Abstract
Nowadays businesses are often expected to create not just financial, but multiple kinds of value—and they report on this using numbers and narratives. Multiple-value accounting narratives, such as those required by the Integrated Reporting framework, are often met with suspicion: accounting scholars have argued that inconsistencies between narratives and performances show that narratives are used for impression management rather than to accurately report the (ir)responsible behavior of companies. This paper proposes to assess narratives beyond inconsistencies with reported performances. Starting from the idea that performances are delivered in response to the kinds of value in the situation of the company, we argue that narratives and performances should be analyzed together as interrelated elements and considered in relation to the kinds of value in the situation. The paper transforms the common consequentialist view on which value should be “increased,” into the value pluralist view that something being of value can require many different performances such as for example respecting, maximizing, admiring, maintaining, using, and bringing it about. From this perspective, multiple-value accounting narratives logically precede the reporting of performances and should identify the kinds of value in the situation to which the company ought to respond, which performances are required by these kinds of value, and which indicators and targets should be used to report on these performances. A brief analysis of the annual report of Unilever illustrates how such metaethical criteria can help assess and develop multiple-value accounting narratives.
This is a preview of subscription content, log in via an institution to check access.
Similar content being viewed by others
Notes
Metaethics is often considered to be the domain of philosophical analysis of the structure of ethical thought, communication, and action, and of how “the right” (“what one should do”) relates to “the good” (“what is of value”). Metaethical theory does not provide substantive normative guidance, but points out the structure of the thought, communication, and action that must be present in order to get started with ethics at all. There are different positions in meta-ethics and this paper builds on value pluralism in order to develop metaethical criteria that narratives must satisfy in order to arrive at valid ethical statements in narratives about reported performances.
We focus on < IR > rather than another guideline such as the GRI because < IR > explicitly highlights the role of narratives in addressing value creation. Moreover, the ramifications of the meaning of ‘value’ have been discussed substantively with regard to < IR > in the accounting literature. Of course the approach to value and narratives in this paper could also be applied to other multiple-value accounting frameworks.
Value pluralism should be distinguished from concepts such as ethical pluralism and political pluralism which highlight that different individuals/communities/peoples can hold different evaluative and/or normative views, and that we may neither find arguments within these views for prioritizing one view over the others, nor an Archimedean point from which to do this (see for instance Rawls, 1993). Value pluralism rather emphasizes the possibility that we encounter different and incomparable kinds of value—regardless of which ethical or political view we hold. Value pluralism is associated with ethical and political pluralism in that it can provide an explanation of how it is possible that we can hold different, equally reasonable, normative views: if we encounter different and incomparable kinds of value, then there may be different reasonable ways of engaging with them (Raz, 2003 see also below on the “underdetermination” of decisions by kinds of value). Moreover, value pluralism is not immune to ethical and/or political pluralism in that the thick concepts we employ in making sense of different kinds of value can get somewhat different contents depending on the societies in which they evolve (see also below).
This means that identifying kinds of value and the performances that are required must happen in discursive processes between business and stakeholders, which highlights the importance of “dialogic accounting” (Brown & Dillard, 2015). An accounting narrative that is published in an annual report and/or related documents can be seen as one step in an ongoing dialogic process with stakeholders – as one episode in the “giving and demanding of reasons for conduct” (Roberts & Scapens, 1985).
These narratives may also be different due to the cultural specificity of the contents of thick concepts and the underdetermination of courses of action by the kinds of value in the situation that give businesses the possibility to develop their identity in accounting narratives.
General standards such as the Global Reporting Initiative, and more specialized standards such as those of the Global Food Safety Initiative and the Science-based Targets Initiative provide definitions of indicators and sometimes also approaches to target setting. If companies rely on these standards, they will need to narratively justify the choice of standards, and how they tailor them to their situation. The existence of standards for indicators and targets also provokes the question as to if and how these standards should provide narrative justification for the indicators and target setting formulas they propose. This important topic is beyond the scope of the present paper.
References
Adams, C. A. (2002). Internal organisational factors influencing corporate social and ethical reporting: Beyond current theorising. Accounting, Auditing & Accountability Journal., 15(2), 223–250.
Adams, C. A. (2015). The international integrated reporting council: A call to action. Critical Perspectives on Accounting, 27, 23–28.
Adams, C. A. (2017). Conceptualising the contemporary corporate value creation process. Accounting, Auditing & Accountability Journal, 30(4), 906–931.
Adams, C. A. (2020). Sustainability reporting and value creation. Social and Environmental Accountability Journal, 40(3), 191–197.
Amnesty International. (2016). The great palm oil scandal: Labour abuses behind big brand names.
Anderson, E. (1995). Value in ethics and economics. Harvard University Press.
Andon, P., Baxter, J., & Chua, W. F. (2015). Accounting for stakeholders and making accounting useful. Journal of Management Studies, 52(7), 986–1002.
Barter, N. (2015). Natural capital: Dollars and cents/dollars and sense. Sustainability Accounting, Management and Policy Journal., 6(3), 366–373.
Beattie, V. (2014). Accounting narratives and the narrative turn in accounting research: Issues, theory, methodology, methods and a research framework. The British Accounting Review, 46(2), 111–134.
Bebbington, J., & Larrinaga, C. (2014). Accounting and sustainable development: An exploration. Accounting, Organizations and Society, 39(6), 395–413.
Bellantuono, N., Pontrandolfo, P., & Scozzi, B. (2016). Capturing the stakeholders’ view in sustainability reporting: A novel approach. Sustainability, 8(4), 379.
Blasco, J. L., & King, A. (2017). The road ahead: The KPMG survey of corporate responsibility reporting 2017. KPMG International.
Boiral, O. (2016). Accounting for the unaccountable: Biodiversity reporting and impression management. Journal of Business Ethics, 135(4), 751–768.
Bratman, M. E. (2014). Shared agency: A theory of acting and planning together. Oxford University Press.
Brown, J., & Dillard, J. (2014). Integrated reporting: On the need for broadening out and opening up. Accounting, Auditing & Accountability Journal, 27(7), 1120–1156.
Brown, J., & Dillard, J. (2015). Dialogic accountings for stakeholders: On opening up and closing down participatory governance. Journal of Management Studies, 52(7), 961–985.
Brunsson, N. (2002). The organization of hypocrisy: Talk, decisions, actions in organizations (2nd ed.). Abstrackt/Liber.
Calabrese, A., Costa, R., Levialdi, N., & Menichini, T. (2016). A fuzzy analytic hierarchy process method to support materiality assessment in sustainability reporting. Journal of Cleaner Production, 121, 248–264.
Chatterji, A. K., Durand, R., Levine, D. I., & Touboul, S. (2016). Do ratings of firms converge? Implications for managers, investors and strategy researchers. Strategic Management Journal, 37(8), 1597–1614.
Cho, C. H., Laine, M., Roberts, R. W., & Rodrigue, M. (2015). Organized hypocrisy, organizational façades, and sustainability reporting. Accounting, Organizations and Society, 40, 78–94.
Cho, C. H., Roberts, R. W., & Patten, D. M. (2010). The language of US corporate environmental disclosure. Accounting, Organizations and Society, 35(4), 431–443.
Christensen, L. T., Morsing, M., & Thyssen, O. (2013). CSR as aspirational talk. Organization, 20(3), 372–393.
Dancy, J. (1995). In defense of thick concepts. Midwest Studies in Philosophy, 20, 263–279.
Dancy, J. (2004). Ethics without principles. Oxford University Press.
Dancy, J. (2013). Practical concepts. In S. Kirchin (Ed.), Thick concepts (pp. 44–59). Oxford University Press.
Donaldson, T., & Walsh, J. P. (2015). Toward a theory of business. Research in Organizational Behavior, 35, 181–207.
Eccles, R. G., Krzus, M. P., Rogers, J., & Serafeim, G. (2012). The need for sector-specific materiality and sustainability reporting standards. Journal of Applied Corporate Finance, 24(2), 65–71.
Flower, J. (2015). The international integrated reporting council: A story of failure. Critical Perspectives on Accounting, 27, 1–17.
Freeman, R. E. (2010). Managing for stakeholders: Trade-offs or value creation. Journal of Business Ethics, 96(1), 7–9.
Freeman, R. E., Harrison, J. S., Wicks, A. C., Parmar, B. L., & De Colle, S. (2010). Stakeholder theory: The state of the art. Cambridge University Press.
Goetghebeur, M., & Wagner, M. (2017). Identifying value (s): A reflection on the ethical aspects of MCDA in healthcare decisionmaking. In Multi-criteria decision analysis to support healthcare decisions (pp. 29–46): Springer.
Gray, R. (2006). Social, environmental and sustainability reporting and organisational value creation? Whose value? Whose creation? Accounting, Auditing & Accountability Journal, 19(6), 793–819.
Gray, R. (2010). Is accounting for sustainability actually accounting for sustainability… and how would we know? An exploration of narratives of organisations and the planet. Accounting, Organizations and Society, 35(1), 47–62.
Gray, S. J. (1988). Towards a theory of cultural influence on the development of accounting systems internationally. Abacus, 24(1), 1–15.
Hahn, R., & Lülfs, R. (2014). Legitimizing negative aspects in GRI-oriented sustainability reporting: A qualitative analysis of corporate disclosure strategies. Journal of Business Ethics, 123(3), 401–420.
Harrison, J. S., & Wicks, A. C. (2013). Stakeholder theory, value and firm performance. Business Ethics Quarterly, 23(1), 97–124.
Heuer, U. (2004). Raz on values and reasons. In R. J. Wallace, P. Pettit, S. Scheffler, & M. Smith (Eds.), Reason and value: themes from the moral philosophy of Joseph Raz. Oxford University Press.
Hsieh, N.-H. (2007a). Is incomparability a problem for anyone? Economics and Philosophy, 23(01), 65–80.
Hsieh, N.-H. (2007b). Maximization, incomparability, and managerial choice. Business Ethics Quarterly, 17(03), 497–513.
IIRC. (2013). International integrated reporting framework.
IIRC. (2017). Creating value: CFO leadership in <IR>.
Jensen, M. C. (2001). Value maximization, stakeholder theory, and the corporate objective function. European Financial Management, 7(3), 297–317.
Jensen, M. C. (2008). Non-rational behaviour, value conflicts, stakeholder theory, and firm behaviour. Business Ethics Quarterly, 18(2), 167–171.
Keeney, R. L., & Raiffa, H. (1993). Decisions with multiple objectives: Preferences and value trade-offs. Cambridge University Press.
Kirchin, S. (2013). Introduction: Thick and thin concepts. In S. Kirchin (Ed.), Thick concepts. Oxford University Press.
Klamer, A. (2002). Accounting for social and cultural values. De Economist, 150(4), 453–473.
Korsgaard, C. (1993). The reasons we can share: An attack on the distinction between agent-relative and agent-neutral values. Social Philosophy and Policy, 10(1), 24–51.
Korsgaard, C. M. (1996). The sources of normativity. Cambridge University Press.
MacDonald, C., & Norman, W. (2007). Rescuing the baby from the triple-bottom-line bathwater: A reply to Pava. Business Ethics Quarterly, 17(1), 111–114.
Manetti, G., & Toccafondi, S. (2012). The role of stakeholders in sustainability reporting assurance. Journal of Business Ethics, 107(3), 363–377.
Martinez-Alier, J., Munda, G., & O’Neill, J. (1998). Weak comparability of values as a foundation for ecological economics. Ecological Economics, 26(3), 277–286.
McKeown, B., & Thomas, D. B. (2013). Q methodology. Sage Publications.
Melloni, G., Stacchezzini, R., & Lai, A. (2016). The tone of business model disclosure: An impression management analysis of the integrated reports. Journal of Management & Governance, 20(2), 295–320.
Messner, M. (2009). The limits of accountability. Accounting, Organizations and Society, 34(8), 918–938.
Michelon, G., Pilonato, S., & Ricceri, F. (2015). CSR reporting practices and the quality of disclosure: An empirical analysis. Critical Perspectives on Accounting, 33, 59–78.
Milne, M. J., & Gray, R. (2013). W (h) ither ecology? The triple bottom line, the global reporting initiative, and corporate sustainability reporting. Journal of Business Ethics, 118(1), 13–29.
Mitchell, R. K., Weaver, G. R., Agle, B. R., Bailey, A. D., & Carlson, J. (2016). Stakeholder agency and social welfare: Pluralism and decision making in the multi-objective corporation. Academy of Management Review, 41(2), 252–275.
Mol, A. (2010). Care and its values: Good food in the nursing home. Care in Practice on Tinkering in Clinics, Homes and Farms, 14, 215–234.
Moldan, B., Janoušková, S., & Hák, T. (2012). How to understand and measure environmental sustainability: Indicators and targets. Ecological Indicators, 17, 4–13.
Mousavi, S., & Garrison, J. (2003). Toward a transactional theory of decision making: Creative rationality as functional coordination in context. Journal of Economic Methodology, 10(2), 131–156.
Munda, G. (2004). Social multi-criteria evaluation: Methodological foundations and operational consequences. European Journal of Operational Research, 158(3), 662–677.
Norman, W., & MacDonald, C. (2004). Getting to the bottom of" triple bottom line". Business Ethics Quarterly, 15, 243–262.
Orij, R. (2010). Corporate social disclosures in the context of national cultures and stakeholder theory. Accounting, Auditing & Accountability Journal., 23(7), 868–889.
Pava, M. L. (2007). A response to “Getting to the Bottom of ‘Triple Bottom Line.’” Business Ethics Quarterly, 17(1), 105–110.
Putnam, H. (2002). The collapse of the fact/value dichotomy: And other essays. Harvard University Press.
Putnam, H. (2003). For ethics and economics without the dichotomies. Review of Political Economy, 15(3), 395–412.
Rawls, J. (1971). A theory of justice. Belknap Press.
Rawls, J. (1993). Political liberalism. Columbia University Press.
Raz, J. (2003). The practice of value. In R. J. Wallace (Ed.), The practice of value (pp. 15–59). Oxford University Press.
Reuter, M., & Messner, M. (2015). Lobbying on the integrated reporting framework: An analysis of comment letters to the 2011 discussion paper of the IIRC. Accounting, Auditing & Accountability Journal, 28(3), 365–402.
Rinaldi, L., Unerman, J., & De Villiers, C. (2018). Evaluating the integrated reporting journey: Insights, gaps and an agenda for future research. Accounting, Auditing & Accountability Journal, 31(5), 1294–1318.
Roberts, J., & Scapens, R. (1985). Accounting systems and systems of accountability—understanding accounting practices in their organisational contexts. Accounting, Organizations and Society, 10(4), 443–456.
Roslender, R., & Nielsen, C. Lessons for progressing narrative reporting: Learning from the experience of disseminating the Danish Intellectual Capital Statement approach. In Accounting Forum, 2017 (Vol. 41, pp. 161–171, Vol. 3): Elsevier
SBTi. (2018). Science based targets. https://sciencebasedtargets.org/.
Scanlon, T. M. (1998). What we owe to each other. Belknap Press of Harvard University Press.
Schaltegger, S., Etxeberria, I. Á., & Ortas, E. (2017). Innovating corporate accounting and reporting for sustainability–attributes and challenges. Sustainable Development, 25(2), 113–122.
Searcy, C. (2012). Corporate sustainability performance measurement systems: A review and research agenda. Journal of Business Ethics, 107(3), 239–253.
Schweiker, W. (1993). Accounting for ourselves: Accounting practice and the discourse of ethics. Accounting, Organizations and Society, 18(2–3), 231–252.
Sen, A. (1999). Development as freedom. Oxford University Press.
Steuer, R. E., & Na, P. (2003). Multiple criteria decision making combined with finance: A categorized bibliographic study. European Journal of Operational Research, 150(3), 496–515.
Stolowy, H., & Paugam, L. (2018). The expansion of non-financial reporting: An exploratory study. Accounting and Business Research, 48(5), 525–548.
Sundaram, A. K., & Inkpen, A. C. (2004). The corporate objective revisited. Organization Science, 15(3), 350–363.
Unilever. (2015). Unilever framework for fair compensation.
Unilever. (2017). Sustainable agriculture code 2017.
Unilever. (2018a). 2017 Annual report and accounts.
Unilever. (2018b). Fair compensation. https://www.unilever.com/sustainable-living/enhancing-livelihoods/fairness-in-the-workplace/fair-compensation/. Accessed 12 December 2018b.
Unilever. (2018c). Unilever sustainable living plan: three year report of progress.
van der Linden, B., & Freeman, R. E. (2017). Profit and other values: Thick evaluation in decision making. Business Ethics Quarterly, 27(3), 353–379.
van der Wal, S. (2011). Certified Unilever tea: Small cup, big difference? SOMO.
Wallace, R. J. (2009). The publicity of reasons. Philosophical Perspectives, 23, 471–497.
Wallace, R. J. (2014). Reasons, policies, and the real self. Bratman on identification. Rational and Social Agency, 15, 106–128.
Williams, B. (1985). Ethics and the limits of philosophy. Cambridge University Press.
Wilshaw, R., Unger, L., Chi, D. Q., & Thuy, n. P. T. (2013). Labour rights in Unilever's supplychain: From compliance towards good practice: An Oxfam study of labour issues in Unilever’s Viet Nam operations and supply chain. Oxfam.
World Resource Institute. (2018). Science based targets initiative. http://www.wri.org/our-work/project/science-based-targets-initiative.
Author information
Authors and Affiliations
Corresponding author
Ethics declarations
Conflict of interest
The authors have no relevant financial or non-financial interests to disclose. The authors have no conflicts of interest to declare that are relevant to the content of this article. All authors certify that they have no affiliations with or involvement in any organization or entity with any financial interest or non-financial interest in the subject matter or materials discussed in this manuscript. The authors have no financial or proprietary interests in any material discussed in this article.
Additional information
Publisher's Note
Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.
Rights and permissions
Springer Nature or its licensor (e.g. a society or other partner) holds exclusive rights to this article under a publishing agreement with the author(s) or other rightsholder(s); author self-archiving of the accepted manuscript version of this article is solely governed by the terms of such publishing agreement and applicable law.
About this article
Cite this article
van der Linden, B., Wicks, A.C. & Freeman, R.E. How to Assess Multiple-Value Accounting Narratives from a Value Pluralist Perspective? Some Metaethical Criteria. J Bus Ethics (2023). https://doi.org/10.1007/s10551-023-05385-1
Received:
Accepted:
Published:
DOI: https://doi.org/10.1007/s10551-023-05385-1