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Institutional pressures and the accounting and reporting of environmental liabilities
Author(s) -
Negash Minga,
Lemma Tesfaye T.
Publication year - 2020
Publication title -
business strategy and the environment
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 2.123
H-Index - 105
eISSN - 1099-0836
pISSN - 0964-4733
DOI - 10.1002/bse.2480
Subject(s) - normative , legitimacy , accountability , institutionalisation , accounting , institutional theory , environmental accounting , social accounting , context (archaeology) , legitimation , business , public relations , sociology , political science , accounting information system , law , politics , social science , paleontology , biology
The study explores the role of institutional forces in shaping corporate accounting and reporting for environmental liabilities practice within the context of South Africa. Drawing on the literature that conceptualizes accounting as a “social and institutional practice” and using Scott's institutional pillars approach, we qualitatively analyze data obtained through in‐depth interviews and documentary reviews and demonstrate that environmental liabilities reported on financial statements of South African companies may not reflect the full extent of environmental obligations stemming from their operations. The enabling environment for this dereliction of corporate responsibility is fostered by the following: (a) a mosaic of weakly enforced laws, acts, and regulations that constitutes the regulative pillar; (b) a cultural‐cognitive template that is still at an early stage of its development; and (c) a stronger normative pillar reinforced by relatively powerful actors who support the institutionalization of normative modes and conflicts and/or contradictions among actors who support the regulative institutions. Our findings suggest that companies in South Africa tend to adopt practices that foster production and disclosure of environmental information that comply with the normatively sanctioned scripts to maintain legitimacy with important stakeholders while decoupling these practices from the regulative prescripts that call for greater environmental accountability.