corporate social impacts.pdf

7/28/2019 Corporate social impacts.PDF

1/29

THE IDENTIFICATION,

MEASUREMENT, AND REPORTING OF

CORPORATE SOCIAL IMPACTS: PAST,

PRESENT, AND FUTURE

Marc J. Epstein

ABSTRACT

This paper provides a review of the progress made in both academic literature

and corporate practice over the last forty years. Although there has been an

increase in the number of companies producing social and environmentalreports, the quality of the disclosures has not increased. Further, there is little

evidence of progress in the integration of social and environmental impacts

into management decisions. The paper provides suggestions on research

needs to increase the integration of social and environmental impacts into

management decisions and improve both the internal reporting and external

disclosures and accountability of corporations.

INTRODUCTION

In recent years there has been a proliferation of academic and managerial

publications concerned with the subject of social reporting and the integration of

social, environmental, and economic impacts into managerial decision-making.

This trend parallels a similar surge of interest in social accounting during the

Advances in Environmental Accounting and Management

Advances in Environmental Accounting and Management, Volume 2, 129

Copyright 2004 by Elsevier Ltd.

All rights of reproduction in any form reserved

ISSN: 1479-3598/doi:10.1016/S1479-3598(03)02001-6

1


2/29

2 MARC J. EPSTEIN

1970s; it reflects a renewed academic and corporate concern for principles

of corporate social responsibility. To the potential detriment of its longevity,however, this sense of responsibility has not as yet been fully integrated into

corporate decision-making. In the 1970s this lack of integration resulted in a

failure to bring about enduring and substantive social impacts. Thus, the present

context begs the question: Will the current discourse engender lasting changes in

corporate action or will these progresses simply dissipate as in the 1970s?

This paper reviews and reflects on the development, current state of the art, and

future prospects for the identification, measurement, and reporting of corporate

social impacts. It provides insights into the developments that occurred over

the last four decades, describing the path that social accounting1 has taken and

examining the reasons for that path. It investigates the organizational barriers

that were created and the impacts of the organizational environment on social

accounting development. Additionally, a research and management program to

improve the implementation of social accounting in corporations is provided.

This investigation is based on reviews of both the academic and managerial

literature and extensive field research by the author throughout this period. Other

recent reviews of the development of social accounting include Mathews (1997),

Woodward (1998), and Gray (2001).

This paper is also based on the authors extensive involvement in the develop-

ment of social accounting in both academia and business over the last thirty years

in both the United States and Europe. Though I have engaged in an earnest attempt

to be objective, my extensive involvement has certainly impacted my views of

these developments. Though beginning my research in the area in the late 1960s

and writing in the early 1970s, my role as both an external consultant and as a full

time employee as Director of Social Measurement Services at Abt Associates,

Inc. during the 1970s has certainly impacted my understanding of the early

developments. Abt Associates, as discussed later in this paper, produced social

audits for their own annual reports and for both internal and external reports for

many clients. I was involved in most of those activities and directed the social auditefforts. I have also been involved in research and consulting in the identification,

measurement, and reporting of social, environmental, ethical, and economic

impacts in for profit and not-for-profit entities for more than thirty years with both

North American and European based companies. My books and articles (some of

which are referenced in this paper) reflect some of my thoughts and experience

along with reporting on extensive field, survey, and other research. Though much

of the popular press has suggested that the increased social disclosures reported

by companies is significant, I see little evidence that in many cases it is much more

than public relations or that it has fundamentally changed the organizations cul-ture, concern for social issues, and social performance. Further, though European


3/29

The Identification, Measurement, and Reporting of Corporate Social Impacts 3

based companies have a higher level of social disclosures than North American

companies, I have seen little evidence that they integrate social and environmentalimpacts into either operational management or capital investment decisions to any

greater extent. Globalization and the global capital markets have caused the con-

cern for shareholder value to be preeminent. Companies are focused on short term

earnings to meet financial markets expectations and many companies are reluctant

to invest in social and environmental improvements that have a speculative long

term gain when other investments have a more identifiable short term profit. Social

and environmental managers have largely been unsuccessful in convincing their

leaders that there is a payoff from social investments especially when budgets

are tight. Neither academic researchers nor corporate managers have provided

Fig. 1. The Stages of Evolution in Social Accounting.


4/29

4 MARC J. EPSTEIN

enough compelling measurements, analysis, and justifications to convince CEOs

to allocate the necessary funds to make significant improvements in corporatesocial performance.

Although many observers have presented optimistic views of current devel-

opments in corporate social accounting (ACCA, 2001; Watts & Holme, 1999),

others in increasing numbers are concerned whether the changes in corporate

culture and disclosure are (a) institutionalized and (b) likely to be maintained.

This paper recommends caution for those optimistic views, arguing that despite an

increase in the quantity of companies that provide social disclosures, the quality

of those disclosures has not improved, nor have companies integrated social and

environmental information into managerial decision-making or institutionalized

it sufficiently to change corporate culture. Ultimately, then, increased social

disclosures may have improved corporate accountability but may not have

improved social and environmental performance. Using an historical perspective,

this paper analyzes both recent and prior developments from 1960 to the present,

which can be broken down into five stages (Fig. 1).

THE DEVELOPMENT, DECLINE, AND REVIVAL OF

SOCIAL ACCOUNTING: ACADEMIC AND CORPORATE

CONTRIBUTIONS IN THE 1960s, 1970s, 1980s, AND 1990s

Stage 1 19601969 Antecedents of Social Accounting

During this stage, the focus in both academic research and managerial practice was

primarily on the evaluation of government sponsored social programs and their

contributions to social welfare. Social science measurement techniques, including

those developed for the evaluation of military efficacy, were refined and applied to

social programs. This was accompanied by increased academic and government

emphasis on both the efficiency and effectiveness of government spending (Dunlap& Catton, 1979). Attempts to broadly define and measure the growth and improve-

ment in societal wealth and welfare were often included in discussion under the

rubric of social accounting (Terleckyj, 1970; U.S. Dept of H.E.W., 1970).

This occurred within a context of significant community pressures and protests

of various corporate and government activities. Corporations were challenged on

issues such as the manufacture of weapons, environmental emissions, civil and

human rights practices, community contributions, and employee diversity (Boyer,

1984; Hammond, 1987). The role of corporations in society became an issue of

concern, and corporate leaders began making it an important point of discussion.Incongruously, significant discussion did not equate to significant action, despite


5/29


the development of many tools for implementation of programs intended to ensure

corporate social responsibility (Wilson, 2000).

Stage 2 19701977 Birth and Initial Development of Social Accounting

Many of the current developments in social accounting can be largely attributed to

the contributions of Ray Bauer, a Harvard management professor, and Dan Fenn,

who coauthored The Corporate Social Audit (1972). Their work was based on

extensive field research on the implementation of corporate social responsibility

and the development of social audits. Also contributing to the genesis of the field

were John Corson and UCLA professor George Steiner, who wrote Measuring

Businesss Social Performance: The Corporate Social Audit(1974), a book based

on a survey of corporate activities focused on evaluating social performance.

Academic researchers and practicing accountants were also involved in the

early developments of the field. The American Institute of Certified Public

Accountants conducted a seminar on social measurement. Following the seminar,

the institute formed a committee to investigate the potential role of accountants

in the further development and evolution of social accounting. The committees

report The Measurement of Corporate Social Performance: Determining the

Impact of Business Actions on Areas of Social Concern (1977) presented exten-

sive material on both measurement and reporting of social impacts, including

areas such as customers, environment, nonrenewable resources, suppliers, and

employees. It examined objectives, measures, and data collection. The American

Accounting Association also established and published works related to the topic

(AAA, 1975, 1976).

The National Association of Accountants supported a field research study that

examined social accounting at General Electric, First National Bank of Minneapo-

lis, and Atlantic Richfield (Epstein et al., 1977b). The research also included a

survey of corporate activities in this area and was part of a series of three studiessponsored by the NAA that also included an environmental study (Nikolai, Bazley

& Brummet, 1976) and a human resources study (Caplan & Landekich, 1974).

Other accounting academics and practitioners were also working on the

development of models for the measurement of corporate social impacts. Estes

(1973, 1976), Seidler and Seidler (1975), Linowes (1972, 1974), Epstein et al.

(1977a, b), Dierkes and Bauer (1973), and Dierkes and Preston (1977) all provided

early contributions with field studies, theoretical classifications, measurement

frameworks, and reporting formats. Reports of both survey and field research in

the application of social accounting to product and service contributions werereported in Epstein et al. (1977b).


6/29

6 MARC J. EPSTEIN

In addition, numerous corporations advanced the development of social account-

ing by implementing it within their companies. Most notable among these wereAbt Associates, First National Bank of Minneapolis, Eastern Gas & Fuel, Scovill

Manufacturing, First Pennsylvania Bank, and Phillips Screw (see Epstein et al.,

1976, 1977a, b). During this stage, much of the methodology for the social audit

was developed, and over 100 such audits were conducted, many in consultation

with Cambridge, Massachusetts based social science research and consulting firm,

Abt Associates, Inc. In a few cases, complete social income statements and balance

sheets were constructed. More often, data was aggregated to improve managerial

decisions in a particular context, rather than attempting to fit it into a standard

reporting format. Since the reports were customized for clients, some reports were

distributed externally but more often they were for internal management evalu-

ations only or for use with particular stakeholder groups. Many were developed

for specific purposes, such as communicating more effectively with certain stake-

holders and aiding managers with particular decisions. These included evaluations

of potential facility locations and the impact of plant closure on community well-

being, as well as the evaluation of product labeling practices, employee benefit

programs, and the value of company products and services to the community. The

reports also examined issues related to management control systems that could

be used to systematize social responsibility in ways that might substantively link

strategy to action.

Social accounting was the mechanism by which senior executives intended

to implement various strategies for social responsibility. During this stage, new

techniques for measurement were developed and others from the social sciences

were adapted, refined, and applied to the evaluation of corporate social impacts.

Many of the techniques, based on economic, sociometric, and psychometric

approaches, are still used today to evaluate the impacts of corporate products,

services, processes, and activities on a companys various stakeholders.

One of the most important developments was the work completed in the

early 1970s at Abt Associates. Abt utilized a constituent impact approach toconstruct social income statements and social balance sheets for inclusion in

its own corporate annual report and for many of its clients. Client social audits

included evaluations of corporate social programs, broad evaluations of corporate

social impacts, and evaluations of the impacts of both profit and not-for-profit

organizations on society. Also, these social audits often included evaluations of

the impacts of products, services, corporate social programs, and of corporate

philanthropy.2

The social audit that was included in Abt Associates, Inc.s corporate annual

reports in the early 1970s focused on reporting the impact of the company onits various stakeholders including employees, customers, the community, and


7/29


shareholders (Epstein et al., 1976). All items were reported in monetary terms

and in a balance sheet and income statement format with extensive footnotes toprovide details on the measurements used for each of the line items.

The social balance sheet included a subtraction of social liabilities from social

assets to calculate societys equity in the social resources of the company.

The social income statement reflected a netting of the social benefits and social

costs of the companys activities on society. Abts reports also made progress by

calculating the financial returns on social investments patterned after traditional

corporate return on investment calculations. These practices reflected the com-

panys belief that the financial earnings of the company are the result of both its

financial and social assets.

The academic literature in management also made progress in the identification

and measurement of social and environmental impacts. Post and Epstein (1977)

developed a framework for the development of a social accounting information

system capable of continuous identification and monitoring of actual social

demands and public expectations.

One of the more interesting European implementations of social accounting was

the 1976 report by Grojer and Stark (1977) of the social performance of Swedish

based Fortia Group. The authors discussed both the theoretical underpinnings

of the model and a description of the implementation. Like the Abt report in the

U.S., the Fortia report looked at constituent impacts and examined the return that

various stakeholders (including employees, shareholders, and the community)

received from the company. In addition to the monetary measurements, the

authors included descriptive discussions of those items they believed could not or

should not be measured in monetary units. Consequently, unlike Abt, they were

unable to calculate a social profit and loss. Nonetheless, the disclosures were

substantial and provided more information than is typical of company reports

today.

Stage 3 19781986 Decline of Social Accounting

During this period, government and businesses became increasingly focused

on economic prosperity, relegating social concerns to the periphery. Thus, there

was a lull in both academic development and corporate implementation (Purser

et al., 1995). Those few still making progress discovered the transience of

non-institutionalized changes as CEOs quickly eliminated programs, a purge

reflecting both a primarily profit-driven corporate temperament and a failure

to operationally integrate social accounting within corporate culture. Withoutinstitutionalized practices and protocol, social responsibility derives sustenance


8/29

8 MARC J. EPSTEIN

from corporate focus, and when that focus shifted to profitability, preservation of

these concerns could no longer be ensured. By early in this stage, the regressionwas so complete as to leave almost no evidence of social accountings progresses.

Both academia and business seemed to have lost interest. Not until concern

for improved management of corporate environmental costs increased did

environmental accounting again become of significant interest (Bennett & James,

1998a; Epstein, 1996b; Parker, 2000a, b).

Also, external support and demand for information on environmental and social

impacts declined, and by consequence, companies perceptions of the need for

additional accountability to the public also declined. There was no systematic

and organized measurement and reporting framework developed that would

provide continuous support and acceptance of social accounting and no grassroots

support for the external reporting of social impact information by external stake-

holders. Thus, with insufficient internal impetus and waning external demand

for the continued supply of information, corporate interest in the identification,

measurement, and reporting of environmental and social impacts subsided.

In academia, social accounting was not accepted as a discipline by the

academic establishment, thereby depriving institutional support to those who

would contribute research but needed to obtain tenure and promotion at their

institutions. Not until the development in 1976 and increasing importance of

Accounting, Organizations, and Society was there a respected outlet for research

contributions in this area. Also, due to the decline in industrial support, some

researchers lost sites for field visits and data for empirical studies.

Stage 4 19871998 Revival of Interest in Social Accounting

Although a marked burgeoning within the environmental movement may be

traced to the first Earth day in 1970 (Dunlap & Catton, 1979; Freudenberg,

1986), it was not until the late 1980s that social and environmental accountingcame again to the forefront. Significant environmental regulations enacted in

the 1980s in conjunction with increased enforcement made companies recognize

substantial environmental liabilities on their financial statements and required

large expenditures for remediation of prior emissions. Numerous publications

in both the academic and managerial press revealed the benefits of preventing

negative environmental impacts rather than dealing with clean-up costs and fines

(Berry & Rondinelli, 1998; Neu et al., 1998).

In 1996, a major research study reporting the state of the art and best practices

of corporate environmental management and accounting was published. EntitledMeasuring Corporate Environmental Performance: Best Practices for Costing and


9/29


Managing and Effective Environmental Strategy, the book reported the findings

of the largest field research study ever conducted in this area (Epstein, 1996b).

3

Although the study included a review of external reporting and auditing, it focused

on the internal corporate systems and culture conducive to the implementation of

effective social and environmental impact management strategy, structures, and

systems. This book and numerous other contemporaneous developments directed

attention to the field of social and environmental accounting, effecting its addition

within the mainstream discourses of both managers and academics. Discussions

about the ways in which social responsibility issues might be integrated within

existing accounting and control systems and the appropriate breadth of stake-

holder concerns included in the management decision-making process followed.

Together, increased environmental regulation, mounting pressure from internal

and external stakeholders, and a variety of both cost and revenue imperatives

brought corporate environmental responsibility to the attention of managers and

researchers alike.

Professional accounting associations, academics, and other non-profit orga-

nizations and industry associations also made significant contributions to the

literature on both internal and external environmental accounting (Bennett &

James, 1998a; CICA, 1993, 1994, 1997; Ditz et al., 1995; Epstein, 1996b; Gray

et al., 1987, 1993; Ilinitch et al., 1998; Schaltegger et al., 1996; SMAC, 1995,

1996). These contributions advanced the discussion of the state of the art and best

practices, but the discussion was not accompanied by substantial improvements

in corporate practice, nor did it lead to the advancement of theories, frameworks,

or tools to identify, measure, and report social and environmental impacts.

Also, there were few field based research projects that examined the corporate

integration of social or environmental impacts into management decisions and

their relation to both management accounting and management control until

Epsteins study of corporate environmental performance in 1996. Even Epstein

et al.s (1976) AOS article was primarily focused on external reporting. Though

this was part of a major research project that did investigate the integrationof social and environmental impacts into management decisions generally and

product and service contributions specifically and was funded by the National

Association of Accountants (an association of management accountants), external

reporting was the primary focus. That social accounting in the 1970s was

directed towards innovative attempts to provide additional external disclosure

of the impacts rather than institutionalization of these concerns into day-to-day

management decisions is one explanation for this focus.

Thus, Stage 4 was characterized by a proliferation of corporate environmental

reports, most of which were intended for external rather than internal distribution.Some of the reports included extensive disclosures of environmental liabilities,


10/29

10 MARC J. EPSTEIN

operating expenses, and capital expenditures, and others included detailed

synopses of company programs aimed at the reduction of future environmentalimpacts. Some of the reports were also verified by environmental consulting

firms or the companys independent auditors (Epstein, 1996b). Organizational

structures evolved, decentralizing the function of environmental management

to individual business units, thereby allocating environmental responsibility and

performance expectations to all levels of management. This dramatic increase

in environmental measurement and reporting and the concurrent evolution

of environmental management was not, however, complemented by similarly

significant advances in the measurement, reporting, and management of broader

social impacts. More progress on these issues has been made during stage 5.

Stage 5 1999Present Redevelopment of Social Accounting

When the 1990s began there were few environmental reports produced, but as

the decade progressed, hundreds of companies began producing corporate envi-

ronmental reports. By the late 1990s an increasing number of companies began

producing social or sustainability reports as substitutes for, or in addition to, their

environmental reports indicating a shift back to broader social issues as companies

have begun to determine that the analysis and integration of broader social impacts

provides information necessary for improved decision-making by both internal and

external stakeholders. A broad analysis of social impacts allows corporations to

more accurately evaluate stakeholder needs and anticipate their responses, which

then enables them to more effectively manage their relationships with the commu-

nity and their customers, thereby driving increases in revenue. Additionally, the

consideration of broad social impacts in day-to-day operational capital decisions

can improve cost management. Leadership in external social reporting during this

period was coming primarily from Europe, followed by North America, Australia,

and Asia (Epstein, 1996b; Kolk, 1999; KPMG, 1999; SustainAbility, 2000).An increase in the number of social reports accompanied this shift in concern

to broader social issues. The reports were often produced often under the rubric

of sustainability, a broader framework than the predominately environmental

perspective of the previous period. Public accounting and consulting firms

began to offer services in this area with such titles as PriceWaterhouseCoopers

reputation assurance (Peters, 1999) and KPMGs sustainability services.

These services focused on reducing organizational risk by minimizing negative

social impacts and enhancing reputation, and the reports often responded directly

to corporate concern with determining the payoffs associated with specificinvestments in corporate social responsibility. Yet despite the growing number of


11/29


reports, the development of measurement and reporting frameworks still has not

surpassed the progress made in the 1970s.

THOUGHTS ON THE DECLINE AND REVIVAL OF

SOCIAL ACCOUNTING

Thus, although twenty-five years have passed since major developments occurred

in the field during the 1970s, little progress has been made in social accounting. In

1976, Epstein, et al identified seven classes of social reports: (1) internal reports;

(2) external reports; (3) descriptive reports; (4) quantified reports; (5) monetized

reports; (6) partial social accounting reports; and (7) comprehensive social

accounting reports. Currently, these seven categories of social reports remain

effective and, as was the case twenty-five years ago, very little activity exists

in producing the comprehensive reports, which examine a broad range of social

impacts and provide the most useful information for the effective management of

the full scope of corporate impacts on both internal and external stakeholders.

An examination of the coverage of social accounting in academic journals

such as Accounting, Organizations and Society and Accounting, Auditing, and

Accountability Journal provides insight into and a reflection on the developments

in social accounting in both academia and industry. Beginning with Epstein

et al.s (1976) article in its first issue, AOS published numerous articles on

social accounting over the next few years. Most of these articles provided an

examination of the disclosure of corporate social and environmental impacts, but

these articles were focused primarily on the external reporting of these impacts

rather than internal reporting and decision-making.4

In many ways, a discussion of the reports analyzed in the current accounting

literature is similar to the discussion of the state of the art and social accounting

in the 1970s. The reports included discussions of intentions, concerns, policies,

and results. Again, however, there is little evidence that this concern for socialor sustainability issues has been well integrated into the strategies, structures,

systems, and cultures of the companies.

The failure of social accounting, then, can be traced to the lack of insti-

tutionalization of improvements in measurement and reporting for social and

environmental impacts in either the organizations or the public. Without integra-

tion of these impacts into routine management decisions, organizational change

cannot be effective. In order for current developments in social accounting to be

sustainable, it is necessary that the information such analyses provide be reported

to both internal managers responsible for day-to-day operational decisions andexternal stakeholders who provide external accountability.


12/29

12 MARC J. EPSTEIN

Notably, environmental issues appear to be better integrated into operational

and capital decisions. Managers are expected to operate in environmentallyresponsible ways and make decisions that are consistent with this responsibility.

Capital investment decisions typically require scrutiny and approval by envi-

ronmental professionals. This is the result of extensive regulations, a decade of

corporate concerns that are becoming more institutionalized, large liabilities that

must be disclosed, and substantial cost savings from environmental improvements

that are easier to both calculate and justify (Shrivastava, 1995).

Still, social and sustainability disclosures are usually not widely distributed and

are not typically written in such a way as to be useful to stakeholders. Ultimately,

these disclosures appear in too many cases to be prepared for external distribution

for public relations purposes rather and are not necessarily evident of integration

and institutionalization of social and sustainability issues into corporate culture.

Neither does it appear to be evident of concern for a more complete accountability

to the diverse set of corporate stakeholders.

The survival of interest in social reporting, however, requires that it not be

focused primarily on external disclosure but rather that it operate as an integral

part of a larger corporate and societal shift toward emphasizing the social roles of

corporations. As part of this shift, corporate focus expands to include the recog-

nition of multiple stakeholders in the corporate decision-making process. Social

accounting cannot be constructed primarily to provide public relations material

intended to placate community concerns but rather should be used to change daily

decisions made within organizations (see Doane, 2000; Neu et al., 1998). Also,

readers of social reports need to evaluate them to determine underlying changes

in the corporations, managerial decision-making and corporate culture before

assuming that lasting changes have been achieved.

Of course, there are exceptions. Just as in the 1970s there were leaders in

social reporting, there are leaders today. Still, there remains a significant amount

of work that needs to be done by both managers and researchers to improve the

identification, measurement, reporting, attestation, and management of corporatesocial impacts.

Among the research contributions to the literature are recent collections of

articles that provide an overview of some of the issues and developments in social

accounting. These contributions include Bennett and James (1986b) collection

of articles on management accounting issues related to the environment, their

collection of articles on measurements for sustainability (Bennett & James, 1999),

and Zadek et al.s (1997) collection related primarily to external disclosure of

social impacts. More of these contributions are likely in the near future as this

area continues its rapid development.


13/29


USING SOCIAL ACCOUNTABILITY FOR IMPROVED

EXTERNAL STAKEHOLDER DECISIONS ANDCORPORATE ACCOUNTABILITY

Much of the focus over the last decade, as was the case in the 1970s, has been

on the measurement, reporting, and verification of social indicators for disclosure

to external stakeholders. In an attempt to provide guidance and comparability

to both information preparers and users, numerous organizations have promoted

standards of social reporting as an attempt to satisfy various stakeholders needs

and improve corporate accountability. Examination of these organizations and

standards provides an understanding of both the state of the art and best practices

in external social reporting.

The ISO 14000 series of standards were published in 1996 to improve both

environmental management and environmental performance (SMAC, 1998).

They provide guidance for certification and improvement in such areas as

performance evaluation, auditing, labeling, and life cycle assessments. The

only standard subject to certification, ISO 14001 is a process standard, rather

than a performance standard, and thus does not prescribe a minimum level of

environmental performance. Rather, it describes a system that will ensure that

companies can measure their environmental performance and it is hoped thatthis will lead to improved performance. This is in contrast with EMAS (Europes

Eco-Management and Audit Scheme), which is a performance standard and

requires minimum levels of environmental performance.

In 1997, the Council of Economic Priorities established SA 8,000 (Social

Accountability 8,000) as a standard focused on workplace conditions. An affiliated

accreditation agency was established to develop and verify the implementation of

the standards and to accredit firms to be external auditors. The Institute of Social

and Ethical Accountability, founded in 1996 and based in England, has developed

AA1,000 (Accountability 1,000) as a set of standards of practice for the externaldisclosure and verification of social, ethical, and environmental information.

Another recent development is the Global Reporting Initiative (GRI). Estab-

lished in 1997 with the participation of numerous corporations, consulting firms,

and non-governmental organizations, the GRIs mission is to design globally

applicable guidelines for corporate sustainability reports. In the pilot phase, some

companies used the GRI framework in their sustainability reports. The World

Business Council for Sustainable Development (WBCSD), an industry coalition

of 120 international companies based in Geneva, Switzerland, has made some

progress in the development of frameworks to promote, measure, monitor, andmanage corporate sustainability.


14/29

14 MARC J. EPSTEIN

The WBCSD has been rooted in the belief that performance in the social area is

inevitably more difficult to quantify than commercial or even environmental per-formance (Watts & Holme, 1999). This is a view commonly held in industry and

offers one explanation for the lack of progress in the measurement of social and en-

vironmental impacts. Misconceptions about traditional accounting reports endow

them with unrealistically high levels of precision and reliability, provoking expec-

tations of similarly unrealistic levels of empiricism in social accounting. These

expectations deprive corporate social accounting of numerical legitimacy and, by

consequence, hamper the integration of social and environmental responsibility

into day-to-day corporate decisions. Yet, social science techniques that provide

reasonable estimates for social and environmental performance do exist. These

measures, though requiring further development, nonetheless provide substantial

and valuable information, which enables managers to more accurately evaluate the

tradeoffs made in day-to-day management decisions. Thus, definitions of corpo-

rate profit and performance need to be expanded to include the increase or decrease

of welfare for all stakeholders due to corporate action, rather than the easily mon-

etized impacts on financial stakeholders alone (Epstein & Birchard, 1999).

A perpetually increasing demand for reporting to both internal and external

stakeholders Epstein and Freedman (1994) has generated a market for numerous

consulting firms who have developed practices around the measurement, reporting,

attestation, and management of corporate social and environmental impacts. One

such consulting firm, PriceWaterhouseCoopers has developed a framework, a prin-

ciples matrix, and a set of effectiveness indicators for stewardship, environment,

health and safety, and communication. Notably, the framework and the indicators

are focused on the effect of social and environmental issues on corporate reputation

(Peters, 1999). Arguing effectively for the relevance of social and environmental

concerns to long-term stakeholder and shareholdervalue, London-based consulting

firm SustainAbility has also developed a framework for the integration of these and

economic concerns (Elkington, 1998). Recent research has focused on the impact

of a reputation for social performance on stock price (Schnietz & Epstein, 2003).Additionally, in an attempt to develop standards of corporate social respon-

sibility, the Social Venture Network published a set of nine principles in 1999,

including: (a) global principles of corporate social responsibility; (b) a guidance

document to more carefully articulate the components of the principles; and (c)

a measures document that began to identify possible measures for each of the

principles (SVN, 1999). The SVN project was intended to be the first phase of a

major research project that observed the strengths and weaknesses of the strate-

gies, structures, people, culture, organizational change efforts, and management

control systems that are necessary for the successful implementation of corporatesocial responsibility. Though never completed, the work contributed to efforts to


15/29


change corporate priorities and formalize the identification, measurement, and

reporting of corporate social impacts.The New Economics Foundations (NEF), a non-profit U.K. based organization,

has focused much of its attention on the development of a framework and tools

for social accounting. In Social Auditing for Small Organizations: A Workbook

for Trainers and Practitioners (Pearce et al., 1998), NEF provided a guide to the

internal integration of social impacts, the disclosure of those impacts to external

stakeholders, and the verification of the measures and disclosures by independent

auditors. The workbook provides both a framework for beginning to perform a

social audit and guidance on the development of indicators and benchmarks for

evaluation of performance.

Ralph Estes, who contributed much to the early development of social ac-

counting in the 1970s, has proposed The Sunshine Standards and The Corporate

Accountability Act, the latter of which mandates the disclosure of more compre-

hensive information sets to the public (Estes, 1996). Estes emphasizes the way in

which traditional assessments of corporate performance have overemphasized the

value of shareholders interests to the exclusion of other stakeholders interests,

making accounting complicit in the irresponsibility of corporate behavior.

Standard setters, in attempting to make these various standards operational, have

sought to establish a standard set of disclosures and approach performance metrics

that permit comparisons of corporate social and environmental performance

across industries. Differences in company size, geographic diversity, complexity,

and nature and level of environmental and social impacts of products and activities

complicate this task. Nonetheless, a broad set of measures that successfully

integrates social, environmental and economic impacts would greatly benefit

both internal and external stakeholders. In response to the requests for input

from the Global Reporting Initiative, a number of organizations including the

New Economics Foundation and PriceWaterhouseCoopers have developed social

indicators for use in the proposed external sustainability reporting guidelines.

Another important recent development is the establishment of the Dow JonesSustainability Group Indexes in 1999. These include global indexes based on

a systematic methodology that tracks sustainability performance and provides

investors and companies a way to compare performance. Another company

attempting to provide services to the investment community and corporate

managers on sustainable performance is Innovest. With their tool, EcoValue21,

the company tries to combine financial and environmental performance and

exploit the risk migration and investment out-performance opportunities in

the substantial but largely unrecognized differentials in the eco-efficiency of

major industrial corporations. These all further the developments of probably thebest known of these indexes, the Domini Social Index, established in 1990 and


16/29

16 MARC J. EPSTEIN

composite of 400 socially responsible corporations (Epstein & Birchard, 1999).

These developments also relate to the increasing concern over the relationshipbetween social and environmental performance and financial performance.

Though numerous studies and analyses of these relationships do exist in the

literature (Aspen Institute, 1998; Blumberg et al., 1997; Margolis & Walsh, 2001;

Zadek & Chapman, 1998), a clear relationship cannot yet be specified.

Pertinent to the further development of social accounting is the development

of the internet. Where previously prohibitive costs of collection and distribution

stymied general access to environmental and social impact information, no

such barriers currently exist. External stakeholders or companies could create

uni-dimensional reports by stakeholder, facility or impact, or alternatively,

aggregate the information into a total impact report with the provision of links

to related and more detailed information. Thus, information can be easily posted

and accessed, resulting in a broader forum of stakeholders involved in its analysis

and able to ensure accountability. Increasingly, investors are demanding this

information and its concomitant social accountability.

However, a comparison of corporate annual reports, environmental reports, and

sustainability reports from over 200 companies with those reported by Epstein

et al. (1976) reveals little substantive progress. Although the quantity of these

reports has increased dramatically since 1976, current reports are still inferior

to Abts report of thirty years ago, containing fewer useful measures than some

other reports from that time period. Furthermore, there is little evidence to show

significant integration of a social and environmental concerns or a broad set of

stakeholder interests into management decision-making or corporate culture.

Prior research has shown that the levels of environmental disclosure and the

level of environmental performance are often not highly correlated (Rockness,

1985; Wiseman, 1982; also see Doane, 2000; Neu et al., 1998). Therefore, it is

being suggested here that these are too often an exercise in public relations rather

reflective of a deep concern for accountability and action.

In order to ensure the continuation of the current interest in social accountingand further progress in the field, however, its developments must be integrated

with the management accounting and control systems. Otherwise, the future of

the field is likely to repeat its history, experiencing a surge of interest, as in the

1970s, followed shortly by a decline, as in the 1980s.

USING SOCIAL ACCOUNTING FOR IMPROVED

MANAGERIAL DECISIONS

Increasingly companies are examining how to fit social and environmental issues

into existing management systems. This often includes accounting systems like


17/29


activity based costing and strategic management systems like shareholder value

analysis and balanced scorecard, which examine drivers of value in organizations(Epstein & Birchard, 1999; Epstein & Young, 1999). General managers achieve

substantially better understanding and recognition of environmental and social

impacts when they are measured in monetary terms since this allows them to

integrate these concerns into operational and capital investment decisions and

recognize where tradeoffs are necessary. Quantification in monetary terms also

permits a more comprehensive understanding of impacts on various corporate

stakeholders in both the short and long term.

Life cycle assessment and life cycle costing are also being used in an effort to

provide systematic evaluations of ultimate product responsibility during all phases

of its life cycle, from product concept, material acquisition, R & D operations,

manufacturing, customer use, to final disposal (Datar et al., 1997). Some commu-

nity and environmental activists have been concerned that using economic value

added or any other shareholder value metric acknowledges that shareholders are

the primary stakeholders and denies the relevance of other potential stakeholders to

management decisions. This particularly applies to those stakeholder impacts that

are difficult to quantify and external impacts without clear methods of internaliza-

tion. The most important issue, however, is that the identification and measurement

of both the stakeholders and impacts must be broadened to encompass the impacts

of capital investment decisions over the entire life of the investments, including

product take back. Many companies currently do not consider broad life cycle

impacts that will affect long-term corporate profitability (Epstein, 1996a; Epstein

& Roy, 1997a).

Thus, in order for social accounting to be an effective tool in sustainability,

it must assess a wide range of stakeholder interests over the entire spectrum of

product and service life, relating these issues directly back to profit over both

the short and long term. This can be accomplished if the principles of corporate

social responsibility and the processes of social accounting are fully integrated

into corporate culture and management systems.

DISCUSSION AND ANALYSIS OF CURRENT

EFFORTS IN SOCIAL ACCOUNTING FOR

MANAGERIAL DECISIONS

The earlier discussion attributed much of the decline of social accounting in

stage 3 of the evolution to the lack of institutionalization within organizations.

Current organizational efforts to primarily improve managerial decisions relatedto social impacts and concerned with external disclosure secondarily may have

more permanence. Using some of the newest measurement and management


18/29

18 MARC J. EPSTEIN

systems, some companies have found that significant improvements can be made

in the decision making process to improve both financial and social performance(Epstein & Wisner, 2001a; Wisner et al., 2002). However, many of these corporate

systems are not widely promoted and are not tied to external disclosures, thereby

inhibiting the realization of their full efficacy.

Companies are nonetheless recognizing there are numerous opportunities

to reduce negative environmental impacts and are adopting environmental

management systems to improve their performances. Many are examining how

these same approaches can be applied to broader social issues.

In terms of structure, the corporate sustainability department is responsible for

defining worldwide requirements and objectives and then measuring and reporting

environmental performance. The central office has only a coordinating role, and in-

dividual business units are responsible for developing their own programs to meet

the established objectives. In the early stages of integrating this system, though,

strong central management is necessary to both monitor and motivate performance.

As companies search for ways to improve their performance, determining

the best ways to thoroughly integrate these improvements into all parts of the

company still causes difficulty. In order to improve this integration of social and

environmental impacts into day-to-day management decisions, companies must

tie the measurement and reporting of these impacts into the decision-making

processes already in place. Further, these impacts must be measured and reported

in financial terms and then integrated into the traditional investment models.

To reduce the negative social impacts of corporate activities, the drivers of the

costs and benefits must be analyzed. Understanding these drivers is necessary in

order to better identify, measure, and manage social impacts. Epstein and Roy

(2001) have developed a model to better understand the drivers of sustainability,

considering both the drivers of sustainable performance and the sustainable

drivers of financial performance, along with the development of appropriate

measures (also see Epstein & Wisner, 2001b).

The model (see Fig. 2) begins with corporate and business unit strategyand examines the various ways that a companys sustainability performance is

determined. Among these are actions a company takes deriving from corporate

strategy. There are various structures and systems the can be used proactively

on issues of social concern. These could include a combination of the four

levers of control described by Simons (1995) as boundary, belief, diagnostic, and

interactive system. These systems and structures could also be developed out of

strategy to impact sustainability performance or instead in a reactive mode to

respond to the performance indicators before the stakeholders are impacted or

see the impact. The available systems and structures could also include reactionsto stakeholder concerns through feedback loops that are created to improve


19/29


Fig.

2.

Drivers

ofSustainability.


20/29

20 MARC J. EPSTEIN

management of these issues and that may be directed to altering strategy or

specific actions affecting sustainability performance.The model can be used to measure sustainability performance in either

monetary terms or other metrics related to financial performance. Equipped with

an enhanced understanding of the drivers of social costs and benefits, managers

should be able to make better decisions regarding the tradeoffs that consistently

must be made where corporate products and activities may have a positive impact

on one stakeholder and a negative impact on another. Additionally, the model

facilitates the inclusion of both leading and lagging indicators of performance.

More information related to the strategies, structures, systems, and culture that are

in place might enable better predictions of future sustainability. The information

should then be of interest to both internal and external stakeholders.

One of the major disappointments of social accounting in the 1970s was the lack

of institutionalization within corporate culture. This allowed these concepts to

die within corporations as senior leadership changed and the pressures to increase

profitability and pursue other interests mounted. Thus, institutionalization of

the vision and mission within corporate systems and structures is absolutely

paramount.

THE CHALLENGE TO RESEARCHERS: THEDEVELOPMENT AND APPLICATION OF FRAMEWORKS

AND MEASURE FOR SOCIAL ACCOUNTING

Many have argued that a major impediment to the development of social and

environmental accounting is the inability to measure impacts and performance in

the same objective manner as financial accounting. Further, it is often argued that

auditing of social and environmental information is hampered because standards

of reporting have yet to be established and thus verification of reports cannot be

accomplished as it can in the auditing of financial statements (Pruzan, 1998).Although generally accepted accounting and auditing standards have yet to be

developed for the measurement and reporting of corporate social impacts, neither

internal nor external reporting need be constrained. Economists for years have

employed various techniques for translating human values into monetary terms to

enable the evaluation of the performance of public and corporate social programs.

Techniques like willingness to pay and contingent valuation methods have been

used successfully in economics and can be used effectively in measuring social

and environmental impacts of corporate actions. Thus, companies should be

developing methods to improve internal reporting and decision making so as toimprove their understanding of the issues and improve long term profitability.


21/29


Further, government regulators (such as the SEC in the U.S.) establish regula-

tions for minimum disclosures required of all publicly held companies. They do notspecify maximum disclosures, so companies should disclose any information that

will aid shareholders and other stakeholders in better understanding the condition

and performance of the company and permit forecasts of future performance.

Numerous measures have been developed for use in social accounting (Epstein,

1996b; Epstein et al., 1997a; Epstein & Birchard, 1999; Peters, 1999; SVN,

1999). These often draw on existing social science measurement techniques

based on economics, psychology, and sociology (Freeman, 1993; Mishan, 1971).

Accounting researchers must be involved in developing these techniques further

and demonstrating how they may be applied to existing corporate evaluations

because neither managers nor academic researchers have made much progress

in the accounting or management of corporate social impacts over the last 25

years. They have not developed the techniques, reporting frameworks, or the

systems and structures necessary to drive this through organizations. And if

social accounting is going to provide relevance and reliability of information for

management decisions, both internal and external reporting as well as systems

for implementation of sustainability strategies must be improved.

Managers need to better understand the drivers of success in organizations,

but the traditional models of shareholder value do not sufficiently examine the

interests of non-financial stakeholders. Broader analyses that cut across internal

corporate functions, consider the interests of all stakeholders, and examine the

drivers of long-term organizational success, are required (see Epstein & Birchard,

1999; Epstein et al., 2000; Epstein & Roy, 2001). Improved measurement is

required. Improved internal and external reporting is necessary. Organizational

leadership that recognizes the importance of a broad sensitivity to long term

impacts and the systems necessary to implement these concerns in organizations

is also required. Better analysis of the value of organizational relationships and

the linkages between internal and external drivers of success is also needed. The

measurements and the drivers must be brought together as companies evaluateboth leading and lagging indicators of success.

Thus, in evaluating corporate social performance, both lagging indicators of

past performance and leading indicators of future performance related to the

systems and structures in place to reduce future negative impacts are needed. This

analysis is at the core of the work ofEpstein and Roy (2001) described above.

Developing a Model for Implementing Social Accounting

As a response to the issues discussed in this paper, Epstein and Birchard (1999)have developed a model to integrate the internal and external components required


22/29

22 MARC J. EPSTEIN

Fig. 3. The Accountability Cycle.

for implementation of social accounting for both internal decision making and

improved accountability in organizations. In Counting What Counts: Turning

Corporate Accountability to Competitive Advantage, Epstein and Birchard (1999)

provide a framework for accountability that includes four primary elements (see

Fig. 3):

(1) Improved corporate governance;

(2) Improved measurements that include operational and social measures of per-

formance along with a broadened set of financial metrics that include both

lagging and leading indicators;

(3) Improved reporting to a broad set of internal and external stakeholders of infor-

mation relevant to decisions. This begins with internal reporting to managers

and the selection of various voluntary disclosures to supplement the manda-

tory external disclosures that are currently the primary content of corporatereports; and


23/29


(4) Improved management systems to drive these improvements through corpo-

rate culture and change the way managers make decisions to improve bothcorporate accountability and corporate performance.

The book provides a framework for social accounting that integrates both internal

and external reporting. It links all of the necessary elements to operationalize

social accounting and provides, the mechanism to link social, environmental, and

ethical concerns to financial performance. It provides a model for the integration

of social concerns into day-to-day management decisions and does so in a format

that examines the relevance of social issues to overall corporate performance.

A new measure of corporate performance that supplements the lagging indi-

cators that accountants have traditionally used with leading indicators is needed.This should include a broad recognition of those who have a stake in the equity

of enterprises and the long term social impacts of companys products, services,

and processes, so as to provide a comprehensive portfolio of a companys social

and financial performance. Recognized stakeholders should include employees,

customers, suppliers, and the community, in addition to financial stakeholders. By

including these impacts in the measurement and reporting of an integrated measure

of corporate performance and including the information in both internal and

external reports and decisions, both corporate accountability and internal decisions

related to the improvements of overall stakeholder value can be improved.

The Next Step Current Needs

In part, the failure of social accounting is due to the lack of an integrated model for

both internal and external reporting and for the identification and measurement of a

broader set of impacts and corporate performance. The model proposed by Epstein

and Birchard is an attempt to rectify that failure and provide a broader concept and

definition of the actions that lead to corporate accountability. They argue that theinternal reporting and external disclosures must be part of an integrated system that

includes governance, measurement, reporting, and management control systems.

Studies summarized in this paper have described the state of the art and best

practices in the measurement and reporting of sustainability in both corporate

practice and academic research. Both academics and corporations have further

developed frameworks and techniques that can be uses to implement sustainability

in order to reduce both corporate social impacts and improve accountability. How-

ever, there remains much work to be done by managers, who must institutionalize

the concern for sustainability and implement the structures and systems necessaryto support it. These must include improved measurement and integration into


24/29

24 MARC J. EPSTEIN

day-to-day management decisions, including operating and capital decisions and

performance evaluations.There is also substantial room for significant research contributions to both

the theory and practice of corporate social accounting. Some of the current

needs are:

(1) Develop new techniques (and apply existing ones) for measuring social and

environmental impacts;

(2) Examine international differences in the state of the art and best practices in

management of social and environmental impacts. Determine the causes for

those differences and ways to improve corporate social and environmental

performance;(3) Examine alternative frameworks for external reporting in corporate annual re-

ports and sustainability and environmental reports. Determine the most useful

measurement and reporting format for various external stakeholders;

(4) Develop field research projects that test the success of various systems to

identify, measure, monitor, report, and manage social and environmental

impacts and determine the variables that drive success. Are these systems

more successful in firms that are small/large, centralized/decentralized,

global/locally adaptive, have high/low impacts, etc.?

(5) Determine whether changing the information provided to managers issufficient to change their decisions or whether it is necessary to change their

decision-making models in order to facilitate the consideration of social and

environmental impacts. Must the management of these impacts be a part of

the performance evaluation and incentive systems in organizations in order

to bring them into managerial decisions?

(6) Develop, refine, and apply models and techniques for the implementation of

social accounting and sustainability strategies and the management of social

and environmental impacts in organizations. Are the accounting and control

systems different for managing these impacts?(7) Test the effectiveness of models such as the Epstein-Roy sustainability drivers

model to both describe drivers of sustainability and financial performance to

improve managerial decisions;

(8) Examine the relationships of stock price and cost of capital to corporate social

and environmental liabilities and performance.

Through projects like these, accounting researchers can aid in the integration

of social and environmental impacts into management decision-making and the

implementation of corporate sustainability strategies. This can result in high

quality academic research, improved management decisions, improved corporateprofits and reduced social and environmental impacts.


25/29


Now, as in the 1970s, many CEOs are describing their profound interest in

providing greater benefits to the community. As aforementioned, too often this hasbeen either empty promises or an inability to deliver on the commitment. This is

due to a lack of institutionalization and integration into day-to-day management

decisions. If current activities are intended to be more than external reporting for

public relations purposes, then they must be part of a comprehensive sustainability

strategy that is driven through the organization.

Having committed themselves to sustainability, many large companies and

accounting researchers must now figure out how to use management accounting

and control systems to implement the necessary changes. The development of

social accounting may prove to be an excellent example of the importance of

integration of governance, measurement, reporting, and systems and the critical

importance of implementation and institutionalization in attempts to change

organizational cultures, systems, and decisions. With reliance solely on external

disclosures without internal integration, the social accounting of the 1970s

was destined to fail. Likewise, without the institutionalization of governance,

measurement, and reporting systems, current changes will not last.

There is a significant amount of activity to develop various standards and

improve indicators to identify, measure, monitor, and report social and environ-

mental impacts to external stakeholders and to improve corporate accountability.

This, however, is similar to the pattern of development in the 1970s, which did

not lead to long-term success or the institutionalization of social accounting

within industry or academia. As suggested earlier, an integration of the reporting

to both internal and external stakeholders is required. Additionally, the linking

of this reporting to a broader model of implementation that includes a broadened

set of measures, improved corporate governance, and the uses of management

systems to drive this through organizations is necessary (Epstein & Birchard,

1999). Academic researchers can provide the frameworks and tools necessary to

ensure that the academic and managerial developments of social accounting have

more longevity and substance than those in the past.

NOTES

1. Despite more than twenty-five years of development in the field, terminology still lacksstandardization. Social audit, social accounting and accountability, social responsibilityreporting, social and sustainability performance measurement, and sustainability reportingare all terms used to describe the measurement and reporting of an organizations social, en-vironmental, and economic impacts, as well as societys impacts on that organization,

including both positive and negative impacts. Corporate citizenship, social responsibility,accountability, stakeholder responsiveness, and sustainable development are all terms


26/29

26 MARC J. EPSTEIN

used to represent the ways in which corporations, internal and external stakeholders,and society interact.

2. In some cases the reports were descriptive and some quantitative. Measurements weresometimes in physical and other quantitative measures and some were monetized.

3. The study reviewed the internal and external documents of over 100 companies andconducted visits and interviews at 35.

4. For examples, see Lessem (1977) and Dierkes and Preston (1977).

REFERENCES

American Accounting Association (1975). Report of the Committee on Social Costs. The Accounting

Review Supplement.

American Accounting Association (1976). Report of the Committee on Accounting for Social

Performance. The Accounting Review Supplement.

American Institute of Certified Public Accountants (1977). The measurement of corporate social

performance. New York: AICPA.

Aspen Institute (1998). Uncovering value: Integrating environmental and financial performance.

New York: Aspen Institute.

Association of Chartered Certified Accountants (ACCA) (2001). U.K. environmental reporting awards

2000 report of the judges. London, UK: ACCA.

Bauer, R. A., & Fenn, D. H., Jr. (1972). The corporate social audit. New York: Sage.

Bennett, M., & James,P. (1998a).Environment under the spotlight: Current practice and future trends in

environment related performance measurement for business. London: Association of Chartered

Certified Accountants.

Bennett, M., & James, P. (1998b). The green bottom line: Environmental accounting for management-

current practice and future trends. Sheffield, England: Greenleaf Publishing.

Bennett, M., & James, P. (1999). Sustainable measures: Evaluation and reporting of environmental

and social performance. Sheffield, England: Greenleaf Publishing.

Berry, M., & Rondinelli, D. (1998). Proactive corporate environmental management: A new industrial

revolution. Academy of Management Executive, 12(2), 3853.

Blumberg, J., Korsvold, A., & Blum, G. (1997). Environmental performance and shareholder value.

Geneva: WBCSD.

Boyer, P. (1984). From activism to apathy. Journal of American History, 70(4), 821844.

Canadian Institute of Chartered Accountants (1993). Environmental costs and liabilities: Accounting

and financial reporting issues. The Canadian Institute of Chartered Accountants.

Canadian Institute of Chartered Accountants (1994). Reporting on environmental performance. The

Canadian Institute of Chartered Accountants.

Canadian Institute of Chartered Accountants (1997). Full cost accounting from an environmental

perspective. The Canadian Institute of Chartered Accountants.

Caplan, E. H., & Landekich, S. (1974).Human resource accounting: Past, presentand future. New York:

National Association of Accountants.

Corson, J. J., & Steiner, G. A. (1974). Measuring businesss social performance: The corporate social

audit. The Committee for Economic Development.

Datar, S., Epstein, M. J., & White, K. (1997). Bristol-Myers Squibb: The matrix essentials product life

cycle review. Stanford Business School Case #F-254.


27/29


Dierkes, M., & Bauer, R. A. (1973). Corporate social accounting. New York: Praeger.

Dierkes, M., & Preston, L. E. (1977). Corporate and social accounting for the physical environment

a critical review and implementation proposal. Accounting, Organizations and Society, 2(1),

322.

Ditz, D., Ranganathan, J., & Banks, R. D. (1995). Green ledgers: Case studies in corporate environ-

mental accounting. World Resources Institute.

Doane, D. (2000). Corporate spin: The troubled teenage years of social reporting. London, UK:

New Economics Foundation.

Dunlap, R., & Catton, W. (1979). Environmental sociology. Annual Review of Sociology, 5, 243273.

Elkington, J. (1998). Cannibals with forks: The triple bottom line of the 21st century business. Gabriola

Island, British Columbia: New Society Publishers.

Epstein, M. J. (1996a). Accounting for product take-back. Management Accounting (August), 2933.

Epstein, M. J. (1996b).Measuring corporate environmental performance: Best practices for costing and

managing an effective environmental strategy. Burr Ridge, IL: Irwin Professional Publishing.

Epstein, M. J., & Birchard, B. (1999). Counting what counts: Turning corporate accountability to

competitive advantage. Reading, MA: Perseus Books.

Epstein, M. J., Epstein, J. B., & Weiss, E. J. (1977a). Introduction to social accounting. California:

Western Consulting Group.

Epstein, M. J., Flamholtz, E., & McDonough, J. J. (1976). Corporate social accounting in the United

States of America: State of the art and future prospects.Accounting, Organizations and Society,

1(1), 2342.

Epstein, M. J., Flamholtz, E., & McDonough, J. J. (1977b). Corporate social performance: The

measurement of product and service contributions. New York: National Association of

Accountants.

Epstein, M. J., & Freedman, M. (1994). Social disclosure and the individual investor. Accounting,

Auditing, and Accountability Journal, 7(4).

Epstein, M. J., Kumar, P., & Westbrook, R. A. (2000). The drivers of customer and corporate profitabil-

ity: Modeling, measuring, and managing the causal relationships. Advances in Management

Accounting, 9.

Epstein,M. J., & Roy, M.-J. (1997). Integrating environmental impacts into capital investment decisions.

Greener Management International: The Journal of Corporate Environmental Strategy and

Practice (Spring).

Epstein, M. J., & Roy, M.-J. (2001). Sustainability in action: Identifying and measuring the key

performance drivers. Long Range Planning, 34.

Epstein, M. J., & Wisner, P. S. (2001a). Linking management control systems to environmental

performance: Evidence from Mexico. Working Paper. Houston, TX: Rice University.

Epstein, M. J., & Wisner, P. S. (2001b). Using a balanced scorecard to implement sustainability.

Environmental Quality Management(Winter).

Epstein, M. J., & Young, S. D. (1999). Greening with EVA. Management Accounting (January),

4549.

Estes, R. W. (1973). Accounting and society. Wiley.

Estes, R. W. (1976). Corporate social accounting. New York: Wiley-Interscience.

Estes, R. W. (1996). Tyranny of the bottom line: Why corporations make good people do bad things .

San Francisco: Berrett-Koehler Publishers.

Freeman, A. M. (1993). The measurement of environmental and resource values: Theory and methods.

Washington, DC: Resources for the Future.

Freudenberg, W. (1986). Social impact assessment. Annual Review of Sociology, 12, 451478.


28/29

28 MARC J. EPSTEIN

Gray, R. (2001). Thirty years of social accounting, reporting and auditing: What (if anything) have

we learnt? Business Ethics: A European Review, 10(1), 915.

Gray, R., Bebbington, J., & Walters, D. (1993). Accounting for the environment. R. H. Gray & The

Certified Accountants Educational Projects.

Gray, R., Owen, D., & Maunders, K. (1987). Corporate social reporting: Accounting and account-

ability. Prentice-Hall.

Grojer, J. E., & Stark, A. (1977). Social accounting: A Swedish attempt. Accounting, Organizations

and Society, 2(4), 349386.

Ilinitch, A. Y., Soderstrom, N. S., & Thomas, T. (1998). Measuring corporate environmental

performance. Journal of Accounting and Public Policy, 17, 283408.

Kolk, A. (1999). Evaluating corporate environmental reporting.Business Strategy and the Environment,

8, 225237.

KPMG (1999). KPMG international survey of environmental reporting 1999. Netherlands.

Lessem, R. (1977). Corporate social reporting in action an evaluation of British, European and

American practice. Accounting, Organizations and Society, 2(4), 279294.

Linowes, D. F. (1972). Strategies for survival. New York: Amacom.

Linowes, D. F. (1974). The corporate conscience. New York: Hawthorn Books.

Margolis, J. D., & Walsh, J. P. (2001). People and profits: The search for a link between a companys

social and financial performance. London: Lawrence Earlbaum.

Mathews, M. (1997). Twenty-five years of social and environmental accounting research. Accounting,

Auditing & Accountability Journal, 10(4), 481531.

Mishan, E. J. (1971). Cost benefit analysis. London: George Allen & Unwin Ltd.

Neu, D., Warsame, H., & Pedwell, K. (1998). Managing public impressions: Environmental disclosures

in annual reports. Accounting, Organizations and Society, 23(3), 265282.

Nikolai, L. A., Bazley, J. D., & Brummet, R. L. (1976). The measurement of corporate environmental

activity. National Association of Accountants.

Parker, L. D. (2000a). Green strategy costing: Early days. Australian Accounting Review, 10(1).

Parker, L. D. (2000b). Environmental costing: A path to implementation. Australian Accounting

Review, 10(3).

Pearce, J., Raynard, P., & Zadek, S. (1998). Social auditing for small organizations: A workbook for

trainers and practitioners. London: New Economics Foundation.

Peters, G. (1999). Waltzing with the raptors: A practical roadmap to protecting your companys

reputation. Wiley.

Post, J., & Epstein, M. J. (1977). Information systems for social reporting. Academy of Management

Review (January).

Pruzan, P. (1998). From control to values based management and accountability. Journal of Business

Ethics, 17, 13791394.

Purser, R., Park, C., & Montouri, A. (1995). Limits to anthropocentrism: Toward an ecocentric

organization paradigm? Academy of Management Review, 20(4), 10531089.

Rockness, J. (1985). An assessment of the relationship between U.S. corporate environmental

performance and disclosure. Journal of Business Finance and Accounting (Autumn), 339354.

Schaltegger, S., Muller, K., & Hindrichsen, H. (1996). Corporate environmental accounting.

Chichester, England: Wiley.

Schnietz, K., & Epstein, M. J. (2003). The crisis value of a reputation for corporate social re-

sponsibility: Evidence from the 1999 Seattle WTO meeting. Working Paper. Houston, TX:

Rice University.

Seidler, L. J., & Seidler, L. L. (1975). Social accounting theory issues and cases. Los Angeles: Melville.


29/29


Shrivastava, P. (1995). Ecocentric management for a risk society. Academy of Management Review,

20(1), 118137.

Simons, R. (1995). Levers of control: How managers use innovative control systems to drive strategic

renewal. Boston: Harvard Business School Press.

Social Venture Network (1999). Standards of corporate social responsibility. San Francisco: Social

Venture Network.

Society of Management Accountants of Canada (1995). Implementing corporate environmental

strategies. Management Accounting Guidelines No. 37. Hamilton, Ont.: The Society of

Management Accountants of Canada.

Society of Management Accountants of Canada (1996). Tools and techniques of environmental

accounting for business decisions. Management Accounting Guidelines No. 40. Hamilton,

Ont.: The Society of Management Accountants of Canada.

Society of Management Accountants of Canada (1998). Understanding and implementing ISO 14000.

Management Accounting Guidelines No. 45. Hamilton, Ont.: The Society of Management

Accountants of Canada.

SustainAbility (2000). The global reporters. London, England: SustainAbility.

Terleckyj, N. E. (1970, August). Measuring progress towards social goals: Some possibilities at

national and local levels. Management Science, 16(12), 765778.

U.S. Department of H.E.W. (1970). Toward a social report. Ann Arbor: University of Michigan Press.

Watts, P., & Holme, L. (1999). Meeting changing expectations: Corporate social responsibility. World

Business Council for Sustainable Development.

Wilson, I. (2000). The new rules of corporate conduct: Rewriting the social charter. Westport, CT:

Quorum Books.

Wisner, P., Epstein, M., & Bagozzi, R. (2002). Organizational antecedents and consequences of

environmental performance. Working Paper. Houston, TX: Rice University.

Wiseman, J. (1982). An evaluation of environmental disclosure made in corporate annual reports.

Accounting Organizations and Society, 7(1), 5363.

Woodward, D. (1998, August). An Attempt at the classification of a quarter of a century of (non-critical)

corporate social reporting. Accounting and Business Society, 6(1), 1967.

Zadek, S., & Chapman, J. (1998). Revealing the emperors clothes: How does social responsibility

count? London: New Economics Foundation.

Zadek, S., Pruzen, P., & Evans, R. (1997). Building corporate accountability: Emerging practices

in social and ethical accounting, auditing and reporting. London: Earthscan Publications

Limited.

corporate social impacts.pdf

Documents