The purpose of this paper is to provide a reflection on our time of creating and editing AEAM. Our planet is and will continue to experience some environmental turmoil in the future. Accounting educators and the professionals need to determine how they can contribute to abating the environmental consequences of past and present political and economic decisions that have placed the planet in this perilous state. The volumes we produced included articles discussing accounting’s role in assessing and reporting on environmental conditions and some suggest how accounting can contribute to alleviating some of these problems. The reflections we provide are our understandings of the contributions that the works in the first five volumes of the series have made in advancing the discussion in the field of environmental accounting. As editors we have a unique view of these contributions.
Almost certainly more than any other single factor, the adoption of the Kyoto Protocol (Kyoto) in December 1997 triggered increased discussion on the possibility for a sustainable future for our planet. Considered a watershed event in recognizing the need to reduce greenhouse gas (GHG) emissions, Kyoto provided a strong impetus for research, not only with respect to GHG reductions, but also for accounting issues associated with environmental measurements and disclosures. Thus, a growing number of accounting scholars, many of them new to the field, started producing studies concerned with environmental accounting and disclosure. Unfortunately, because the major North American mainstream accounting journals had largely ignored the social and environmental realm over the last part of the twentieth century (see, e.g., Cho & Patten, 2010; Deegan & Soltys, 2007; Patten, 2013), publication outlets for this expanding body of work were limited to a few key journals including Accounting, Organizations and Society, Accounting, Auditing & Accountability Journal, Critical Perspectives on Accounting, and a handful of others (many of which published environmental-themed articles only sporadically). Although our original intent was to publish a book on environmental accounting, a publisher’s representative instead suggested we start a journal. Thanks to the JAI publishers agreeing in 1998 to its launch, Advances in Environmental Accounting and Management (AEAM) now provided another quality outlet for environmental accounting research.
We published the first issue of AEAM in 2000 and, as would be the case throughout our tenure as editors of the journal, topical coverage across the contributions was wide. The volume included theoretical articles dealing with accounting, ethics, environment, and the role of business in dealing with environmental issues. Reflecting a debate that continues to this day, the inaugural AEAM also included empirical pieces providing support for environmental disclosure being explained by legitimacy theory (Patten, 2000) and alternatively, by voluntary disclosure theory (Bewley & Li, 2000).
By the time the second volume was published in 2002 (by Elsevier which acquired JAI), Kyoto was closer to ratification and climate change continued to be much debated. The relatively young European Union (EU) was committed to the Kyoto Protocol and was in the process of developing a system of cap-and-trade to reduce GHG emissions.1 But the importance of Kyoto was overshadowed by the turmoil in the financial markets in the United States at the turn of the twenty-first century as, for example, several large corporations including Enron, WorldCom, and Tyco International were involved in major financial scandals. Many considered accountants culpable in these scandals, and Enron’s financial manipulations ultimately led to the downfall of its auditor, the Big 8 accounting firm, Arthur Andersen. These developments provided a strong impetus for passage of the Sarbanes–Oxley Act at the end of July 2002.
In general, the papers appearing in the second volume largely expressed concerns about corporate environmental (and sometimes social) reporting. For example, one of the articles (Epstein, 2004) provided a history of social accounting and indicated that, while the level of social disclosure had increased, its quality had not, thus making a case for integrating social accounting and management decision-making. Another article (Hunt & Grinnell, 2004) echoed findings of an earlier study (Schmidheiny & Zorraquin, 1998) by documenting that financial analysts do not find environmental disclosures made in annual reports particularly useful. In some respects, the largest theme within the second volume was that environmental disclosures, which are mostly voluntary, are motivated by something other than the reflection of what actually occurred. Finally, the issue also included what we believe to be the first accounting article discussing disclosures within a cap-and-trade system as it focused on the U.S. electric utilities and cap-and-trade for sulfur dioxide emissions (Freedman, Jaggi, & Stagliano, 2004).
By 2006, when the third volume was published, the EU already had begun its cap-and-trade system for GHG emissions, although it was only a practice round for the real system that would begin two years later. In the United States, the Bush administration continued to deny human culpability for global warming. On a more positive note, substantially more firms across the world were producing social/environmental sustainability reports and many of them were following the Global Reporting Initiative guidelines.
While the third volume of AEAM included articles providing at least some degree of optimism in terms of environmental disclosures and performance, these were tempered by concerns with the progress that was really being made. The overall story from this volume seems to be that if companies make a real commitment to improve environmental performance, it can be achieved. However, there is a difference between real commitment and paying lip service to environmental concerns, and unfortunately, the latter seems to be the norm.
Emerald purchased AEAM from Elsevier and the fourth volume was published by Emerald in 2010. By this time, the EU’s real cap-and-trade system was up and running, but in spite of this, and other efforts worldwide, global GHG emissions continued to grow. Positively, the push for utilizing renewable energy sources including wind, solar, and geo-thermal continued to grow. The title of the fourth volume was “Sustainability, Environmental Performance and Disclosures,” partly to reflect that sustainability had become a hot topic in academia. The American Accounting Association had a plenary session in its annual meeting devoted to sustainability and it was also the theme of the annual Academy of Management meeting.
As was true of most of the other volumes in this series, the fourth volume contained considerable variety with respect to the issues examined. One article (Gray, Owen, & Adams, 2010) provided the basis for a theory of social accounting (specifically noting environmental accounting as a subset of the theory), while another discussed the limitations with respect to publishing in the social and environmental accounting domain (Cho & Patten, 2010). A third article (Brown, Guidry, & Patten, 2010) documented that the quality of stand-alone sustainability reports appears to matter with respect to impacts on corporate reputation. Consistent with one of the articles from the prior issue, one of the papers (Weisnner, Epstein, & Bagozzi, 2010) showed that firms making a true commitment to improve their environmental performance by integrating the environment into their managerial decisions do the best environmentally. Finally, the volume contained a study (Freedman & Jaggi, 2010) of disclosures concerning Kyoto and GHG emissions that found companies headquartered in the EU disclosed less than Canadian or Japanese companies (and that environmental disclosures within the EU companies differed with regard to quantity as well as quality).
Our last volume was published in 2014 and it included papers concerning Chinese social accounting, corporate governance and environmental performance, measuring environmental performance, developing a framework linking management controls to sustainability and the impact on companies of the SEC mandated climate change regulation. Although the papers seemed to continue the trend of both good and bad news about business and sustainability, we cannot help feeling that the small incremental steps toward a cleaner and healthier future for the planet are not leading to successful results.
We began this journey as editors with hopes for the environment and the role that the accounting profession might play in helping to protect it, but more than a decade and a half in, they still remain as hopes. Though several countries of the world are still discussing ways to reduce their impacts on climate change, GHG emissions continue to increase. Kyoto had a success in that the EU did decrease its overall GHG emissions by 8 percent compared to 1990s emissions, but Australia, which had become a belated participant in Kyoto, instituted and then rescinded a carbon tax. Canada dropped out of the agreement altogether. More positively, the United States and China have orally agreed to reduce their GHG emissions while the EU agreed to a 40 percent reduction. Of course, it is only through execution that such statements become more meaningful and we will see what actually transpires.
The Intergovernmental Panel on Climate Change (IPCC) indicated that the effects of climate change are already upon us. Forests are dying, land ice is melting throughout the world, seas are rising resulting in coastal flooding, and heat waves are killing crops and people (Gillis, 2014). Drastic action is needed and the accounting profession has not been at the forefront of the social/environmental/sustainability movement. While many firms have produced stand-alone environmental/sustainability reports and some of these have been audited, these companies represent a small fraction of the world’s business organizations. Furthermore, given the limited regulations regarding environmental (and other sustainability) disclosure (and the findings that even those that are mandated seem to lack meaningful compliance – see, e.g., Cho, Freedman, & Patten, 2012), it appears that most of the corporate sustainability reporting is more about image than transparent accountability. Without greater accountability for the consequences of industrialization and modernity, the future of the planet and its inhabitants, as documented by the IPCC, will face ever increasing trouble.
We really believe that accounting can play a positive role in addressing the environmental concerns facing the world, but we must admit a degree of pessimism in that regard. As we stated in the introduction to our last volume of AEAM, accounting educators, at least in the United States, rarely teach the issues of sustainable/environmental accounting. And while AEAM has been joined by at least a few other academic outlets for sustainability-themed research, the major mainstream North American accounting research journals, in spite of publishing a few articles purportedly dealing with social or environmental connections, do not seem to understand the real nature of the problem (see, e.g., Patten, 2013). Accordingly, we see the role of journals such as this one as immeasurably important.
Our reflection would not be complete without some acknowledgment of those who helped to make our journal the success that we believe it has been. First and foremost amongst this group are the researchers who considered AEAM as an outlet for their studies. We appreciate not only the choice to submit to the journal, but also that so many of the authors were willing to endure the process of revising and resubmitting their articles (some for a number of rounds). As editors, our work was also made easier by our supportive editorial board. One of the critical activities in creating AEAM was the formation of the editorial board. Its creation was important because the body both provides feedback to the editors about strategic planning for the journal and also serves as a source for choosing the right people to review the submitted papers (not to mention the members doing reviews themselves). Since we were not sure what specific environmental topics would be covered by submissions, we decided to create a board whose expertise spanned many potential areas. Accordingly, our choice of the board members was influenced by our expectation of submissions on the broad themes related to environmental accounting, management, and economics, and we believe we did a good job of bringing in recognized scholars across all of these areas.
Particularly in the process of producing the first two volumes, we discovered that there were some reviewers who were dependable and provided excellent and timely reviews. This was true for both editorial board members and ad hoc reviewers. Like all peer-reviewed publication outlets, reliance on ad hoc reviewers is a crucial factor in running the journal, and we chose these reviewers based on their expertise with respect to the topic covered by the submission (e.g., a particular ad hoc reviewer might have been cited by authors in their articles or he or she may have had a reputation in the area). It is amazing that, almost without exception, when asked, these people would readily agree to review a paper for the journal, and most of the reviews were excellent.
Over the years, we received much help, advice, and encouragement from our colleagues with respect to the journal. And while we cannot name everyone, we would like to especially thank Den Patten and A. J. Stagliano, who served as associate editors for a number of the volumes, and Nola Buhr, for their contributions, cooperation, and excellent and timely reviews. We enjoyed editing these five volumes of AEAM.
1. The United States, however, was moving in the opposite direction. Bill Clinton, U.S. President at the time of Kyoto’s adoption, chose not to ask the Senate to ratify the agreement, based largely on substantial opposition to the treaty amongst legislators. The next President, George W. Bush, did not support Kyoto and did not believe that global warming was even a problem, and obviously never called for passage of Kyoto in the United States. And although Barack Obama, who came to office in 2009, was far more liberal on environmental issues, he, too, has never pressured for ratification of the treaty. Thus, the United States has never been a formal participant in the Kyoto Protocol.
Bewley, K., & Li, Y. (2000). Disclosure of environmental information by Canadian manufacturing companies: A voluntary disclosure perspective. Advances in Environmental Accounting and Management, 1, 201–226.
Brown, D. L., Guidry, R. P., & Patten, D. M. (2010). Sustainability reporting and perceptions of corporate reputation: An analysis using Fortune most admired scores. Advances in Environmental Accounting and Management, 4, 83–104.
Cho, C. H., Freedman, M., & Patten, D. M. (2012). Corporate disclosure of environmental capital expenditures: A test of alternative theories. Accounting, Auditing and Accountability Journal, 25(3), 486–507.
Cho, C. H., & Patten, D. M. (2010). Social and environmental accounting in North America: Who? Where? Whither? Advances in Environmental Accounting and Management, 4, 161–177.
Deegan, C., & Soltys, S. (2007). Social accounting research: An Australian perspective. Accounting Forum, 31(1), 73–89.
Epstein, M. J. (2004). The identification, measurement and reporting of corporate social impacts: Past, present and future. Advances in Environmental Accounting and Management, 2, 1–30.
Freedman, M., & Jaggi, B. (2010). Global warming and corporate disclosures: A comparative analysis of companies from the European Union, Japan and Canada. Advances in Environmental Accounting and Management, 4, 129–160.
Freedman, M., Jaggi, B., & Stagliano, A. J. (2004). Pollution disclosures by electric utilities: An evaluation of the first phase of the 1990 Clean Air Act. Advances in Environmental Accounting and Management, 2.
Gillis, J. (2014). U.N. panel issues its starkest warning on global warming. The New York Times, November 3, p. A6.
Gray, R., Owen, D., & Adams, C. (2010). Some theories for social accounting? A review essay and tentative pedagogic categorization of theorisations around social accounting. Advances in Environmental Accounting and Management, 4, 1–54.
Hunt, H. G., & Grinnell, J. (2004). Financial analysts’ views of the value of environmental information. Advances in Environmental Accounting and Management, 2, 101–120.
Patten, D. M. (2000). Changing superfund disclosure and its relation to the provision of other environmental information. Advances in Environmental Accounting and Management, 1, 101–122.
Patten, D. M. (2013). Lessons from the third wave: A reflection on the rediscovery of corporate social responsibility by the mainstream accounting research community. Financial Reporting, 2(1), 9–26.
Schmidheiny, S., & Zorraquin, F. J. L. (1998). Financing change. The financial community, eco-efficiency, and sustainable development. Cambridge, MA: MIT Press.
Weisnner, P. S., Epstein, M. J., & Bagozzi, R. P. (2010). Environmental proactivity and performance. Advances in Environmental Accounting and Management, 4, 105–128.