Through the Looking Glass: The Emergence, Evolution and Embedding of Sustainability Accounting in a Family Business

Importance and Key Contributions A rapidly increasing number of corporations claim that they are integrating sustainability concerns into their strategic and operational decision making processes (Thomas and Lamm, 2012) and... [ view full abstract ]

Importance and Key Contributions
A rapidly increasing number of corporations claim that they are integrating sustainability concerns into their strategic and operational decision making processes (Thomas and Lamm, 2012) and are producing sustainability-related accounts and narratives (Gray, 2010). However, internally legitimating and embedding new sustainability activities (including sustainability accounting) within an organisation is a challenging, complex and under-researched process (Thomas & Lamm, 2012; Frandsen et al., 2013; Contrafatto, 2014). New organisational activities or programmes often face a deficit of legitimacy (Aldrich & Fiol, 1994; Bridwell-Mitchell and Mezias, 2012). The legitimacy deficit of a new programme is particularly acute where the programme has few precedents, its objectives are unconventional or contested, and the technologies being used or the outcomes of the programme are uncertain or risky (Aldrich & Fiol, 1994; Suchman, 1995). Given the complex, multileveled and contested nature of sustainability and accounting for sustainability (Gray, 2010), new corporate sustainability programmes are likely to be susceptible to internal legitimacy deficits. The main aim of this study is to develop an empirical and theoretical understanding of how and why a sustainability programme, including sustainability-related accounting, emerged, evolved and partially embedded within a large commercial organisational.

The paper provides a holistic and longitudinal view of the development of a sustainability programme and related accounting within a family-owned company. The study adds to the small but growing body of literature (Bebbington et al. 2009 and Lodhia and Jacobs 2013; Contrafatto 2014; Belal and Owen, 2015) that provides a more detailed, complete and nuanced view of the motives for this type of accounting and reporting (O’Dwyer, 2002). It therefore responds to Hopwood’s (2009, p.437) call for detailed case studies exploring the variety of motives implicated in the (non) production of environmental and sustainability-related accounts.
In addition, only a small number of studies (see, for example, Contrafatto, 2014; Belal and Owen, 2015) have explicitly focused on how accounting for sustainability develops in specific organisational contexts. Yet, studies of this kind are necessary to understand and evaluate the potential of this type of accounting, and accounting in a wider sense, to promote transformative change in our ways of thinking and doing business (Contrafatto, 2014).

Theoretical Base
The study mobilises two theoretical concepts – OI (organisational identity) and internal programme legitimacy. OI is an important construct in understanding the direction and persistence of both individual and organisational action (see, for example, Dutton and Dukerich, 1991; Gioia and Chittipeddi, 1991; Gioia and Thomas, 1996; Albert et al., 2000). Internal legitimacy also has an important role to play in the acceptance of new activities and processes within an individual organisation. Recent work (Bridwell-Mitchell and Mezias, 2012; Brown and Toyoki, 2013) suggests that there are overlaps between the two concepts which should be considered when seeking to understand how new organisational activities evolve and embed. Thus, both OI and internal programme legitimacy are mobilised within this study as part of an interpretive guide to capture and understand how a new (sustainability) programme unfolds within an organisation.
Research Questions and Method
The paper addresses the following research questions:
1. Why and how did an EMS emerge and evolve between 1998 and 2003 in the CC Group?
2. Why and how did a sustainability programme evolve and embed between 2003 and 2012?
3. Why and how did external sustainability reporting grow and subsequently decline between 2001 and 2012?
The study, based on a longitudinal case, traces the emergence and development of sustainability activities within the CC Group between 1998 and 2012. The CC Group is a large, Irish, family-owned group of companies operating in a fast moving consumer goods (FMCG) industry. A qualitative methodology was adopted for the study, utilising field visits, extensive documentary analysis and 27 semi-structured interviews with organisational members and stakeholders.

Findings
The longitudinal nature of the study illustrates the evolutionary nature of the sustainability programme and the ongoing interplay between it and the organisation’s identity and internal legitimation processes. It also evidences the vulnerability of apparently embedded structures or activities to losses of internal legitimacy and of active support as the programme evolved. With regard to external sustainability reporting, the study illustrates that external reporting is not exclusively motivated by external legitimacy considerations and provides further evidence to support the argument (Bebbington et al., 2009; Lodhia and Jacobs, 2013; Contrafatto, 2014) that internal dynamics have a significant role to play in the emergence of sustainability-related reporting. However, the case narrative also shows that external reporting may lag, rather than lead or trigger, sustainability activities and performance, contrary to what is commonly assumed in the literature. In contrast to Contrafatto’s (2014) conclusions, the study illustrates that external reporting can be a by-product of other sustainability activities (the EMS) rather than the organisation’s primary medium or output of the process of engaging with sustainability. In addition, and again in contrast to Contrafatto’s (2014, p. 429) findings, the longitudinal nature of the study demonstrates that external reporting may be weakly and temporally internally legitimated rather than institutionalised, despite what would seem to be a favourable organisational environment incorporating an institutionalised notion of social and environmental responsibility or sustainability.
Implications
The study lends support to Belal and Owen’s (2015, p.1187) assertion that there is a “danger in putting blanket trust in voluntary reporting initiatives” as organisations have the discretion to cease reporting at any time. In Belal and Owen’s (2015) study, the case organisation ceased reporting when this was perceived as going against the fundamental economic interests of the organisation. The present study demonstrates that forms of voluntary reporting can cease even when the organisation has “good news” to report and there is no conflict between reporting and the fundamental economic interests of the organisation.

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Sustainability, Accounting for Sustainability, Internal Legitimacy, Organisational Identity [ view full abstract ]

Sustainability, Accounting for Sustainability, Internal Legitimacy, Organisational Identity