Ambiguity of financial environmental information: A case study of a Finnish energy company
Accounting, Auditing & Accountability Journal
ISSN: 0951-3574
Article publication date: 20 March 2017
Abstract
Purpose
Voluntary corporate social responsibility reporting has developed into an everyday activity for many commercial organizations, and scholarly interest in these practices continues to increase. This paper focusses on one subset of these disclosures, namely the figures relating to environmental expenditures and investments published by various organizations. The purpose of this paper is to provide insights into the nature, role and significance of such financial environmental information. Despite their seeming accuracy and preciseness, little is known about how such financial environmental information is constructed and subsequently used in organizational settings.
Design/methodology/approach
The paper is based on a qualitative case study focussing on a Finnish energy company. The authors build the investigation primarily on 26 semi-structured interviews with employees at all organizational levels, which the authors supplement with various documentary sources. The interpretation draws on the notion of loose coupling, which the authors use as a method theory to provide a better understanding of this complex organizational practice.
Findings
The authors highlight the ambiguous and imprecise nature of the outwardly accurate figures provided by the company. The authors argue that disclosed financial environmental information is only loosely coupled with various dimensions, including the organization’s actual activities, its environmental impacts and organizational decision making.
Originality/value
The findings contrast with those of some prior research, which has considered financial environmental information highly valuable. As for broader implications, the paper discusses the accuracy of public records based on such ambiguous organizational figures.
Keywords
Acknowledgements
Earlier versions of this paper have been presented at the 2nd Critical Studies in Accounting and Finance Conference, Abu Dhabi, UAE, December 2013, at the 9th International Management Control Research Conference, Nyenrode, The Netherlands, September 2013, at the 9th ENROAC Conference, Jyväskylä, Finland, June 2013, at the 36th Annual Congress of the European Accounting Association, Paris, France, May 2013 and at research seminars at the Universidad de Pablo de Olavide de Seville, University of Turku, and Aalto University. The authors are grateful for the comments provided in those sessions by the participants and by the discussants Charles H. Cho (CSAFC), Paulina Arroyo (ENROAC) and Jan Bebbington (EAA), as well as for the insightful comments of the two anonymous reviewers. Moreover, we wish to acknowledge financial support received for this study from the Academy of Finland (project 250478) and the Finnish Foundation for Economic Education. The usual caveat applies.
Citation
Laine, M., Järvinen, J.T., Hyvönen, T. and Kantola, H. (2017), "Ambiguity of financial environmental information: A case study of a Finnish energy company", Accounting, Auditing & Accountability Journal, Vol. 30 No. 3, pp. 593-619. https://doi.org/10.1108/AAAJ-02-2015-1961
Publisher
:Emerald Publishing Limited
Copyright © 2017, Emerald Publishing Limited