Paradigm shift or shifting mirage? The rise of social and environmental accountability

Jill Atkins and Karen McBride

Chapter 8 in Handbook of Accounting, Accountability and Governance, 2023, pp 168-194 from Edward Elgar Publishing

Abstract: Climate change and crisis have raised awareness throughout the world towards the wider stakeholders in business, bringing accountability for environmental and social issues to the fore. Climate impacts are now a key aspect of many companies' strategic decisions and management objectives. While some argue that the traditional drivers of business and of accountability to investors are the primary concerns of companies, with profit and other financial priorities top of the agenda, we argue that the risks of climate change are so fundamental to companies' success that they need to be included. The success of socially responsible, green investments would indicate that many investors agree. Indeed, the growing demand from the responsible investment community for enhanced, comparable and consistent reporting in the social and environmental area is driving improvements in both quality and quantity of such reporting. For accounting, accountability and governance, blending both social and environmental matters with traditional financial measures is the necessary approach. New developments in the area reflect heightened risks in the natural world from habitat and species loss, which engender the rapid development of biodiversity reporting frameworks and the evolution of extinction accounting. The growing prominence of dual materiality necessitates social and environmental corporate accountability based on financial materiality of these issues, as well as the need to discharge accountability for impacts. These emerging issues are discussed in the chapter with reflections on future trajectories of reporting, governance and accountability.

Keywords: Business and Management; Economics and Finance (search for similar items in EconPapers)
Date: 2023
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