Ambiguity of financial environmental information

Matias Laine, Janne T. Järvinen, Timo Hyvönen and Hannele Kantola

Accounting, Auditing & Accountability Journal, 2017, vol. 30, issue 3, 593-619

Abstract: Purpose - Voluntary corporate social responsibility reporting has developed into an everyday activity for many commercial organizations, and scholarly interest in these practices continues to increase. This paper focusses on one subset of these disclosures, namely the figures relating to environmental expenditures and investments published by various organizations. The purpose of this paper is to provide insights into the nature, role and significance of such financial environmental information. Despite their seeming accuracy and preciseness, little is known about how such financial environmental information is constructed and subsequently used in organizational settings. Design/methodology/approach - The paper is based on a qualitative case study focussing on a Finnish energy company. The authors build the investigation primarily on 26 semi-structured interviews with employees at all organizational levels, which the authors supplement with various documentary sources. The interpretation draws on the notion of loose coupling, which the authors use as a method theory to provide a better understanding of this complex organizational practice. Findings - The authors highlight the ambiguous and imprecise nature of the outwardly accurate figures provided by the company. The authors argue that disclosed financial environmental information is only loosely coupled with various dimensions, including the organization’s actual activities, its environmental impacts and organizational decision making. Originality/value - The findings contrast with those of some prior research, which has considered financial environmental information highly valuable. As for broader implications, the paper discusses the accuracy of public records based on such ambiguous organizational figures.

Keywords: Case study; Environmental disclosures; Environmental expenditures; Environmental investments (search for similar items in EconPapers)
Date: 2017
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Citations: View citations in EconPapers (7)

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Persistent link: https://EconPapers.repec.org/RePEc:eme:aaajpp:aaaj-02-2015-1961

DOI: 10.1108/AAAJ-02-2015-1961

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