Just Look at the Numbers: A Case Study on Quantification in Corporate Environmental Disclosures

Abstract

This paper sheds further light on the role of quantification in corporate environmental disclosures. Quantification is an inherently social practice, which has attracted a fair amount of academic interest in recent years. At the same time, in the field of social and environmental accounting there is a paucity of research on quantification or the role it plays for organisations, for organisational communication and in societies more broadly. Accordingly, in this paper, we will draw on a qualitative case study to discuss the potential implications that might arise from the use of quantified information in corporate environmental disclosures. Our case study illustrates the diverse effects of quantification suggested in the prior literature by placing them in the context of corporate environmental disclosures. We discuss how quantification implies fake precisionism and promotes commensuration of incomparables, thereby limiting the discussion to themes and questions preferred by company management. We maintain that quantification, while appearing to produce neutral and value-free information, has a substantive ethical dimension through how it implicates accountability relationships as well as the respective power relations between diverse stakeholders in societies.

Accountingisation and the narrative (re)turn of business model information in corporate reporting

“…This is the rationale we could not limit the concept of accountingisation to the monetary commiseration only because we analysed corporate factors and performance (especially in non-financial reports) that can be arduously expressed through monetary information. Thus, accountigisation manifests more prominently in the quantification instead of monetisation, so confirming that accountingisation may refer to the broad approach of using quantitative measures, which are not limited to financial measures and monetary values (Dumay, 2009;Järvinen et al, 2020;Jones and Dugdale, 2001;Martin-Sardesai et al, 2020a, 2020b.…”

“…The main emphasis in a narrative is the connection among fragmented pieces of information in a story (Holland, 2004). Narratives can help link the different components of a company’s BM while numbers can give objective credibility to those descriptions and reduce ambiguity (Chaminade and Roberts, 2003; Holland, 2004; Järvinen et al , 2020; Robson, 1992). As Dumay and Rooney (2016) point out, neither numbers nor narratives (nor their combination) can adequately meet the needs of all an organisation’s stakeholders.…”

“…As Chaminade and Roberts (2003) explain, they follow the mantra of “what gets measured gets managed”, assuming that measuring itself is a way to ensure follow-through. Organisations consider quantified information more accurate and comparable across organisations than qualitative information (Järvinen et al , 2020). Further, they regard that monetary information is higher quality than qualitative information (Wiseman, 1982).…”

“…Further, it is a language that inherently implies quantifying objectives (Robson, 1992) and an integral part of reporting practice. According to Järvinen et al (2020), quantification implies "fake precisionism" and "limits the discussion to themes and questions preferred by company management". As a result, BM information in corporate reports can fall into an accountingisation trap, whereby numbers are privileged over narrative (Dumay and Roslender, 2013).…”

Framing water as a financial risk: Reviewing the processes shaping a narrative

“…In the process of developing metrics that conform water risks to the rigid format demanded by the financial sector, ESG rating agencies by extension also play a much larger role as "experts," ultimately steering how the financial market perceives and addresses these water risks. The positioning of ESG risk rating agencies as "experts" is further cemented through the emphasis given to quantification, where this particular knowledge system contributes to building a certain culture of expertise, labeling those who can contribute as "experts" (Järvinen et al, 2020).…”