Accounting for whom? The financialisation of the environmental economic transition

Abstract

ABSTRACT Accounting standard-setters including the International Financial Reporting Foundation have recently begun to revisit the relationship between accounting and sustainability to address issues of environmental economic transition. How has sustainability become an issue of interest to accounting standard-setters? And how do accounting standards intend to contribute to the environmental economic transition? Scholars of international political economy and cognate fields have devoted little attention to the study of international accounting standards, particularly in relations to sustainability. Drawing on a set of qualitative data and an interdisciplinary literature on finance and financialisation, this article first argues that accounting standard-setters’ interest in sustainability is the result of the incremental transformation of environmental issues into meaningful information for investors’ decision-making. Secondly, it shows that these standards and their development are based on the premise that the environmental economic transition depends on the provision of information that primarily meets the needs of investors, contrasting starkly with the original underpinnings of sustainability accounting. Overall, both the fact that financial accounting standard-setters are becoming involved in sustainability, and the way that they are addressing this issue, are further evidence of a financialisation of the environmental economic transition.