The focus of this paper is institutional change and the changing role of business in Germany. Back in the 1980s, the German institutional framework was characterized by implicit mandatory and obligatory regulations that set a clear context for responsible corporate behavior. Today, this framework has eroded and given way to a situation in which corporations explicitly and voluntarily take responsibility for social issues. This shift from implicit to explicit corporate social responsibility is an indication of a major institutional change epitomized by the deconstruction of ‘old’ and the reconstruction of ‘new’ institutions. In the course of this change, corporations, state actors, and civil society organizations compete for their ideas and interests in what we call a fight for myths. The paper traces this fight for myths and the changing understanding of corporate responsibility in Germany.
Financialization generally denotes the growing importance of the financial market for more and more sectors of societal life. In this article, I investigate how financialization has spread outside the financial sector and which political processes allowed for that to happen. Empirically, I focus on the financialization of sustainability in the case of sustainability accounting. Sustainability accounting seeks to integrate non-financial aspects, such as social, environmental or ethical topics, into financial accounting assessments, such as corporate annual reports. I explore the politics of the financialization of sustainability and how it is being increasingly constructed through quantitative indicators in order to enable financial accounting. I reconstruct which political processes allowed for this financialization, which political actors are involved and — as a result — how sustainability becomes financialized.
In the last few years corporate social responsibility (CSR) has become a new buzzword in Germany. Corporations have established own CSR departments, issued regularly CSR reports, have become members of CSR associations or initiatives and collectively sent out the message that they comprehensively master their societal responsibilities. Thereby, social responsibility of corporations is not an entirely new phenomenon in Germany. In the paper the change from an implicit social responsibility of corporations as institutionalized in laws and regulations in the times of Germany Inc. to an explicitly voluntary CSR will be reconstructed.
This empirical study explores the financialization of social sustainability driven by sustainability accounting and reporting initiatives (SARIs). Since no globally accepted definition of what social sustainability encompasses exists, the paper asks how social sustainability is translated into the financial market language by SARIs as they provide standards for disclosing corporate non-financial performance and promote their concepts of social sustainability. The paper uses a two-step qualitative content analysis. First, it operationalizes social sustainability based on the empirical data of six sustainability rating agencies. Second, this operationalization is compared with the concepts created by three SARIs. The paper shows significant differences between the concepts of the SARIs and the rating agencies. While the rating agencies altogether interpret social sustainability with 83 distinct aspects, the SARIs, although differently created, use significant reduced concepts where 20% of these aspects are absent. The result of this financialization process could be a simplified and financially determined concept of social sustainability within die socially discourse. The research is limited to social sustainability and its financialization by SARIs. Individual indicators and their way or intensity to capture aspects of social sustainability were not part of the research interest. Further research should investigate the economic and the ecological pillars of sustainability as well as the usage of such financialized concepts within the society and especially by corporations. The paper unfolds the arbitrariness of operationalizing a qualitative phenomenon like social sustainability through the financial system. It discloses the need for looking at the mechanisms behind such processes and at the interests of the actors behind the frameworks. The paper reveals the financialization process driven by SARIs and demonstrates its simplifying effects on the concept of social sustainability. Furthermore, the paper shows that SARIs as metrics for non-financial aspects are troubled with a lack of transparency and a lack of convergence.
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