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The Many Merits and Some Limits of Social Accounting

Why Disclosure Is Not Enough

  • Living reference work entry
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Handbook on Ethics in Finance

Part of the book series: International Handbooks in Business Ethics ((IHBE))

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Abstract

This chapter explores the potential and limitations of Social Accounting, a much relevant discussion in the context of a book about Ethics in Finance. This chapter intends to introduce some of the ongoing discussions around Social Accounting to scholars from other disciplines. There is no intention of presenting an exhaustive picture of Social Accounting, and the choice of literature has been narrowed to those issues more relevant for Ethics in Finance.

The chapter presents a short introduction to Social Accounting and its recent history. Then, there is an exploration of five issues that may interest a general academic audience: first, the reasons and purpose of corporate disclosure of social and environmental information, being that this kind of disclosure is usually not mandatory; second, the current discussion about regulation in this field, whether regulation of Social Accounting contributes to Sustainability or not; third, an introduction to the use of Social Accounting for internal purposes, that is, information not disclosed to external parties but used instead by management for decision-making; fourth, the link between Social Accounting and financial performance; and finally, the promise of Social Accounting to contribute to Sustainability.

Some of the main ideas are as follows. There is a tension between companies, which possibly do not share all social and environmental information, and stakeholders, who would expect higher transparency. Thus, we should not assume that companies naively disclose social and environmental information. Then, regulation for social reports could help to increase the quality of reports, but some studies show that regulation by itself will not automatically improve disclosure. Additionally, studies in managerial accounting emphasize the complexity of working with social and environmental indicators. Thus, it is possible that managers struggle to collect and make sense of information about all the social and environmental impacts of their firm. Furthermore, the link between sustainability and financial performance remains elusive. Finally, we should be aware of what Social Accounting can deliver (and what it cannot do) in terms of organizational change. Consequently, practitioners should not refrain from using complementary tools from other disciplines. Overall, Social Accounting can contribute in a consistent way to the improvement of corporate sustainability. In that sense, Social Accounting is an increasingly important tool for both managers and stakeholders.

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Author information

Authors and Affiliations

  1. Accounting and Management Control Department, ESSEC Business School, Paris, France

    Adrian Zicari

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  1. Adrian Zicari
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Correspondence to Adrian Zicari .

Editor information

Editors and Affiliations

  1. ECRI Ethics in Finance Research Group, University of the Basque Country, Bilbao, Spain

    Leire San-Jose

  2. ECRI Ethics in Finance & Social Value, Deusto Business School, Bilbo, Vizcaya, Spain

    José Luis Retolaza

  3. University of Antwerp, Antwerpen, Belgium

    Luc van Liedekerke

Section Editor information

  1. Faculty of Applied Economics, University of Antwerp, Antwerpen, Belgium

    Luc Van Liedekerke

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Zicari, A. (2020). The Many Merits and Some Limits of Social Accounting. In: San-Jose, L., Retolaza, J.L., van Liedekerke, L. (eds) Handbook on Ethics in Finance. International Handbooks in Business Ethics. Springer, Cham. https://doi.org/10.1007/978-3-030-00001-1_14-1

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  • DOI: https://doi.org/10.1007/978-3-030-00001-1_14-1

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  • Print ISBN: 978-3-030-00001-1

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