Saving the World? It's a Job for AccountantsMEASUREMENT AND ACCOUNTING RULES HAVE AN IMPACT ON CORPORATE BEHAVIOR, AND CAN HENCE PROMOTE CORPORATE SOCIAL RESPONSIBILITY, SAYS ARIELA CAGLIO IN THE BOCCONI PODCAST
Modern accounting professionals don’t shy away from responsibilities. Ariela Caglio, the Professor of Accounting hosted in the latest episode of the Clarity in a Messy World podcast, says they can literally “save the world”.
“I believe that if we want to really and effectively address our main environmental and social challenges, businesses should be required to be transparent and to communicate how the natural resources they exploit or conserve, and the social benefits they produce or neglect, are factored into their value creation processes.”, she says. “That's where accounting comes in, and we accounting scholars refer to this as the real effects hypothesis: measurement and accounting rules have an impact on corporate behavior! What gets measured gets done, and what gets measured gets managed, and in this sense accounting can promote Corporate Social Responsibility (CSR) and behavioral change. Hence, accountants can save the world!.”
Professor Caglio warns against covidwashing, a term that echoes greenwashing. “I refer to the specific disclosure strategies aimed at manipulating the judgment of shareholders and stakeholders in general during the Covid pandemic and in the recovery period. Just as greenwashing is defined as symbolic information that is provided by an organization without substantive actions, so we identify covidwashing as positive information about a firm's Covid response, without the firm taking the corresponding actions.”
Clarity in a Messy World, hosted by David W. Callahan, is the Bocconi podcast series that looks at the causes behind the most confounding issues of our time. You can follow the podcasts on Apple Podcasts, Google Podcasts, Spotify, Spreaker e YouTube.
by Fabio Todesco