Editorial: Managing and accounting for sustainable development across generation

Georgios Georgakopoulos (7197245)

Ian Thomson (7197242)

Suzana Grubnic (1247532)

English

Loughborough University Institutional Repository

Editorial: Managing and accounting for sustainable development across generations  Suzana Grubnic, Ian Thomson and Georgios Georgakopolous  Guest editors  Introduction In our call for papers for this Public Money & Management theme, we presented a case for greater research into the governance of and accounting for intergenerational equity by governments and other public sector organisations (PSOs).  There is compelling and ever-increasing evidence, for example, on the impacts of human activities on climate change and of social inequality on the health of the population.  Our call built upon the arguments of Ball and Grubnic (2007) and Ball et al. (2014) on the distinct responsibilities of PSOs (as compared to the corporate sector), and acknowledged the assertions of Broadbent (2013) and Gray et al. (2014), amongst others, on the potential value of such research.  Positively, the contributions to the themed issue suggest an interest by academics and practitioners in conducting research on developing understanding of sustainable development in PSOs.   The papers indicate willingness in PSOs to protecting future generations’ quality of life and, in a couple of papers, share innovative approaches to assessing the impact of unsustainability within given localities (see Denedo et al. and Eckersley et al.).  However, the papers also reveal challenges to moving forward on a sustainable development agenda which we hope prompts further dialogue and research in the future.  Accounting-sustainable hybrids A number of papers included in the themed issue provide empirical insights into the use of accounting-sustainable hybrids in PSOs (Thomson et al., 2014, Grubnic et al., 2015).  The papers focus on different nation states, employ different methods, and help to elaborate on the notion of hybrids that may have the potential to impact upon and work toward helping to achieve intergenerational equity.  Taking a similar methodological approach, the contributions of Larrinaga et al. and Montecalvo et al. help us to understand the take-up of external sustainability reporting in Spain and New Zealand respectively.  Both papers report on the content analysis of reports over an extended time period, and both supplement findings with interview analysis.  However, while Larrinaga et al. focus their study on mandatory reports, Montecalvo et al. consider the reporting practices of a state-owned enterprise not subject to legislation.  Contrary to expectation, despite the introduction of regulation of sustainability reporting by PSOs in Spain, Larrinaga et al. finds a decrease in the quality and comprehensiveness of the reports.  The findings contrast to that reported by Montecalvo et al. who provide evidence of a steady increase in the quantity and quality of sustainability disclosures at New Zealand Post.  The findings suggest that the political context, and the pre-disposition of individual organisations, is important to the reporting behaviours of PSOs.  The paper by Larrinaga et al., for example, suggests that political changes, such as the election of a new government, could render prior sustainability initiatives vulnerable to realising their intended purpose.  As the incoming government was perceived by interviewees as reluctant to fully embrace the CSR agenda, PSO sustainability accounting was marginalised.  Political discontinuity is presented as having consequences on an intergenerational equity agenda.  The research of Denedo et al. provides insights into the development of a context-specific accounting-sustainability hybrid with considerations for present and future generations at its centre.  The study takes as its starting point the significant impacts of oil spills in the Niger Delta, and development of the Oil Spill Monitor (OSM) as a means to create transparency, improve accountability and help prompt the remediation of oil pollution.  The study serves to broaden our conception of accounting-sustainability hybrids, challenging the assumption of shared calculability as the only medium through which hybridisation can occur.  Given tangible impacts of oil spills on the water consumed by the local population, the OSM was designed to involve local stakeholders in improving basic human rights such as clean water.  In common with Denedo et al., the paper by Eckersley et al. presents a multi-stakeholder approach in helping to safeguard present and future generations.  The study reports on how Newcastle City Council interacted with local stakeholders to understand how severe weather could impact upon services and infrastructures across North-East England.  In order to help organisations understand their interdependent nature, decision theatre workshops were held to explore different weather-related scenarios.  Considering the research of Eckersley et al. in relation to accounting-sustainability hybrids, it appears that the development of hybrids could benefit from the holding of, and insights generated from, decision theatre workshops.  Inter-generational equity and accounting In their review of accounting for intergenerational equity, Thomson et al. raise a number of challenges to accounting scholars and practitioners, in particular the need to account for the future social and environmental consequences of current decisions. Many of the characteristics of future accounting and accountability seem to be in conflict with the conventional attributes of accounting; evidence-based, objectivity, neutrality, reliability, comparability, comprehensiveness.  Inter-generational accounting could be viewed as a form of future work that involves speculations, considering imagined future scenarios, subjective predictions, working with uncertain and potentially unknowable information.  Accounting for equity also challenges conventional accounting rationality as accounting techniques need to incorporate subjective notions of equality, legitimate needs and social merit. Yet despite these challenges sustainability transformation requires accountants to confront these issues and innovate in order to provide robust, meaningful accounts of the future, translating reformer’s aspirations into knowledge appropriate to governance systems.     Directions for future research In addition to the research agendas presented in the main papers, and Thomson et al.’s review paper, directions for future research (and action) are presented in thought provoking debate papers and the new development piece included in the issue.  Freeman (pp.  ) cautions against reliance on scientific evidence to bridge the policy divide across the political spectrum and, instead, advocates greater understanding of differing positions taken by political actors.  Pemberton (pp.  ) points to governance concerns relating to the UK’s nuclear industry, urging debate to engender reform, while Adams (pp.  ) points to the untapped potential of Integrated Reporting by universities.  She argues that progress on value creation is dependent upon more systematic and imaginative thinking by universities, engagement between academic and operational staff, and less reliance on what she perceives as a flawed approach to ranking of research.  Dey and Gibbon’s  (pp.  ) new development paper calls for more academic research into the UK’s use of impact bonds on the funding and delivery of public services.  Although financial resource is available from private investors, an emphasis on short-term financial gains could potentially compromise on more fully engendering long-term social and environmental progress.    Taking into account the above, we envisage several promising routes for future research:  • First, academic researchers could take an active role in the development of tools with considerable potential to hybridise with accounting, accountability and regulatory techniques and, in so doing, assist in sustainable accountability and governance. However, more research is needed in the manner by which this hybridisation is manifested in different contexts and how the latter impacts on the hybrids’ effectiveness, especially where the hybrid has generic application (e.g. Global Reporting Initiative or Integrated Reporting). • Second, and related to the previous point, for accounting-sustainability hybrids to mediate between potential government policies on sustainability and actual PSO transformations, there must be an alignment between programmes and accounting (Thomson et al., 2014). Regulating sustainability accounting alone, without continual review of the programmatic, is unlikely to produce any meaningful effects in PSOs. Making progress on inter-generational equity requires enormous efforts to communicate and educate those charged with implementing change. For this reason we would argue that more research needs to be undertaken on locating exemplar cases where there is alignment between sustainability accounting as a mediating instrument and government programmatic policies that could bring about/have brought about actual PSO transformation.  • Third, academic researchers could also assist decision-makers in building capacity across networked organisations that have responsibilities for public services. Rather than anticipating technological or engineering advancements to solve environmental problems, research into collaborations between PSOs and other stake-holding entities could provide additional insights in how public management could assist in climate mitigation and adaptation.  • Fourth, academic researchers could engage with policy makers and practitioners on the challenges of incorporating inter-generational equity considerations into PSO governance, accounting and accountability. Aspects of inter-generational equity form part of the mission of many PSOs, yet integrating inter-generational equity into PSO accounting systems appears to be under-developed. Given that governing sustainably requires an accounting for the future consequences of contemporary decisions, there is considerable scope for further research into how to embed inter-generational equity into accounting systems   Compared to the for-profit sector, there is much less published research in the public sector on managing and accounting for sustainable development generally and intergenerational equity specifically.  We hope that papers in this themed issue of Public Money & Management serves to stimulate more debate between academics, policy makers and PSO decision-makers and motivates further research in the field. More understanding is required on the way in which accounting-sustainability hybrids could contribute to reducing social and environmental unsustainability and, in so doing, protect present and future generations. Cases that further exemplify the incorporation of sustainable development in the decision-making of PSOs could help in driving behavior and activity that extends beyond reliance on business case reasoning which privileges financial considerations.  References Ball, A. and Grubnic, S. (2007), Sustainability accounting and accountability in the public sector, in Unerman, J., Bebbington, J. and O’Dwyer, B. (Eds), Sustainability Accounting and Accountability, pp.243-265 (Routledge, London).  Ball, A., Grubnic, S. and Birchall, J. (2014), Sustainability accounting and accountability in the public sector, in Bebbington, J., Unerman, J. and O’Dwyer, B. (Eds), Sustainability Accounting and Accountability, pp.176-195 (Routledge: Oxon).  Broadbent, J. (2013), Editorial: Reclaiming the ideal of public service.  Public Money & Management, 33, 6, pp.391-394.  Gray, R., Adams, C.A. and Owen, D. (2014), Accountability, Social Responsibility and Sustainability: Accounting for Society and the Environment (Pearson: Harlow).   Grubnic, S., Thomson, I. and Georgakopoulos, G. (2015), Managing and accounting for sustainable development across generations in public service.  Public Money & Management, 35, 3, pp.245-250.  Thomson, I., Grubnic, S. and Georgakopoulos, G. (2014), Exploring accounting–sustainability hybridisation in the UK public sector. Accounting, Organizations and Society, 39, 6, pp. 453–476.  

Editorial: Managing and accounting for sustainable development across generations

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Editorial: Managing and accounting for sustainable development across generations

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