Recent developments in European social and environmental reporting and auditing practice - A critical evaluation and tentative prognosis

The past decade has witnessed a remarkable growth in the number of European companies reporting publicly on various aspects of their environmental and social performance. Whilst for many this has simply entailed providing fairly rudimentary, and generally qualitative, environmental and social performance information within the annual report, leading edge reporters have gone much further. For this latter group, predominantly, but not exclusively, large companies operating in ‘sensitive’ industrial sectors, the preferred means of dissemination has become the production on an annual basis of a substantial ‘stand alone’ report featuring copious quantitative, as well as qualitative, data. The reliability of such data is increasingly likely to be attested to by an external verifier. The paper reviews two strands of this development. Firstly, environmental reports which initially appeared on the scene in significant numbers in the early 1990’s, and secondly, ‘sustainability’ reports which evolved towards the end of that decade. Whilst due acknowledgement is made concerning the technical progress achieved in reporting, major reservations are expressed concerning the efficacy of these initiatives as a means of enhancing the public accountability of major corporations. A particular problem centres on the failure to ‘close the reporting loop’ in terms of introducing institutional reforms empowering stakeholders to utilise the information provided in order to hold corporate management accountable and thereby meaningfully influence decision making. The author: David Owen is Professor of Accounting at Sheffield University Management School. He gave this paper at the Inaugural Symposium of ICCSR on 25 October 2003 in Nottingham. Address for correspondence: Professor David Owen, The University of Sheffield Management School, 9 Mappin Street, Sheffield S1 4DT, United Kingdom, Email d.l.owen@shef.ac.uk

[1]  J. Moon,et al.  Can Corporations be Citizens? Corporate Citizenship as a Metaphor for Business Participation in Society , 2005, Business Ethics Quarterly.

[2]  Jan Bebbington,et al.  Accounting for the Environment , 1993 .

[3]  R. Gray,et al.  Corporate social reporting : accounting and accountability , 1987 .

[4]  J. Last.  Our common future. , 1987, Canadian journal of public health = Revue canadienne de sante publique.

[5]  R. Hoffmann,et al.  Industry Self‐Regulation: A Game‐Theoretic Typology of Strategic Voluntary Compliance , 2003 .

[6]  David Owen,et al.  QUESTIONING THE ROLE OF STAKEHOLDER ENGAGEMENT IN SOCIAL AND ETHICAL ACCOUNTING, AUDITING AND REPORTING , 2001 .

[7]  Tracey A. Swift,et al.  Trust, reputation and corporate accountability to stakeholders , 2001 .

[8]  John Elkington,et al.  Partnerships from cannibals with forks: The triple bottom line of 21st‐century business , 1998 .

[9]  R. Gray,et al.  Accounting and accountability : changes and challenges in corporate social and environmental reporting , 2003 .

[10]  R. Gray,et al.  External transparency or internal capture? The role of third‐party statements in adding value to corporate environmental reports1 , 2000 .

[11]  Marcellus Jones.  The Institutional Determinants of Social Responsibility , 1999 .

[12]  L. O’Malley,et al.  Hidden Mountain: the Social Avoidance of Waste , 2003 .

[13]  G. H. Brundtland.  World Commission on environment and development , 1985 .

[14]  R. Gray,et al.  Green Accounting: Cosmetic Irrelevance or Radical Agenda for Change? , 1997 .

[15]  C. Adams,et al.  Environmental, Employee and Ethical Reporting in Europe , 1995 .

[16]  Timothy ORiordan,et al.  On Corporate Social Reporting , 2000 .

[17]  C. Medawar.  The social audit: A political view , 1976 .

[18]  J. Shaoul.  CRITICAL FINANCIAL ANALYSIS AND ACCOUNTING FOR STAKEHOLDERS , 1998 .

[19]  L. Parker,et al.  Corporate Social Reporting: A Rebuttal of Legitimacy Theory , 1989 .

[20]  S. Zadek,et al.  Making values count : contemporary experience in social and ethical accounting, auditing, and reporting , 1998 .

[21]  A. Crane.  In the company of spies: The ethics of industrial espionage , 2003 .

[22]  D. Owen,et al.  The new social audits: accountability, managerial capture or the agenda of social champions? , 2000 .

[23]  C. Coupland.  Corporate identities on the web: An exercise in the construction and deployment of 'morality' , 2003 .

[24]  J. Elkington.  Cannibals with Forks , 1997 .

[25]  D. Owen,et al.  FIGHTING DE-INDUSTRIALISATION: THE ROLE OF LOCAL GOVERNMENT SOCIAL AUDITS. , 1987 .

[26]  T. Frank,et al.  One Market Under God: Extreme Capitalism, Market Populism, and the End of Economic Democracy. By Thomas Frank , 2001 .

[27]  D. Owen,et al.  Green reporting : accountancy and the challenge of the nineties , 1992 .

[28]  An Analysis of European Ethical Funds , 2001 .