Sustainability and Green Finance in the Era of Non-Financial Reporting: From Sustainability Reporting to Greenwashing

Dear Colleagues,

The considerable recent growth in research into social, environmental issues and governance has been accompanied by some examinations of the reliability and credibility of sustainability information to the public (Khan et al., 2020a). Nevertheless, the body of sustainability research into green finance and green reporting remains relatively small, and there have been calls for further exploration of firms’ initiatives for improving reliable and trustworthy sustainability practices and green financing in different contexts (Khan et al., 2020a; Al-Shaer and Zaman, 2016). Additionally, investigation into different forms of sustainability, CSR practices, green finance and green reporting from a historical, institutional and contextual perspective has been called for (Jamali and Karam, 2018).

The recent scholarship of academic studies have also emphasised a necessity to widen the notion of the “quality” and “green washing” beyond traditional obviously quantity-based studies on the topic of sustainability and green finance where firms are involved in “cosmetic” non-financial information and busy with external impressions and image creation (Khan et al, 2020b). This issue is pertinent as it has been argued that to achieve sustainability, green activities, and green finance, more credible and trustworthy regulatory interventions across different jurisdictions are required (Abernathy et al., 2017). In practice, we are witnessing regulatory interventions and initiatives in mandating sustainability practices and making CSR practices and green finance obligatory in different nations. Powered by the leading role of emerging economies such as Brazil, Bangladesh, China, India, Indonesia, Vietnam and others, it is displayed that a continuing commitment by national regulators is in place through sustainability and green regulations (The Guardian, 2014; Bose et al., 2018). Similar initiatives are also evidenced in European Union member states such as the Non-financial Directive (EC, 2017; Impact Management Project, 2020) and in other developed economies, namely, New Zealand where different initiatives are undertaken to make non-financial reporting, in particular, climate change reporting, mandatory (Shaw, 2020).

Lastly, it is argued that an absence of high-quality sustainability information tends to increase stakeholders’ mistrust and credibility gap (Michelon et al., 2015), and an increased credibility gap deteriorates a firm’s external image (Milne and Gray, 2013). Against the backdrop, we still do not know much what and whether any regulatory interventions in different contexts do facilitate (or obstruct) producing reliable and credible sustainability and green-finance-related information. It is also less understood whether a wide range of historical, contextual, institutional, and governance-related factors assist (or impede) in improving quality of sustainability and green information. To ensure trustworthy and reliable information, the role of independent auditors and assurance providers is emphasised in the literature (ICEAW, 2008). Nonetheless, little is understood empirically regarding how and whether audit and assurance providers and the audit profession have performed their role in this regard in association with national regulators. Lastly, given that it also important to understand different stakeholders’ opinion towards improving quality of sustainability and green finance and non-financial performance information (Diouf and Boiral, 2017), we also believe that how internal users/stakeholders, specifically, management accountants do contribute in producing reliable and trustworthy information is still missing in the literature, but worthy of further investigation. 

This Sustainability Special Issue aims to serve as a platform for further research into the diverse foundations of sustainability, environmental and green accounting, and reporting, in particular in the space of trustworthy of non-financial reporting practices, green finance, and the emergence of “window-dressing” initiatives.

Proposed topics:

We welcome submissions of full papers that focus on research in the following areas:

• An empirical account of sustainability and green financing, and quality of green reporting from different emerging and developed countries: sustainability accounting and green reporting quality over a longitudinal perspective;
• An investigation of sustainability and green financing, and green reporting for both firms’ level and across firms’ value chain partners in different countries and their implications for combating (or not) greenwashing practices;
• Comparative studies on the regulatory reforms (hard vs soft regulations) relating to green reporting, sustainable practices and green finance across the world and any impact of such non-financial reporting regulations on reducing firms’ cosmetic show-off green practices.
• Comparative evidence of sustainability and green finance, green reporting practices, the impact of historical, institutional, and other context-specific factors and their role in shaping and reshaping the development of the sustainability and green finance for firms in different jurisdictions;
• Investigating the role of audit and assurance providers, audit professions, and professional bodies towards reducing cosmetic sustainability and green finance, and underlying challenges auditors and other external assurance providers experience in this regard;
• Empirical understanding of multiple stakeholders’ (e.g., regulators, managers, shareholders, and others) opinions about sustainability, green finance, green reporting around the world, and understanding stakeholders’ priorities and mechanisms towards combating “greenwashing” practices;
• Investigating the impact of credible sustainability, green financing, and green reporting information on firms’ performance in different contexts across the world;
• Exploring the role of internal business partners, specifically, management accountants, CFOs towards developing relevant credible and trustworthy sustainability, green financing and green reporting information and internal politics, management accountants’ experience in this regard;
• Empirical understanding of the role of executive management, audit committees, boards of directors, sustainability committees for generating credible sustainability, green financing and green reporting information, and bottlenecks firm decision-makers face in this journey;
• Evidence of international illustrations of accounting for green finance for firms, their alignment with achieving sustainable development goals (UN SDGs).

Submission guidelines and Review procedure:

We welcome research applying diverse theoretical approaches using traditional and alternative theories (from broad sociological, political economy, behavioral, to economies and positive accounting theories) and a wide range of methodological approaches including qualitative, quantitative, interpretive, archival in different contexts and across different industries.

The submission deadline for this Special Issue is 31st October 2021. No papers will be considered for the Special Issue if they are submitted after this dateline. 

All papers will be reviewed and accepted in accordance with Sustainability’s normal procedures. Submitted manuscripts must contribute significantly in terms of theory and methodology and promote scholarships of knowledge for international academic audiences and practitioners in the fields of accounting, management, business, and sustainability accounting. Specifically, all accepted papers must have originality in their contributions and commit to the high standards of the Sustainability Journal.  As such, submitted papers must have a minimum of 50% citations and references from the top tier Accounting and Management and Business journals while developing and writing manuscripts (A*/A rated journals by ABDC, or Q1/Q2 in Scopus ranked).

Submissions will be subject to an initial screening by the Guest Co-editors of the Special Issue, and papers which fall outside the scope of the Special Issue or which are considered unlikely to be suitable for the Special Issue will be outright rejected. The remaining papers will then be subject to double-blind refereeing.

References:

Abernathy, J., Stefaniak, C., Wilkins, A. and Olson, J. (2017), “Literature review and research opportunities on credibility of corporate social responsibility reporting”, American Journal of Business, Vol. 32 No. 1, pp. 24-41.

Al-Shaer, H. and Zaman, M. (2016), “Board gender diversity and sustainability reporting quality”, Journal of Contemporary Accounting & Economics, Vol. 12 No. 3, pp. 210-222.

Bepari, K. and Mollik, A. T. (2016), “Stakeholders’ interest in sustainability assurance process: An examination of assurance statements reported by Australian companies, Managerial Auditing Journal, Vol. 31, Issue 6/7, pp. 655-687

Bose, S., Khan, H. Z., Rashid, A. and Islam, S. (2018), “What drives green banking disclosure? An institutional and corporate governance perspective”, Asia Pacific Journal of Management.

Diouf, D. and Boiral, O. (2017), “The quality of sustainability reports and impression management: A stakeholder perspective”, Accounting, Auditing & Accountability Journal, Vol. 30 No. 3, pp. 643-667.

EC (2017). Communication from the Commission (2017/C 215/01). Guidelines on Non-financial Reporting (Methodology for Reporting Non-financial Information). Accessed on 08/04/2018 from

Impact Management Project (2020), Statement of Intent to Work Together Towards Comprehensive Corporate Reporting (Carbon Disclosure Project, Climate Disclosure Standards Board, the Global Reporting Initiative, the International Integrated Reporting Council, and the Sustainability Accounting Standards Board).

ICEAW (2008), Assurance on non-financial information EXISTING PRACTICES AND ISSUES, Audit and Assurance Faculty, July, pp. 1-28. Retrived from https://www.icaew.com/~/media/corporate/files/technical/audit%20and%20assurance/assurance/assurance%20on%20non%20financial%20information.ashx

Jamali, D. and Karam, C. (2018), “Corporate social responsibility in developing countries as an emerging field of study”, International Journal of Management Reviews, Vol. 20 No.1, pp. 32-61.

Khan, H. Z., Bose, S., Mollik, A. T., & Harun, H. (2020a). ‘Green washing’ or ‘authentic effort’? An empirical investigation of the quality of sustainability reporting by banks. Accounting, Auditing & Accountability Journal, doi: 10.1108/AAAJ-01-2018-3330.

Khan, H. Z., Bose, S. and Johns, R. (2020b), “Regulatory influences on CSR practices within banks in an emerging economy: Do banks merely comply?”, Critical Perspectives on Accounting, Vol. 71 pp.1-20.

The Guardian. (2014). “Welcoming a new generation of green financial policy innovation”, available at: http://www.theguardian.com/sustainable-business/green-financial-policy-new-generation

Michelon, G., Pilonato, S. and Ricceri, F. (2015), “CSR reporting practices and the quality of disclosure: An empirical analysis”, Critical Perspectives on Accounting, Vol. 33, pp. 59-78.

Milne, M. J. and Gray, R. (2013), “W (h) ither ecology? The triple bottom line, the global reporting initiative, and corporate sustainability reporting”, Journal of Business Ethics, Vol. 118 No. 1, pp. 13-29.

Mir, M., Mollik A. T. and Rampling, P. (2015), The Association between Environmental Performance and Financial Performance: An Empirical Examination of the Electricity Generating Energy Companies in Australia and New Zealand, in research book: Corporate Social Responsibility and Sustainability: Contemporary Perspectives, Chaper 11, pp.179 - 193, Editors: Mehran Nejati, Ali Quazi, Azlan Amran, Pearson: Malaysia

Shaw, J. (2020), New Zealand first in the world to require climate risk reporting, 15 September, (New Zealand Government: Wellington).

Dr. Habib Zaman Khan
Dr. Abu Taher Mollik
Guest Editors

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