Governmentality in accounting and accountability: A case study of embedding sustainability in a supply chain

This paper examines how the introduction of sustainability accounting has been used by an organization as a means to seek to govern social, economic and environmental issues relating to suppliers. The concept of governmentality and four analytics of government are proposed as a means to examine systematic ways of exercising power and authority. This theoretical framework illuminates the specific rationales and practices of government that enable particular aspirations of reform – such as sustainability – to be constituted. The analysis is informed by the discussion of the implementation of sustainability-orientated regimes of practice in the context of a single supply chain within a major supermarket chain in the UK against the theoretical analytics of government. The paper provides novel empirical insights into how sustainability accounting shaped forms of power, rationales and practices in a supply chain. It explores the extent to which senior decision-takers frame and use sustainability accounting to foster disciplinary effects based ostensibly upon social and environmental goals. These are found in practice to be reformulated primarily according to an economic (rather than social or environmental) regime of practice.     

Energy efficiency complexities: A technical and managerial investigation

Increased concern about sustainability issues has been voiced in the accounting literature. Although environmental performance is only one dimension of sustainability, it is nevertheless a key factor, especially in sectors such as the process industry, which consume substantial volumes of materials and energy. Energy itself is important because its production is a major cause of carbon emissions. Hence efforts to reduce its use are important, and here energy efficiency measurement and management play a key role.Although the conceptual challenges posed by energy efficiency measurement are well known in the technical literature, there has been little discussion of energy efficiency management. This paper examines the complexities involved in the measurement and management of energy efficiency. In particular, it examines how these complexities impede effective use of management control systems to impact the ability and motivation of employees to work toward the goals of sustainable development. The study is a cross-disciplinary one, and combines technical energy efficiency research and environmental management accounting research in performance management. The study provides practical knowledge of what happens in organizations pursuing sustainable development, in this case environmental performance. The paper demonstrates a performance indicator that does not allow proper energy efficiency performance management because it is still technically underdeveloped. Setting targets for the indicator is especially problematic.     

Measuring What Matters: Industry Specificity Helps Companies and Investors Gain Traction on Sustainability

Financial analysts interpret the performance of companies and their securities through an industry lens. Just as an industry approach is critical in financial analysis, it's also critical in helping investors evaluate sustainability performance, since sustainability issues differ from one industry to the next—in large because of differences in how companies use natural and other social resources when bringing their goods and services to market, and how they impact society and the environment in the process. The Sustainability Accounting Standards Board (SASB) was created in 2012 to deliver a full set of sustainability accounting standards that can be used to guide industry‐specific corporate sustainability disclosure to the capital markets. SASB has now issued provisional standards for 79 industries, thereby enabling companies and investors for the first time to identify patterns of sustainability risks and opportunities both across and within industries. Although high‐level issues such as climate change, product safety, and resource intensity and scarcity have material impacts across a variety of sectors, those impacts often vary greatly from one industry to the next. Thus, although the risk may be ubiquitous, it is also differentiated to the point that each industry has its own distinct sustainability profile. Understanding these unique profiles can help companies better manage the issues that are most likely to present material risks to their industries.     

Linking foresight and sustainability: An integral approach

This paper looks at the growing confluence between sustainability thinking and futures thinking. Drawing on developments based on Integral Theory, it then looks at how an emerging Integral Sustainability (IS) promises to enhance theory and practice in the sustainability field. In particular, the paper looks at how IS makes sense of sustainability challenges from an ontological position based on perspectives in place of objects (and their systems). A framework is outlined for understanding how various sustainability perspectives are constructed. This framework is then used to analyse a range of general perspectives the authors have identified that relate to nuclear power as a response to climate change. The strength of the IS approach is considered in the context of ongoing debate in Australia over the appropriateness of developing a local nuclear power industry as a response to climate change.     

Harmonisation of European Insolvency Law and the Need to Tackle Two Common Problems: Common Pool and Anticommons

Insolvency law has finally become a field of law for which harmonisation at a European level is considered both important and feasible. In deciding upon the content of such harmonised rules, there will need to be a common understanding about the goals of insolvency law and, therefore, a European debate on bankruptcy theory. Bankruptcy theory, and most notably the influential creditors' bargain theory, has long viewed insolvency law as a set of rules for overcoming common pool problems. Bankruptcy theory thus far has almost completely overlooked anticommons problems. Anticommons present themselves in a situation in which there are several owners or entitled parties, and each of the parties has it within its power to block the use by others. Should anticommons behaviour in insolvency procedures go unchecked, creditors as a whole will be harmed. Insolvency is a collective process, and this process may not be sabotaged by a single party. Four typical insolvency issues, each identified by INSOL Europe as a candidate for harmonisation at a European level, are discussed, analysing them in terms of common pool problems and anticommons: preferences, reorganisation/composition plans, claim validation and insolvency of a group of companies. Copyright © 2012 John Wiley & Sons, Ltd.     

Islamic Banking Sustainability: A Review of Literature and Directions for Future Research

This study reviews literature on the Islamic banking sustainability and presents directions for future research. The article discourses scholars’ and practitioners’ views on the two perspectives of sustainability in relation to the objectives of Islamic banking and finance. That there are limited studies on Islamic banking sustainability is one of the major issues presented in the article. The study highlights essential issues on the sustainability without in-depth empirical analysis. The needs for long-term economic, social, and environmental sustainability are not a compromising issue. Therefore, Islamic banks must strike a balance between the institutional, societal, and environmental sustainability in order to achieve the objective of Sharia.     

Rentenversicherung zwischen Nachhaltigkeit und Gerechtigkeit

Compared to other Western European countries, Germany has taken considerable steps to improve the sustainability of financing its public pension system. However, more recently we have observed attempts to revoke some of the enacted reforms before their implementation. If the positive correlation between income and life expectancy is taken into account, one can indeed diagnose a discrimination against low-income earners in the present retirement benefit schedule, and this very group will suffer disproportionately from the increase in legal retirement age enacted in 2007. Therefore, to protect the sustainability of the pension system in the political sphere, it may be necessary to modify the schedule in favor of this group. In other words, sustainability and equity of the pension system must go hand in hand.     

Future-oriented higher education: Which key competencies should be fostered through university teaching and learning?

Universities play an important role in shaping the future of the world society in terms of sustainable development by generating new knowledge as well as contributing to the development of appropriate competencies and raising sustainability awareness. During the last years, many universities have undertaken activities for implementing Higher Education for Sustainable Development (HESD). Many have asked which key competencies are most relevant for sustainable development and hence should be developed in future-oriented higher education. Different approaches for the selection of sustainability key competencies have been developed, but there is little international agreement in the debate around the most important key competencies. Consequently, this paper asks which individual key competencies are crucial for understanding central challenges facing the world society and for facilitating its development towards a more sustainable future, and thus identifies those competencies which should be fostered through university teaching and learning. The empirical design of the study is related to a Delphi study in which ‘sustainability key competencies’ are defined by selected experts from Europe (Germany, Great Britain) and Latin America (Chile, Ecuador, Mexico). The results show that twelve key competencies crucial for sustainable development can be identified; the most relevant ones are those for systemic thinking, anticipatory thinking and critical thinking.     

Corporate Disclosure of Material Information: The Evolution—and the Need to Evolve Again

This article by the former chairman of the FASB and the founder and executive director of the new Sustainability Accounting Standards Board (SASB) presents the rationale for and mission of the SASB. As the authors point out, both the Securities and Exchange Commission, which was created in 1934, and the Financial Accounting Standards Board, set up in 1973, emerged during times of low investor confidence to restore trust in the capital markets. And the institutional changes brought about by the creation of both the SEC and the FASB succeeded in eliciting new information for investors and in raising the standards by which such information was reported. But as the authors go on to argue, we now live in a different world, one in which the management of environmental, social, and governance issues is increasingly viewed as critical to the long‐run value creation of companies. And because today's corporate reporting fails to account in a systematic way for material non‐financial issues, it's time once again for the capital markets to evolve. The SASB aims to meet this need by creating sustainability accounting standards for use by public companies in disclosing a minimum set of material sustainability impacts for companies in over 80 different industries. As part of a natural evolution in disclosure, the SASB aims to achieve the same goal the SEC and FASB started with: to protect investors and the public.     

Bridging Sustainability and Finance: The Value Driver Adjustment Approach

Even though most large corporations view sustainability considerations and concerns as having the potential to affect their revenue and profits, and studies have shown that sustainability can affect stock returns, investors and corporate managers continue to struggle to incorporate such concerns into their financial decision‐making. As a consequence, the valuation effects of sustainability issues are not fully reflected in either the valuation of companies by investors or in capital investment decisions by corporate managers. The author argues that sustainability can be integrated into both of these kinds of financial decision‐making by linking it to business models, competitive positions, and value drivers using what the author calls a “value‐driver adjustment” (VDA) approach. The basic idea is simple: material sustainability issues affect business models and competitive positions, which in turn affect the company's value drivers—notably, sales, margins, and capital. The VDA approach explicitly considers these linkages by taking three steps: (1) identifying a company's material sustainability issues; (2) analyzing how these issues are expected to affect the company's business model and competitive position; and (3) quantifying the effects of such changes in business model and competitive position on the company's value drivers, including its cost of capital. In the first part of the article, the author provides an investor perspective that shows how sustainability can be integrated into investment decisions by asset managers. There he explains how and why ESG integration has so far failed to become mainstream, and what needs to be done to make it successful. The second part of this article takes the corporate perspective and shows how sustainability can be linked to value drivers using much the same ingredients as in asset management, but slightly different tools that can help corporate managers incorporate sustainability concerns into strategy and operations, including the finance function. And in closing, the author brings together corporate and investor perspectives while showing how sustainability programs can be used to make the relationship between companies and their shareholders both stronger and longer‐lasting.     

Peas in a Pod: Are Efficient Municipalities also Financially Sustainable?

Are efficient councils financially sustainable? We argue that an efficient council may not necessarily be financially sustainable. Our subsequent empirical analysis finds limited evidence in favour of an ‘efficiency–sustainability’ nexus. Thus, policies aimed at improving a council's efficiency may not automatically enhance their financial sustainability. Public policy makers have principally focused on improving the operational efficiency of local government on the presumption that this will result in a more financially sustainable sector. We argue that it is erroneous to assume that an efficient local government entity will necessarily be more fiscally sustainable. To test this argument, we apply an innovative method for empirically testing the association between financial sustainability and operational efficiency to the New South Wales local government system. Our results suggest limited positive associations between financial sustainability measures and municipal efficiency.     

Critical thinking and communication skills: Integration and implementation issues

This article describes issues associated with implementing an integrated approach to critical thinking and communication skills within accounting courses. The article builds on the work of Hirsch and Collins (1988) and discusses the following issues: (a) the collaboration of accounting and English faculty, (b) types of assignments, (c) assignment design, (d) the feedback process, (e) revisions in courses to accommodate a communication skills program, and (f) resources and motivation. The examples offered are from management/cost accounting courses, but our experience suggests that such an integrated approach to teaching critical thinking and both oral and written communication skills works well within most accounting and other business courses. However, individual programs will need to be tailored in order to address the issues defined here in ways that best fit their mission, goals, and resources.     

Strategic renewal for business units

Over the past decade, business units have increasingly taken the role of strategy formulation away from corporate headquarters. The change makes sense: business units are closer to customers, competitors, and costs. Nevertheless, business units can fail, just as headquarters once did, by losing their focus on the organization's priorities and capabilities. John Whitney--turnaround expert and professor of management at Columbia University--offers a method for refocusing companies that he calls the strategic-renewal process. The principles behind the process are straightforward, but its execution demands extensive data, rigorous analysis, and the judgment of key decision makers. However, when applied with diligence, it can produce a strategy that yields both growth and profit. To carry out the process, managers must analyze, one by one or in logical groupings, the company's customers, the products it sells, and the services it offers in light of three criteria: strategic importance, significance, and profitability. Does a given customer, product, or service mesh with the organization's goals? Is it significant in terms of current and future revenues? And is it truly profitable when all costs are care fully considered? Customers, products, and services that do not measure up, says the author, must be weeded out relentlessly. Although the process is a painstaking one, the article offers clear thinking on why-and how-to go about it. A series of exhibits takes managers through the questions they need to raise, and two matrices offer Whitney's concentrated wisdom on when to cultivate--and when to prune.     

关于积极财政政策的转型与可持续性问题的思考

近年来,中国连续实施大规模的减税降费政策,宏观税负持续下降,积极财政政策的可持续性问题引起社会各界的高度关注.积极财政政策是否具有可持续性,积极财政政策何去何从?作为宏观经济政策的任何一种财政政策都不可能长期不变地存在下去.如何理解积极财政政策?如何让财政政策具有可持续性?如何让财政政策更有效地发挥作用?文章试图对这些问题作初步的回答,并在讨论财政政策理论发展趋势的同时,展望中国未来的财政政策.     

Sustainable procurement in health and social care in Northern Ireland

This article reports on a sustainable public procurement project in Northern Ireland. The authors found that limited official guidance was available, especially on equality; nevertheless staff had positive attitudes and sustainability criteria were being embedded in procurement processes. While there is a need to overcome limited knowledge on social aspects and whole life costing, sustainable procurement was found to be compatible with efficiency. Sustainable procurement, if used effectively by confident and well-qualified staff, can achieve not only sustainability goals but also those relating to efficiency and economic recovery.     

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

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

Modelling the pension system

This paper argues that pensions modelling should be a parsimonious process using different methodologies for different purposes. A range of methodologies exists and is being extensively used in different countries and quarters. Very simple aggregate accounting models can yield robust results as for the sustainability of pension systems, an issue that worries most analysts and governments. While more sophisticated formally derived models have the advantage of yielding results that take into account general equilibrium effects, ad hoc models have the advantage of being better able to cope with the fine structure of pensions programmes and formulae. Focusing on the Spanish pension system to illustrate the output of an ad hoc model, several applications are briefly presented: sustainability indicators up to the horizon 2050, effects of increased migratory flows and an evaluation of recent pension reform legislation. Some attention is paid to the fact that societal issues and behaviours are intertwined with pensions in a way difficult to be captured by standard modelling methodologies.     

An Assessment of the Currency Board Regime in Bosnia and Herzegovina

This paper describes currency board regime operations in Bosnia and Herzegovina and assesses their performance and sustainability in the context of the economic, political, and institutional environment. To the best of our knowledge, our study seems to be unique in this respect. Based on our analysis, we judge that Bosnia and Herzegovina's currency board regime is well suited and appropriate, given the country's history, its current state, and its future goals. Nevertheless, we believe that the key to the currency board's sustainability, and an eventual accession to the European Union, is a stronger legal and regulatory infrastructure and a more unified political system.     

From vision into action

Utopian thinking, problematic as it can be, is used for imagining alternative visions of the future as a design process. Visioning adds foresight to an active-learning process in which participants share critical reflection, decision and change, as Anticipatory Action Learning. Guidelines, including ethics, are suggested. Once its limitations are recognised, it can be a used for integrating learning in a social system.     

Alignment of performance measurement to sustainability objectives: A variance-based framework

Meaningful incorporation of environmental and social responsibility goals into organizational strategic plans requires a mechanism to measure and reward performance contributing to that objective. This paper formulates such a framework using management accounting concepts. We demonstrate that the benefits of pursuing sustainability objectives can be decomposed into three parts. The first consists of what might be considered a natural outcome of pursuing the traditional economic goal of efficiency through cost-minimization (a “waste” variance). The second part consists of sustainability gains that produce societal benefit but may be incongruent with short-term economic goals (a “sustainability” variance). The third part stems from a change in optimal output level when that is considered endogenous to the firm (a “volume” variance). While elimination of waste variances can be encouraged using a traditional performance evaluation and reward structure, elimination of sustainability and volume variances requires redesign of performance evaluation tools and reward structures. We demonstrate that failure to recognize and incorporate the difference between the three variances can lead to inefficient allocation of resources, over- or under-production, and only partial fulfillment of environmental goals. Further, availability of shadow price information is essential to implementing such a performance measurement system; thus it is a public policy imperative to develop markets that establish such prices.