Carlos Larrinaga

Corporate social reporting and reputation risk management

Purpose - The purpose of this paper is to explore the proposition that corporate social responsibility reporting could be viewed as both an outcome of, and part of reputation risk management processes. Design/methodology/approach - The paper draws heavily on management research. In addition, an image restoration framework is introduced. Findings - The concept of reputation risk management could assist in the understanding of corporate social responsibility reporting practice. Originality/value - This paper explores the link between reputation risk management and existing theorising in social accounting.

The Role of Environmental Accounting in Organizational Change: An Exploration of Spanish Companies

Critique originated by earlier theorization of environmental accounting, as a way of building environmentalist visibility of business, led Gray et al., to study environmental accounting in the dynamics of organizational change. They concluded that environmental accounting is being used to “negotiate the conception of the environment” by companies that have not significantly changed. In order to investigate whether Gray et al.’s model and conclusions apply to a different cultural context, we have conducted nine case studies in Spain. We found that Spanish organizations are not truly changing their conventional perception of the environment, even in those cases where generalized structural and organizational changes are taking place. Moreover, the use of environmental accounting is coupled with an attempt to negotiate and control the environmental agenda.

Accountability and accounting regulation: the case of the Spanish environmental disclosure standard

Mandatory environmental reporting has been seen as a way of increasing accountability of organizations, regarding environmental issues. This paper is concerned with one standard, which requires all the Spanish companies to include environmental disclosures in their financial statements. From the survey of the rationale of the disclosure requirements we suggest that more sound environmental initiatives are obscured by an end-of-pipe emphasis. Additionally, from the research of the reporting activity of a sample of companies a low compliance level results, with roughly 80% of companies not providing any environmental information. In addition, those companies who are reporting some environmental information neglect those aspects of the regulation that are not in their interests to report. The interpretation of these findings, using the theoretical distinction between administrative and institutional reforms, leads us to conclude that the Spanish standard on environmental disclosure is insufficient to enable new accountability relationships and to empower stakeholders.

Social disclosure, legitimacy theory and the role of the state

Purpose - The principal objective of this paper is to expand the scope of legitimacy theory (LT) through a detailed analysis of the links that exist between the legitimising strategies of firms and the characteristics of the political environment in which they are developed. Designs/methodology/approach - A discourse analysis was performed on the social and environmental disclosure (SED) of a multinational in the automotive sector with an established presence in Spain, in the context of the relational dynamics between the firm/society/state. Different channels of information were compared to capture both the official discourse as represented in the annual reports of the multinational and the discourse of employees and the State as represented in the media. Findings - The results of the research show that the firm under study used SED strategically to legitimise a new production process through the manipulation of social perceptions, and that this strategy was supported implicitly and explicitly through ideological alignment with the State. Research limitations/implications - Despite a widely-held assumption of a pluralist political context, the State is presented here as aligning itself with corporate management as opposed to the welfare concerns of employees. Thus, future research calling for regulation of SED should preface such calls with consideration of the orientation of the State. Originality/value - In contrast with the dominant approach to LT that considers the relationship of the firm with its stakeholders, the present study widens the scope of LT to consider the interplay between firm legitimating strategies and state support for such strategies.

Environmental Disclosure in Spain: Corporate Characteristics and Media Exposure

ABSTRACT Social and environmental issues have become a major concern for accounting research over the past two decades. Social and Environmental Accounting has attracted the attention of a number of researchers attempting to understand, explain and predict the disclosure of information on the social and environmental implications of business activities. Empirical research has hypothesized that size, profitability and the potential environmental impact of the firm are the main factors explaining the amount of information disclosed. On the other hand, several studies have focused on the motivations for disclosing environmental information, hypothesizing that disclosures are aimed at building or sustaining corporate legitimacy. We test the main hypotheses developed to date by empirical research with regard to the disclosure of environmental information based on a sample of companies listed on the Madrid Stock Exchange. Results of a content analysis show that firms disclosing environmental information tend to be larger, have higher risk (measured by the beta coefficient) and operate in industries that have a high potential environmental impact. The environmental implications of the activities carried out by these companies also seem to receive more attention from print media. Our results also provide evidence that two factors directly associated with the amount of environmental information disclosed are the potential environmental impact of the industry and the extent of media coverage of the firms.

Sustainability Accounting and Accountability in Public Water Companies

This article analyses the ways that Spanish public water companies communicate sustainability information to their stakeholders and explores whether distinctive and more progressive accountability is possible in the public sector in comparison with private sector organizations. Two distinct activities are identified in sustainable accountability: public organizations are engaged in informal as well as formal reporting activity, and their reporting seems to be coupled with real organizational strategies and operational activities.

Putting Carbon Markets into Practice: A Case Study of Financial Accounting in Europe

In this paper we explore how carbon markets have entered the world of financial accounting. The advent of the European Union Emissions Trading System (EU ETS) in 2005 provided the opportunity for global climate change concerns to be translated from policy into something that could, and should, be recognised within financial accounting. That is, the EU ETS provided a mechanism whereby greenhouse gas emission allowances acquired a financial value, simultaneously creating an obligation (or liability) on certain European organisations when they emit greenhouse gases. Prima facie, this process created the need for financial accounts of companies covered by the EU ETS to reflect the new commodity of carbon. Disagreement amongst accountants about how to treat emission allowances has arisen, with the initial international accounting guidance issued in late 2004 subsequently being withdrawn, and not yet replaced. Taking this absence of guidance as a starting point, we undertake an empirical project (through a survey, consultation analysis, and interviews) to establish what financial reporting practices are being adopted by participants in the EU ETS, and the level of momentum for standardisation. We draw on sociological theories about accounting, measurement, and markets.

The emergence of triple bottom line reporting in Spain

ABSTRACT The emergence of triple bottom line reporting by organizations in Spain is the context in which the present work have tried to understand the influence of both external and internal contexts on social and environmental disclosures. The material for this study is drawn from semi-structured interviews with 30 managers of 20 Spanish organizations with responsibility for the preparation of TBL reports. The narratives provided by the interviewees suggest that internal (organizational and individual) and external contexts are both important in the explanation of social and environmental disclosure practices. One of the studys main findings is that certain assemblages of external and internal influences exist that can either enhance or inhibit the development of TBL reports.The aim of this paper is to have a better understanding of the influence of both external and internal contexts on social and environmental disclosure made by organizations, focusing on the emergence of triple bottom line reporting in Spain. More specifically, this study is based in semi-structured interviews with 30 managers of 20 Spanish organizations involved in the preparation of TBL reports. The narratives provided by the interviewees suggest that the internal (organizational and individual) and external context, is important in the explanation of social and environmental disclosure practices. One of the main findings of the study is the existence of certain assemblages of external and internal influences which could be enhancing or inhibiting the development of the TBL reports in the Spanish context.

Cost and Management Accounting in Pre-Industrial Revolution Spain

In traditional Anglo-Saxon accounting historiography the birth of sophisticated management accounting practices was dated at the end of the 19th century [Jonhson and Kaplan, 1987]. However, some more recent investigations have questioned this idea and demonstrate the existence of sophisticated management accounting and control techniques before the industrial revolution in differing contexts such as the United Kingdom, the United States and Spain. Fleischman and Parker [1991] have demonstrated that these practices were present in a significant number of British companies. However, evidence for Spain is based on isolated case studies. While case studies are essential to explain how these techniques were used, there has been no research to assess their frequency in Spain before the industrial revolution. By examining files concerning 13 large and medium-sized 18th century Spanish companies, this paper corroborates Fleischman and Parkers [1991] thesis. It reveals that knowledge of sophisticated cost account...

Engagement research in social and environmental accounting

Purpose – The purpose of this paper is to consider the potential of engagement research by exploring the literature on engagement research. Engagement research in social and environmental accounting (SEA) aims to enhance the social, environmental and ethical accountability of organizations and conceives that understanding SEA demands engaging with the (social and organizational) fields in which SEA is envisaged and practiced. Design/methodology/approach – In this respect, the paper suggests a dialogue between the expectations about engagement research and what has been delivered in the literature. This paper reviews 32 articles publishing engagement research studies to explore the methodology of engagement research. Findings – The paper concludes that this methodology is consistent with notions of research in the context of application and extended peer-review communities. Further, this study shows a promising cross-fertilization between interpretive insight and critical enlightenment in engagement resear...