On 27 November 2020, the EAA hosted its third in a series of virtual events providing the IFRS Foundation a forum for reaching out to the academic community and receiving live input on its most salient projects. As episode #3 of the EAA’s Virtual IFRS/EAA Workshop Series, we conducted a session on the IFRS Foundation’s Consultation Paper on Sustainability Reporting. This workshop was attended by up to 250 participants and generated lively discussion. Please view the program and watch the video.
This event, I felt, was important. Many would agree that sustainable development is one of the key issues facing humanity. As part of a broader regulatory toolbox, accounting, reporting and disclosure should be harnessed to nudge the global economy towards more sustainable ways. The IFRS Foundation is now proposing to become a key player in harmonizing sustainability reporting worldwide. At first blush, one would think – or I thought – that this is unequivocally a good idea. But as our workshop (and other recent entries on this blog here, here, here and here) clearly showed, accounting academia is deeply divided on this matter – including over what “sustainability reporting” is and what it should look like. At the risk of oversimplifying, I see one “camp” thinking that enlisting the power of capital markets and managerial incentives in this cause might be a good starting point. The other “camp” worries that sustainability reporting targeted primarily at capital providers would facilitate further greenwashing and inaction by firms, while delaying more ambitious regulatory measures that are urgently needed if we’re serious about the Paris Agreement’s 2° C goal.
This rift going through our academic community worries me deeply – as an accounting scholar, as a global citizen and father, and as EAA President trying to make sure that the EAA remains a home for accounting academics of all regions, genders, temperaments and paradigms. First, as a scholar, frankly, I am still struggling to makes heads or tails of the two views I sketched above – but I know for a fact that both views are espoused by genuinely competent and passionate scholars united in a common cause: to save the planet as we know it. Where good people with the best of intentions at heart disagree on such a high-stakes issue, I feel that I need to do my best to understand the assumptions, theories, data, and even the unquestioned beliefs and ideologies (?), on which these opposing views are founded.
Second, as a citizen and father, I worry that accounting academia may be dropping the ball when we should be speaking up to decision-makers loudly, clearly, and ideally united. With academic comment letters bombarding the IFRS Foundation with different messages, I worry that the Foundation trustees will drown in information overload and ultimately conclude that accounting academia has “conflicting views” on this matter and should best be ignored. A related worry is that individuals or sub-groups that happen to have preferred access to decision-makers’ ears may steer the debate in a direction that is neither balanced nor well-founded in all available evidence. I am therefore encouraged by the fact that some of us are trying to reach out across the divide between the two camps – in what Giovanna Michelon aptly terms “academic empathy” – to understand and integrate the “other camp’s” views. And I am grateful to those who grasp those outstretched hands and start a dialogue to bring out the common denominator that we can agree on despite all differences. Because – assuming that none of the camps somehow has the natural right to claim knowing “the truth” – that common denominator is what decision makers should get to hear from us, loudly, clearly, and on all channels.
Third, as EAA President, I see with worry that some “camps”, years ago, have started staying away from our Annual Congress and attending only their own focused academic gatherings. Some also tell me they no longer submit to European Accounting Review (EAR) because the journal has become too “American” and will not respect, let alone publish, the kind of research they do. This is a pity because these scholars and their work could enrich the EAA as an association and EAR as an academic outlet. Also, as we see from the “bubbles” and “echo chambers” in the social media, being exposed to only those who know agree with you is not a good way to nurture tolerance, understanding and perspective – key ingredients to growing academically. I believe we at the EAA have done a lot in recent years to send credible signals that diversity is our genuine aspiration. For example, the Editorial teams and boards of EAR and Accounting in Europe reflect the broadest range of research topics and paradigms. And the EAA Accounting Resources Center allows all members uncensored communication. I would wholeheartedly like to invite all who felt at some point that the EAA was no longer their academic home back into the folds of the EAA Community!
I wish you all a few relaxing days with your loved ones and a return back to some kind of normal in 2021.
All the best
Thorsten Sellhorn, EAA President 2019-2021