significantsation’s obvious self-interest; and sec- impact on corporations. This, in turn,ondly, that for some organisations (or seems to suggest that companies do notfor some proportion of all organisations) see the potential of social accounting asthere is a case, however marginal, for a trivial matter15.undertaking some form of SEAR. Thus, whilst current SEAR may indeed be fairly trivial, what is the potential ofIt may well be blindingly obvious that this phenomenon that social accountantsfull and frank accountability is not in an seek but corporations are so keen toorganisation’s self interest. However, avoid?listening to governments, business repre-sentative groups and the like (most obvi- Currently, with the exception of NGOs,ously groups like the World Business almost the only view of economic activ-Council for Sustainable Development, ity, its consequences, conflicts and tradethe International Chamber of Com- -offs is supplied to society by the com-merce, and the Confederation of British panies themselves16. The roll-back of theIndustry), one would not think so when State under the liberal agenda has beenthey are pleading against the“imposition” of regulatory accountabil- 15 There is, of course, the problem that the corporateity or (apparently without any concern sector always appears to oppose any moves that might be seen as acting to place constraints upon them (see, forover potential contradictions) arguing example, Collison, 2003).that “good” environmental and social 16 The role of the media is not examined here. However,performance is in the interests of “good” there seems to be more than a little concern that a com- bination of placed stories, editorial control, implicitmanagement or good financial perform- control over journalists, pressure on those journalistance (see, for example, Schmidheiny, (even if they are committed and knowledgeable) plus the fact that most media is part of the corporatist sphere all1992; Schmidheiny and Zorraquin, point to the media not being able (and least reliably and consistently) to offer an independent view on the world. 17 Nothing here suggests that such consequences are13 There are number of sources of introductions to the either entirely the result of current economic activity orlegal requirements of disclosure - see, for example, that they could not arise from other forms of organisa-Hibbitt and Collison (2004) for an introduction to the tion. That is a separate argument – although it seemsEuropean situation. exceptionally unlikely that the capacity for subjugation,14 See, for example, SustainAbility/UNEP (2002; environmental degradation and alienation could have2004). arisen under less economically fierce systems.
  10. 10. 178 R. Gray / Issues in Social and Environmental Accounting 2 (2007) 169-198both encouraged by corporations and has stantially, has been telling the truth andresulted in a void where the State should telling the whole truth. SEAR, if it werebe active - but which only NGOs seem effective, would expose the hubris ofable to partially fill (see, for example, corporate propaganda, dispute the mono-Bendell, 2000). The evidence of the im- lithic worldview offered by the largepact of corporate activity is far from uni- corporations and their agencies, anddimensional however. Whilst the West force the State, via civil society, to take(or, at least a substantial proportion of its back the mechanisms for the control ofdenizens) has undoubtedly increased its economic activity in the name of soci-material well-being by a very marked ety. Such a change could not but have adegree and, in the process, been taught profound effect on how we saw and con-to believe this to be the best of all possi- structed our world. Equally, such able worlds, there is increasing evidence change could have a profound effect onof environmental degradation, ethical how organisations saw themselves, por-bankruptcy, societal degradation, and trayed themselves and behaved them-alienation as a direct consequence of that selves (see, for example, Estes, 1996).18very corporate success.17 One can only This is why social accounting is poten-assume, a priori, that it is exactly this tially so very important. It will showless-than-perfect-world-data which the society(ies) what the actual conse-concern over SEAR is intended to sup- quences of the apparent economic well-press. being actually are and offer a counter- claim to the hubris and self-serving na-If this inference is correct, then the dis- ture of corporate propaganda19. It will,tinctions between the reformist/ consequently, demonstrate the extent toevolutionary approaches to social ac- which, for example, corporations undercounting (categories 4, 5 and 6 in Figure international capitalism cannot “care for1) begin to blur rather. In such a sce- our employees”, ”respect human life”,nario, SEAR becomes an essential com- place the protection for the environmentponent of allowing the demos (and in- at the head of our priorities”, “act in thedeed the State) to assess the extent to most responsible of ways” andwhich the organisational world has ful- “contribute to sustainability”20. It willfilled its responsibility and, more sub- show why a world run and dominated by corporations is not the best of all worlds.17 Nothing here suggests that such consequences are It will show corporations cannot – al-either entirely the result of current economic activity orthat they could not arise from other forms of organisa- most by definition – have their sociallytion. That is a separate argument – although it seems responsible cake and eat their profitexceptionally unlikely that the capacity for subjugation, seeking needs simultaneously21. It mayenvironmental degradation and alienation could havearisen under less economically fierce systems. also help show that the internationalisa-18 Of course, this may well be a very naïve view of tion of capital through MNCs and globalsocial change but it seems plausible as a necessary if notsufficient condition for potential change (see, for exam- stock markets is in danger of placingple, Meadows et al., 2005). capital beyond the real control of society19 I am grateful to David Owen who introduced me to and that, given that capitalism cannotthe work of Parkinson (see, for example, Parkinson,1997; 2003) a lawyer, who argues, irresistibly I think, 20that organisations can either have their activities closely These are not precise and accurate quotes from com-regulated or they can have their disclosure about those pany publications but exemplars that you could find inactivities regulated. Both are not needed but no democ- almost any social, environmental or sustainability re-racy can exist without either area being controlled. port. 21 Apologies for the badly-developed metaphor.
  11. 11. R. Gray / Issues in Social and Environmental Accounting 2 (2007) 169-198 179deliver utopia, is a cause of concern – dishonesty in its claims in this regard.and one upon which we need to act This has, I would suggest, provided awhilst such action seems still feasible more empirical basis for the Marxian(see, for example, Bailey et al, 1994a; critique without, necessarily, impugning1994b, 2000). the integrity, intelligence and morality of all which are associated with capitalismOf course, it may well be that this prog- and its bourgeois bag-carriers. Socialnosis for SEAR is naïve in the extreme. accounting – whether as a success or asThat is, it may well be that the corporate a failure in terms of the practices of ac-hegemony is so strong that it will con- countability -offers a serious and pene-tinue to subvert civil society (in often trating possibility for civil society tosubtle ways) to prevent the case for a seek to negotiate control – or at least lesssubstantive and penetrating accountabil- malign/more benign forms – of corpo-ity ever becoming a reality. It may rate activity (see, for example, Tinkerequally be that the more critical of com- and Gray, 2003).mentators are correct in believing thatthe State is now so subverted to the Second, if the search for substantive selfwhim of capital that civil society could -reporting23 social accounting and ac-never bring sufficient pressure to force it countability is unsuccessful as a strat-to act in the public interest and seek the egy, the role of civil society must not becontrol of large corporations and inter- ignored. SEAR has always embraced thenational capital markets.22 This may well “external social audits” as both a signifi-be so - but there are two responses to cant part of social accounting’s possibleoffer here. mechanisms to develop and deliver forms of accountability and as a meansFirst, social accounting has succeeded in through which reluctant organisationschanging the terms of the conversations (and other “entities”) can be held ac-that corporations have with society and, countable if their self-reporting provesin doing so, provide a substantive basis to be trivial (see, for example, Gray eton which to argue about the partial and al, 1991; 1996). As a wide range ofselective nature of that conversation. “external social audits” have shown andMore importantly, the corporate world continue to show there is a vibrancy tohas sought to seem to embrace, first, civil society that is willing to challengeenvironmental issues, then social re- corporate and/or state hubris and whichsponsibility and now sustainable devel- successfully seeks to mobilise in the in-opment and, in doing so, has demon- terests of the public. SEAR has a long-strated both its significant incapacity to standing commitment to research anddeliver on these things and its hubris and engagement with these various external social audit mechanisms24. It is impor-22 Note, of course, that the rhetoric of control that sug-gests that a (variously) limp, jealous and small-minded 23 To re-iterate and emphasise, my concern here issociety and the agents of the state simply want to sup- primarily with the accounts produced by the organisa-press the exciting and dynamic wealth-creating (sic) tions themselves in much the same way as organisa-entrepreneurs (sic) is largely fabrication. The need for tions are currently required to self-report on financialcontrol arises from the actions of corporations and matters. Such a focus does not, of course, come closestock markets which, despite protestations, those cor- to exhausting the range of reporting possibilities.porations and markets are unable or unwilling (or both) 24 The history of social audit is a vibrant one (see, forto control for themselves. The call for control is initi- example, Geddes, 1988; 1991 and Owen, 1991; Owenated by corporate action – not by societal whim. et al, 2000). Social Audit Ltd (see, for example,
  12. 12. 180 R. Gray / Issues in Social and Environmental Accounting 2 (2007) 169-198tant that this continues into the foresee- counting in the public sector (see, forable future. example, Frost and Toh, 1998; Lewis, 2000; Burritt & Welch, 1997); auditingIf SEAR is important – for what it could (Collison, 1996; Lightbody, 2000); so-do, is unable to do and currently does cially responsible investment (see, fornot do – then we may turn to look at example, Fayers et al, 2000; Friedman &what we currently know about SEAR. Miles, 2001; Miles et al, 2002; Kreander 2001; Kreander et. al, 2002) and a bur- geoning literature on environmentalSo What Do We Know? management accounting and its inter- plays with environmental managementThe foregoing has provided an overview systems (see, for example, Bennett &of some of the issues in SEAR – the in- James, 1997a; 1998a; 1998b; Joshi et al.,tention of which is to provide a sort of 2001). There are literatures on the teach-ad hoc template against which current ing of SEAR (see, for example, Lockhartresearch themes can perhaps be as- & Mathews, 2000; Gray & Collison,sessed. That is, what we know may well 2002) and on matters directly concern-be important but a more convincing case ing the accounting profession (see, forcan be often be made for the unimpor- example, Wycherley, 1997; Parker,tance of what we know – especially in 1997; Deegan, 1997). And so on. It is,the lights of what we find that we need however, towards reporting that mostto know once we have some idea what it research effort has been directed andis that we are perhaps seeking to achieve which, as argued above, is potentially(see, for example, Tilt, 2002). the most important part of SEAR. What do we know about that?Reviews of social accounting have takenplace before (see, for example, Azzone Descriptions of SEARet al., 1996; Mathews, 1997; Gray,2002) and many of them are far better SEAR has been around for a long timesyntheses of the field than will be pro- in both organisational annual reports andvided here. Furthermore, SEAR is now (usually intermittent)25 stand-alone re-an exceptionally diverse field. Whilst ports (see, for example, Estes, 1976).only 10 or 15 years ago a review of the The steady growth in reporting – espe-appropriate literature would have been a cially in the last decade or so, has beenrelatively simple matter there are now as much about standalone reports as itrelevant literatures on a bewildering ar- has about increasing the data in the an-ray of foci. Thus, in addition to reporting nual report. The bulk of the increase inand accounting in, predominantly large, reporting has been of a voluntary naturecompanies (which is the primary con- and has, consequently it seems, beencern here) there is a substantive litera- dominated by larger companies in theture on social and environmental ac- more obviously “developed” western 25 There are exceptions to this – as to all the generalisa-Medawar, 1976) and Counter Information Services tions contained here. The obvious exception is the re-were amongst the pioneers in the field that leads up to porting to and about employees and employment in themore recent publications such as the Christian Aid 1970s and 1980s. See, for example, Maunders, (1984);critique (Pendelton, 2004) and Christine Cooper’s Owen and Lloyd, (1985); Day and Woodward, (2004) aswork producing a “social audit” of Scottish students’ well as the reports on operations in Southern Africaexperiences. under apartheid.
  13. 13. R. Gray / Issues in Social and Environmental Accounting 2 (2007) 169-198 181nations. We have seen, first, the growth challenge all statements about the qual-of environmental, then social responsi- ity of reporting; we need to engage withbility (sic) and now sustainability (sic) “standards” of reporting (such as GRIreporting and many of the parameters of and ISEA) and improve them and wethis reporting have been delineated (see, need to understand better the processesfor example, Gray et al, 1995; Hackston of reporting and deconstruct the rhetoric& Milne, 1996; Lober et al, 1997; around current reporting. Let us be clearKPMG 1992; 1993; 1999; 2002; Sus- on this, virtually all reporting currentlytainAbility/UNEP 2000; 2002). has only one advantage26 – it changes the terms of the visible debate betweenWhilst it seems worthy and apposite to civil society and the corporate world. Incontinue to delineate the parameters of all other regards it is dishonest, cherry-this external self-reporting activity – picking and misleading and, if left un-especially as the signs seem to be that it challenged, is exceptionally likely to dois levelling off – it is probable that we social justice, ecological stewardshipalready know the most important charac- and sustainability more harm than goodteristics of this reporting. We know, for (see, for example, Tinker et al, 1991;example, that: Puxty, 1986; 1991; Tinker & Gray, • Only a minority of companies re- 2003; and see especially, Ball et al, port; 2000; and Owen et al, 2000). • Reporting almost never offers a Analysis of SEAR complete picture of organisational activity; The most robust of findings concerning • More detail of a reliable nature is SEAR appear to be that it varies directly provided on environmental issues with the size of the reporting company, than on social varies by country (and possibly by cul- • or sustainability issues; ture, see, for example, Azzone, et al, • Social responsibility reporting is 1996; Gamble et al, 1996; Adams et al, exceptionally selective; 1998; Williams, 1999; Kolk & van • Sustainability reporting, despite Tulder, 2004) and probably varies by protestations to the contrary is yet industry sector (see, for example, Clarke to address & Gibson-Sweet, 1999; Al-Najjar, 2000; • sustainability; and Purushothaman et al, 2000; Gray et al, • Accountability is not discharged. 2001). However, even these results need to be treated with care (Neu et al, 1998).Thus we know enough to realise wherewe need to go next – even though such More elusive have been the relationshipssteps are no surprise. We need to con- between SEAR and financial/economictinue to challenge all arguments in fa- and/or social and/or environmental per-vour of voluntary reporting; we need to formance. There is now an extensive and increasingly sophisticated literature (see,26 This comment is not addressed to those who fight for example, Pava & Krauz, 1996; Chanwithin organisations for the level of reporting we now & Milne, 1999; Milne & Chan, 1999;see. They, often acting as individuals, have enough tocope with without being attacked for this level of Hughes et al, 2000; Patten, 2002a; Rob-voluntary achievement. Voluntary reporting is almost erts, 1992; Toms, 2002; Tyteca et al,never going to be other than biased in favour of thereporter though. 2002). But whether we can assume that
  14. 14. 182 R. Gray / Issues in Social and Environmental Accounting 2 (2007) 169-198(a) social and/or environmental reporting said to proxy for certain types of pollu-bears any relationship with social and/or tion and, perhaps, could be assumed (ifenvironmental performance; (b) social carefully) to approximate for some elu-and/or environmental disclosure bears sive characteristic of environmentalany relationship with financial/economic management. I tend to think, however,performance and (c) social and/or envi- that we would need more sophisticatedronmental performance bears any rela- persuasion to encourage us to believetionship with financial/economic per- that the measured pollution was relatedformance has advanced little beyond to the company’s overall environmentalUllmann’s (1985) seminal, if inconclu- performance or had any relationshipsive, paper.27 with either social responsibility or sus- tainability29. Equally, the more generalThere seem to be a number of reasons proxies for social responsibility arefor this inconclusiveness in the litera- rarely, if ever shown to be related to anyture. Whilst there is increasing sophisti- substantive – as opposed to an apparentcation and care with which the disclo- – notion of social responsibility30. If re-sure variable is captured (typically lationships are found, they are relation-through content analysis, especially, ships that only dimly inform us aboutMilne & Adler, 1999; and Unerman, the central issues of concern. Conse-2000),28 there remains a strange reluc- quently, we would be well-advised totance to follow prior work and studies draw inference from this literature withcontinue to vary in the unit of measure- some care.ment and other key decisions intrinsic tocontent analysis. This, though, probably But more generally though, why shouldhas only slight impact on results. Of relationships between disclosure andmuch greater likely significance is the various aspects of performance be ex-range of proxies used to capture the pected to occur? Are we actually anyother variable of interest. Rarely are further beyond Ullmann’s concern aboutsimilar proxies adopted and, in broad the lack of theory underpinning this re-terms, the availability of data seems to search? In essence, it seems that we maybe a more pressing characteristic than know a good deal of a fairly fundamen-whether or not the proxy interestingly tal nature about the three key relation-captures some important dimension of ships31:(say) social responsibility or ecologicalstewardship. Thus data on some ele-ments of pollution certainly could be is a more subtle argument which could deserve more analysis – and to which I will return briefly later.27 30 Ullmann’s conclusion was that it paid to be good, but This, in turn, raises the enormous question of how tonot too good. What was missing, as Ullmann suggests, define social responsibility and the largely unsatisfyingwas a reliable explanation as to why this should be the nature of the literature on this topic to date. See, forcase. example, O’Dwyer (2003) for an introduction.28 31 There continues to be some interest in disclosure I would want to stress that this is not an attack onindices as well – in part, one suspects because they are positivism per se and certainly not an attack on empiri-easier to construct that content analysis. cism. Those are issues to be discussed elsewhere. More29 There is the whole implied issue here of perception. pertinently, I am very conscious of the fascism of the soThat is if we are only concerned with a relatively unso- -called liberal US academy under which colleaguesphisticated perception of the organisation’s environ- struggle and the creativity they bring to “conventionalmental performance then it might well be that a meas- looking” studies that ask interesting questions in anure of pollution can be said to proxy in the mind of the uninteresting environment. This is not an attack onignorant for ecological performance more widely. This them – anything but (see Patten, 2002b).
  15. 15. R. Gray / Issues in Social and Environmental Accounting 2 (2007) 169-198 183Social/Environmental Disclosure and sation will reduce waste and manage itsSocial/Environmental Performance: stakeholders and these are set against allWhilst it is clearly of importance to those equally vacuous statements thatknow, for example, whether the Rock- the market disciplines all badly managedness (1985) and Wiseman (1982) claims companies. Equally, if this were the casethat reporting and performance are in- then all companies would become goodversely related, that we should have as the financial pressures encourageddoubts about this relationship at all them to be so. In such a world, only aspeaks volumes for the abysmal quality moron would undertake actions whichof reporting. If we could suggest that cause social and environmental ills if itthere were systematic doubts about the was financially damaging to do so –relationship between financial reporting hence any polluting or socially irrespon-and financial performance we would sible company is run by morons anddraw some fundamental conclusions. they will be sacked and disciplined byThus, that we need to ask the question at the market. Doesn’t work, does it? Re-all tells us that the quality of reporting ductio ad absurdam works well here: ifabout social or environmental activity is the relationship is positive and holds,entirely insufficient to make any kind of then good companies are rewarded fi-assessment about the organisation’s so- nancially. Thus, we may well be encour-cial or environmental activity itself. This aged to infer, financially rewarded com-is clearly ludicrous and an abject failure panies are the best companies and,of what one might have thought was a hence, rich people are better. The conse-principal role of reporting. (It is even quence of this is that poor companiesmore ludicrous when one recognises that and, especially, poor people are thosethe notion of “environmental or social who are causing all the social and envi-performance” is very heavily circum- ronmental ills on the planet. The onlyscribed – how much worse it must then way in which the relationship might holdbe if we are concerned with reporting on is at the level of the win-win (Walley &something as complex as sustainability?) Whitehead, 1994) when the social re-The need to challenge the reports for this sponsibility or the ecological responsi-absence of quality is essential. bility is actually fairly minor in the great scheme of things. It is in the explorationSocial/Environmental Performance of these absurdities that the potential forand Financial/Economic Perform- SEAR lies – not in the exploration ofance: It is far from clear why one might proxy-driven versions of the relationshipexpect (as opposed to hope for/dream of) itself33.a positive relationship between thesefactors32. Of course there are all those Social/Environmental Disclosure andstatements that a well-managed organi- Financial /Economic Performance:32 This is a potentially intriguing relation- This is not to say that there will not be aspects ofsocial/environmental performance that are linked with ship (see, for example, Richardson et al.,aspects of financial performance. See, for example, 1999). As we know that most disclosureLorraine et al. (2004); Mathews (2004); and Deegan(2004). is of poor quality, why might it either be33 The whole issue of proxies becomes even more (a) correlated with better financial per-important here. All of what was said above applies here formance and/or (b) influential in share-in spades as both sides of the equation are relying onpotentially spurious proxy measures. holders’ assessments of future earnings?
  16. 16. 184 R. Gray / Issues in Social and Environmental Accounting 2 (2007) 169-198The first option might occur because an (Kolk, 1999; Cormier et al, 2004) – con-organisation could only undertake so- tinue to identify potential influences butcial/environmental disclosure when the the impact of those influences remainsorganisation was financially successful under-specified. In the end, it makes(Gambling, 1984). It is difficult to know sense to ask – or otherwise investigatehow plausible this is. The second option directly – why organisations report vol-is likely to depend upon signalling – of untarily. Such direct investigation hasmanagement quality, of risk manage- employed methods ranging from ques-ment, or reputation management etc. tionnaires through a variety of caseThus, the quality of the reporting is un- study approaches to ethnography.important but its existence is a signal tothe financial markets and other signifi- The literature clearly shows the com-cant (i.e. powerful and economic) stake- plexity of the reasons for reporting andholders that management are aware of, for continuing to report (a distinctionand in control of the social and environ- usefully made in Miles et al, 2002). Themental risks associated with the organi- range of reasons – from intrinsic motivessation. In such circumstances, the rela- of accountability through to responses totionship would be a plausible one and, pressure (internal and external) and themore importantly, would tell us about management of stakeholders – are pre-the nature and purpose of SEAR and sent in Bebbington & Gray, (1995),why it is generally speaking so Account- Buhr (1998; 2002); Gray et al (1998);ability-lite (see, for example, Neu et al, De Villiers, (1999), Solomon & Lewis,1998). (2002), Miles et al, (2002) and Adams (2002) for example. OrganisationalInvestigation of SEAR change and the role of individual “champions” within the organisationThe foregoing suggests that we have appear in Gray et al, (1995), Larrinaga etlearnt a fair bit about the “what?”, al (2001), Larrinaga and Bebbington“where?” and “when?” of SEAR, but (2001) whilst the importance of culturethat such research begs – and, indeed, is is flagged in Mathews and Reynoldslargely dependent upon – explanations (2001) and Adams (2002). Even the no-of the “why?” and the “how?” of SEAR. tion of pressure as a direct influence onInvestigations in this field are growing reporting is problematised in Freedmanalong with a steady growth in field work and Stagliano (1995) and in Deegan &concerned with social Gordon (1996). Detailed case studiesaccounting. such as Buhr (2002) and case examples such as Elad (2001) and Rahaman et alIt is becoming clear that the relationship (2004) simply expose the extent of thebetween observable likely influences on complexity of the reporting process.reporting practice and that practice itselfis complex (Walden and Schwarz, Even just this brief taste of (particularly)1997). Direct investigations of such rela- the field-based research shows us thattionships – which have included the rela- our simple theories are not yet able totionship between reporting and prosecu- tell us when an organisation will (not)tions (Deegan & Rankin, 1996), pressure report, why it will (not) continue to re-groups (Tilt, 1994) and stakeholders, port and why it does (not) report certain
  17. 17. R. Gray / Issues in Social and Environmental Accounting 2 (2007) 169-198 185information. The need for further field- ries is not a possibility. This would bework seems inescapable (see also later, no bad conclusion34. It would, at a mini-when experimental fieldwork is consid- mum, show that whilst we could not pre-ered briefly). dict what would encourage better social and environmental reporting (other than,The Theories of SEAR probably, a formal regulatory regime), reporting practice is not homogeneousSEAR has been well-served by its theo- and the possibility for development andries -stakeholder and legitimacy theories change – via engagement – may stillin particular (see, especially, Gray et al. exist.1995; 1996; Deegan, 2002; O’Donovan,2002) - but they remain under-specified. There may well have been a general in-This also seems to be true for other theo- crease in the standard of (for want of aries which we see employed in SEAR better phrase) “middle level theory”,but which are more obviously drawn (Laughlin, 1995). However, more in-from elsewhere in accounting, finance tense theorising – especially meta-and business – typically, agency theory, theorising - is still the exception ratherdecision usefulness and the bourgeois than the rule. Whilst important stimulivariant of the political economy perspec- from, Power, (1991; 1994; 1997) and,tive. Thus whilst such theories are useful most notably, Lehman (1995; 1999;as sensitising mechanisms, as aids to 2001; 2002) have sought to problematisefocus and as a means to articulate data, SEAR and, especially, the simple theo-they lack the precision and specificity rising around accountability (Gray et al.,that would be necessary to fully explain 1996), it is still rare to see critical theoryreporting or accounting behaviour. explicitly informing social accountingFieldwork has drawn from and added to debates (see, for example, Tinker &the theories in currency around social Gray, 2003). This is especially importantaccounting. Most notably the mimetic because, as far as I can see, it is not pos-attractions of institutional theory sible to consider the future, the urgent(Correa, 2003), the biological appeal of potential for the pursuit of sustainabilityorganisational change and autopoesis and more immediately the possibilities(Gray et al, 1995; Larrinaga & Bebbing- of responsibility and ecological steward-ton, 2001) and the insights derived ship, without a serious appreciation ofthrough structuration theory (Buhr, global financial capitalism, the role of2002) are all adding to the theoretical the state and the roles played by powersophistication of the field and, perhaps, in its various guises35. This has been theshowing that a generalised set of theo- argument behind, for example, Tinker et al, (1991); Puxty, (1986; 1991); and34 In financial accounting more generally, no theory is probably Neu et al, (1998; 2001) andable to explain all aspects of a complex, ad hoc¸ prac- Gallhofer & Haslam (1997a; 1997b). Ittice which, lacking a single imposed theoretical basis,is the victim of haphazard power influences and is, as a looks increasingly likely – and the re-consequence, beyond simple rational explanation at search in SEAR often suggests this butany level of detail. rarely explicitly – that a company oper-35 I explicitly acknowledge here the influence – onemight even say nagging – of Colwyn Jones and Rob ating under market capitalism simplyBrier in particular. They have been trying to get social cannot deliver any form of social re-accountants to recognise this for some time. Sorry ithas taken so long for the penny to finally drop! sponsibility beyond the utterly trivial.
  18. 18. 186 R. Gray / Issues in Social and Environmental Accounting 2 (2007) 169-198Equally, there seems to be no evidence tion, see, for example, Bebbington &(despite cries to the contrary -see, for Tan, 1996; 1997; Bebbington & Gray,example, Schmidheiny, 1992) that any- 2001)37 and with BP and the use of Sus-thing like sustainability can be delivered tainability Assessments Models (SAMs)by an increasingly unfettered capitalism. (see, for example, Baxter et al, 2004).In these circumstances, the role of Other experiments that can be accessedSEAR in political, experimental and in the public domain include the workcritical research becomes so very impor- by Forum for the Future and Trucost ontant indeed. financial implications of sustainability and variations on external social auditsThe Political, Engaging, Experimental and silent accounts (see, for example,and Critical Roles of SEAR Gray, 1997; Henriq Ues & Richardson, 2004; Adams, 2004).I have bemoaned elsewhere (Gray,2002) the relative paucity of literature Research that engages politically is, ofthat directly reports upon the various course, more diverse than this. Directprocesses of engagement which are un- critiques of practice (see, for example,dertaken by academics. Such engage- Newton & Harte, 1997; Owen et al,ment includes such diverse organs as the 2001) keep our mind focused on the keyInstitute for Social and Ethical Account- issues and, as Tilt (2002), so eloquentlyability, the Global Reporting Initiative, argues, if our work is not directed to-the Association of Chartered Certified wards accountability what is its pur-Accountants Reporting Awards, the pose?United Nations36 as well as work di-rectly with reporting organisations and The research work which provides sys-NGOs. Nevertheless, such engagement tematic critique and assessment ofis the means by which research can most SEAR in all its forms also has the effectdirectly affect – or at least seek to affect of raising the game of other researchers– the world of practice. In this vein, and those involved in engagement whilstthere is, fortunately, a small but substan- also providing potentially radicalisingtive literature that reports upon experi- material for use in the classroom. Exam-ment with social accounting and with ples that come to mind here includeattempts to derive guides to practice that Buhr & Freedman (2001) and Tiltmay contribute to accountability and/or (2001).sustainability. Examples of this includethe social accounting experiences of Generally, the field and experimentalTraidcraft (the fairtrade organisation in based work in SEAR is growing steadilythe UK -see, for example, Dey, 2002; but has yet to reach the same maturity asGray et al, 1997) and the experiments is apparent in other social scienceswith sustainability by Landcare (the where, for example, ethnography, actionNew Zealand Crown Research organisa- research and their analogues are almost36 commonplace. The opportunities for There are a number of examples of this area of cross-disciplinary work with direct im-engagement in the literature - see, for example, Adamset al, (1998); Gray and Bebbington, (2000) and, espe- plications for praxis in this area seemcially, Dey’s work in Gray et al (1997).37 most encouraging. Another experiment in this vein is reported in Lam-berton (2000).
  19. 19. R. Gray / Issues in Social and Environmental Accounting 2 (2007) 169-198 187Conclusions − We must not ever forget why so- cial accounting really, really mat-SEAR has grown, in a relatively few ters – or rather can matter;years, from a very marginal area of in- − For those with a commitment toterest and practice to a diverse and vi- SEAR (and related endeavours),brant area of research, teaching and there is a crucial need to keep thepractice. (And, incidentally, some of this radical potential of what we dovibrancy may well derive from there clearly in mind; andbeing twin sources of literature in the − Finally, and perhaps most impor-field: accounting and finance on the one tantly, we must take more time tohand and the broader management and deconstruct our research questionsorganisational studies on the other). It and, I should suppose, deconstructbehoves all of us interested in the field the processes by which we con-to maintain the diversity of approaches struct those questions. So many ofto SEAR through an active interest in our common research questionsthe literatures of social responsibility, are actually significantly uninter-sustainability, ecology, sustainable de- esting and often what is genuinelyvelopment and social justice through fascinating is that we can ask suchwhich we can articulate the specifics of questions at all.our particular subject specialisms. Asscholars, despite the pressures on the Increasingly it seems to me that we willacademy (which is, itself, another story), best achieve our aims in social account-we have to, I believe, find a means to ing (as indeed with any area of radicalkeep our eye on the bigger picture endeavour grounded in praxis) if we, aswithin which our study takes place. This scholars, employ two distinct, if uncom-is especially important when issues such fortable, themes within our work. Firstas social responsibility, sustainable de- and foremost we each need to ensurevelopment and social justice are the sub- that we engage in ways that keeps theject of widespread rhetoric but the a pri- critical edge alive. This engagement mayori case must be that capitalism – espe- be with companies38, NGOs, the State orcially in its present form(s) – simply is the grassroots of civil society, for exam-definitionally incapable of delivering ple, but in each the difficulty is then tosuch qualities – the system is so success- connect our scholarly work theoreticallyful because it intrinsically ignores such to that work of engagement. I personallyconcerns. If we lose sight of this we are find this exceptionally challenging but itin danger of repeating the circular steril- keeps the work lively and prevents anyity of the social responsibility debate intellectual “comfort zone” developing.from, especially, the 1970s. Second, and equally challenging, is that each of us must engage outside our dis-Such concerns can inform a review of ciplinary zones of comfort. (Accountantsour current “state of the art” in social have to do this because, typically, theaccounting. In short: level of their initial social science educa- − Current practice in SEAR is al- 38 Although my rule of thumb is that if a company is most exclusively trivial; willing to pay me a consultancy fee for what I do I − Rhetoric to the contrary abounds should be suspicious of my own work. If that same and must be challenged; company invites me back then I know that I have lost my critical edge.
  20. 20. 188 R. Gray / Issues in Social and Environmental Accounting 2 (2007) 169-198tion is woeful and only through wide e n vi r on me nt al r ep or t i n g-reading can any kind of progress be performance portrayal gap. Ac-made.) The challenges of presenting counting”, Auditing and Ac-one’s work across disciplines and work- countability Journal, Vol. 17,ing to the highest levels of scholarly No. 5, pp. 731-757.standards in another discipline are, I ________, Hill W. Y. & Roberts C. B.find, more than enough to keep my hu- (1998) “Corporate social report-mility in particularly good shape and ing practices in Western Europe:aspirations high. For me, making an aca- Legitimating corporate behav-demic presentation in geography or phi- iour?”, British Accounting Re-losophy scares me stupid but is an essen- view, Vol. 30, No. 1, pp. 1-21.tial component of scholarly endeavour. Al-Najjar F. L. (2000) “Determinants of social responsibility disclosureFinally if I am to look to the future I am of US Fortune 500 firms: Anto take refuge in the warnings about the application of content analysis”,inability of mankind to predict the future Advances in Environmental Ac-arising – at least in part -from the counting and Management, Vol.“failure” of human progress (sic) to be- 1, pp. 163-200.have in linear ways. If we in the acad- Andrew J. (2000) “The accounting craftemy can make as much progress in the and the environmental crisis:next 10 years as we have in the last 10 Reconsidering environmentalon social accounting, sustainability and ethics”, Accounting Forum, Vol.(perhaps) social responsibility then we 24, No. 2, pp. 197-222.will have achieved much and I could Bailey D., Harte G. & Sugden R.certainly not predict what that future (1994a) Making transnationalsmight look like. On the other hand if we accountable: A significant steponly make as much progress in practice for Britain. London: Routledge.in the next 10 years as we have in the ________, ________ & _______last decade, I would think that we had (1994b) Transnationals and gov-every cause for pessimism. Radical en- ernments: Recent policies in Ja-gagement is both our duty and our pri- pan, France, Germany, themary weapon in the interplay between United States and Britain. Lon-the academy and the market – civil soci- don: Routledge.ety needs all the help it can get from us - ________, ________ & _______ (2000)suppressed scholars though we might be. “Corporate disclosure and the deregulation of international in- vestment”, Accounting, AuditingReferences and Accountability Journal Vol. 13, No. 2, pp. 197-218.Adams C. (2002) “Internal organisa- Ball A., Owen D. L. & Gray R. H. tional factors influencing corpo- (2000) “External transparency or rate social and ethical reporting, internal capture? The role of Accounting”, Auditing and Ac- third party statements in adding countability Journal, Vol. 15, value to corporate environmental No. 2, pp. 223-250. reports”, Business Strategy and_______ (2004) “The ethical, social and the Environment, Vol. 9, No. 1,
  21. 21. R. Gray / Issues in Social and Environmental Accounting 2 (2007) 169-198 189 pp. 1-23. ronment-related performanceBaxter T., Bebbington J. & Cutteridge measurement for business”, Re- D. (2004) “Sustainability As- search Report 55. London: sessment Model: Modelling Eco- ACCA. nomic, Resource, Environmental ______ & _____ (Eds) (1998b) The and Social Flows of a Project”, green bottom line: Environ- In A. Henriques & J. Richardson mental accounting for manage- (Eds.), The triple bottom line: ment. Sheffield: Greenleaf. Does it all add up?, pp. 113-120. Benston G. J. (1982a) “Accounting and London: Earthscan. corporate accountability”, Ac-Bebbington K. J. & Gray R. H. (1995) counting, Organizations and So- “Incentives and disincentives for ciety, Vol. 7, No. 2, pp. 87-105. the adoption of sustainable de- __________ (1982b) “An analysis of the velopment by transnational cor- role of accounting standards for porations”, International Ac- enhancing corporate governance counting and Reporting Issues: and social responsibility”, Jour- 1995 Review, pp. 1-39. Geneva: nal of Accounting and Public United Nations. Policy, Vol. 1, No. 1, pp. 5-18._____________ & _________ (2001) Birkin W. P. (1996) “The ecological “An account of sustainability: accountant: From cognito to Failure, success and a reconcep- thinking like a mountain”, Criti- tion”, Critical Perspectives on cal Perspectives on Accounting, Accounting, Vol. 12, No. 5, pp. Vol. 7 No. 3, pp. 231-257. 557-587. Buhr N. (1998) “Environmental per-_____________ & Tan J. (1996) formance, legislation and annual “Accounting for sustainability”, report disclosure: the case of Chartered Accountants Journal acid rain and Falconbridge”, Ac- (NZ), July, pp. 75-76. counting Auditing and Account-_____________ & _______ (1997) ability Journal, Vol. 11, No. 2, “Accounting for sustainability”, pp. 163-190. Chartered Accountants Journal _______ (2002) “A structuration view (NZ), February, pp. 37-40. on the initiation of environ-Bendell J. (2000) (Ed) Terms for en- mental reports”, Critical Per- dearment: Business, NGOs and spectives on Accounting, Vol. sustainable development. Shef- 13, No. 1, pp. 17-38. field: Greenleaf /New Academy _______ & Freedman M. (2001) of Business. “Culture, institutional factors andBennett M. & James P. (1997) “Making differences in environmental dis- environmental management closure between Canada and the count: Baxter Internationals en- United States”, Critical Perspec- vironmental financial statement”, tives on Accounting, Vol. 12, No. Greener Management Interna- 3, pp. 293-322. tional, Vol. 17, pp. 114-127. Burritt R. & Welch S. (1997)______ & _____ (1998a) “Environment “Accountability for environ- under the spotlight: Current prac- mental performance of the Aus- tices and future trends in envi- tralian Commonwealth public

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