From Values to Value: The Commensuration of Sustainability Reporting and the Crowding Out of Morality

Abstract

Drawing on extensive case study evidence, this study unpacks sustainability reporting’s evolution from a moral values–based practice toward a financialized value–based one. We argue that this transition can be seen as a commensuration project. We examine the dynamics of this process and its implications for sustainability-related outcomes. We find that increased levels of commensuration have moved sustainability reporting away from an original emphasis on morality and values to a focus on strategic value creation for the firm. We theorize this process as a “crowding out of morality” that is enabled by a rigid cognitive framing of social and environmental issues (objectification) and the monetized coordination of relevant social interactions (marketization). We outline implications of our analysis for the scholarly debates on the institutionalization of sustainability reporting and commensuration.

Prison break from financialization: the case of the PRI reporting and assessment framework

“…Attention over the past decade has shifted from the dominance of quantitative economic value toward the commensuration of the non-economic value (Fourcade, 2011a, b; Gray, 2010; van Bommel et al. , 2022).…”

“…, 2017; Svetlova, 2018). Organizations such as the PRI abide by the same rules and have traditionally used financialization arguments to advance their cause (Etzion and Ferraro, 2010; Giamporcaro and Gond, 2016; Gond and Piani, 2013; van Bommel et al. , 2022).…”

“…The preference of sustainability accounting standards for financialization Attention over the past decade has shifted from the dominance of quantitative economic value toward the commensuration of the non-economic value (Fourcade, 2011a, b;Gray, 2010;van Bommel et al, 2022). To be deemed necessary (of value), sustainability issues have been mainly transformed into numbers that could later be valued financially (Barman, 2015;Chiapello, 2015;Cuckston, 2013Cuckston, , 2018, notably through "standards" (Adams and Narayanan, 2007;Clune and O'Dwyer, 2020;Slager et al, 2012).…”

Nonfinancial Reporting and Real Sustainable Change: Relationship Status—It’s Complicated

“…Finally, while the above contributions bring us closer to understanding the complicated relationship between nonfinancial reporting and real sustainable change, van Bommel et al (2023) take us a step back and allows for reflection on some potentially unintended consequences. Drawing on extensive case study evidence, van Bommel et al (2023) delve into the ethical dimension of nonfinancial reporting and show that it has metamorphosed from a value-based practice into a monetized one, thus leading to a crowding out of morality in favor of strategic and instrumental considerations of reporting firms. The authors’ analysis highlights that as reporting, based on a process described as commensuration, shifted from an emphasis on moral values toward a focus on financial value creation, it became more difficult to associate nonfinancial issues with potential moral dilemmas.…”

“…These studies are important as they distinguish relative from absolute levels of real sustainable change (Bauckloh et al, 2023), examine the role of negative media coverage (Fu, 2023), and scrutinize the internal versus external effects that influence nonfinancial performance (Crace & Gehman, 2023). Finally, van Bommel et al (2023) show that reporting shifted from an emphasis on morally charged values toward a focus on financial value creation, making it more difficult to associate sustainability issues with potential moral dilemmas.…”