Navigational space for the absence of sustainability assurance in China
Accounting, Auditing & Accountability Journal
ISSN: 0951-3574
Article publication date: 4 October 2022
Issue publication date: 19 June 2023
Abstract
Purpose
This case study presents a critical analysis of why and how corporate managers in China are reluctant to adopt sustainability reporting assurance (SRA) provided by externally independent third-party assurers, despite the fact that it is acknowledged as a value-adding activity globally.
Design/methodology/approach
A longitudinal fieldwork case study was conducted from 2014 to 2019 in a Chinese central state-owned enterprise (CSOE), a pioneer in sustainability reporting practice since the mid-2000s, to collect first-hand empirical data on managerial perceptions of the adoption of external SRA. Semi-structured interviews with 25 managers involved in sustainability (reporting) practice were conducted. The interview data were triangulated with an analysis of archival documents and board meeting minutes pertaining to the undertakings of sustainability practices in the case study organization.
Findings
Our empirical analysis suggests that while managers recognize the benefits of adopting external SRA in enhancing the legitimacy of sustainability accountability, they oppose SRA because of their deep-rooted allegiance to the dominant logic of sociopolitical stability in China. SRA is envisaged to risk the stability of the socialist ideology with which CSOEs are imbued. Therefore, any transformational approach to accepting a novel (foreign) practice must be molded to gain control and autonomy, thereby maintain the hegemony of stability logic. Instead of disregarding external verification, managers of our case SOE appear to harness sustainability reporting as a navigational space to engage in internally crafted alternative manners in order to resist the rationality of SRA.
Originality/value
The empirical analysis presents a nuanced explanation as to why internal managers have hitherto been reluctant to embrace the embedding of independent assurance into the sustainability reporting process. Our prolonged fieldwork provides ample context-specific, intra-organizational evidence regarding the absence of SRA in Chinese CSOEs, which warrants more attention given their considerable presence in the global economy. In addition, the empirical analysis contributes to our understanding of the managerial capture of sustainability issues in a specific context of state capitalism and how organizations and individuals in an authoritarian regime interpret and respond to novel discourses derived from distinct institutional settings.
Keywords
Acknowledgements
The authors would like to thank Prof. Lee Parker and three anonymous reviewers for their constructive feedbacks on the earlier versions of the paper and for their patient guidance throughout the process. Particularly, the lead author would like to thank the original co-author, Dr Mirwais Usmani (Brunel University), who sadly passed away in August 2020, for his assistance in developing the ideas and positive discussions regarding the potential contributions of the paper. The authors are also grateful to Prof. Ataur Belal (University of Birmingham), Prof. Jan Bebbington (Lancaster University), Dr Massimo Contrafatto (University of Sussex), Dr Muhammad Al Mahameed (Copenhagen Business School) for valuable comments on the paper and enduring encouragement. The authors would like to express their gratitude to all the interviewees who were willing to share their knowledge and experiences regarding sustainability reporting and assurance for the case study SOE. The usual disclaimers apply.
Citation
Li, T., Hidayah, N.N., Lyu, O. and Lowe, A. (2023), "Navigational space for the absence of sustainability assurance in China", Accounting, Auditing & Accountability Journal, Vol. 36 No. 5, pp. 1221-1248. https://doi.org/10.1108/AAAJ-04-2020-4514
Publisher
:Emerald Publishing Limited
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