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a v a i l a b l e a t w w w. s c i e n c e d i r e c t . c o m

w w w. e l s e v i e r. c o m / l o c a t e / e c o l e c o n

METHODS

Accounting technologies and sustainability assessment models

Jan Bebbingtona , Judy Brownb , Bob Framec,
a

Centre for Social and Environmental Accounting Research, University of St Andrews, St Andrews KY16 9SS, Scotland, UK School of Accounting and Commercial Law, Victoria University of Wellington, PO Box 600, Wellington, New Zealand c Sustainability and Society, Landcare Research, PO Box 40, Lincoln 7640, New Zealand
b

AR TIC LE I N FO
Article history: Received 13 June 2006 Received in revised form 4 October 2006 Accepted 28 October 2006 Available online 22 December 2006 Keywords: Full cost accounting Sustainable development Sustainability assessment models Costbenefit analysis Dialogic accounting

ABS TR ACT
Within ecological economics there is recognition of the need for new approaches to decisionmaking to support sustainable development initiatives. There is an increasing acknowledgement of the limitations of costbenefit analysis approaches as a measure of the (un)sustainability of organizational activities. These are viewed as particularly inappropriate within the participatory settings that sustainable development proponents seek to foster. They also fail to deal with the highly contested nature of sustainable development discourse in contemporary pluralist democracies. While advances have been made in the field of multicriteria decision-making, there is still a relative dearth of versatile models that accommodate monetization in a way that recognizes the limits of calculative technologies. This article introduces readers to developments within the accounting discipline designed to support sustainable development decision-making and evaluation. In particular, it proposes sustainability assessment models as a viable alternative to costbenefit analysis. Sustainability assessment models are based on an inter-disciplinary approach that recognizes the need for accountings that facilitate more participatory forms of decision-making and accountability. As such, they address many of the weaknesses in current approaches to cost benefit analysis. The authors first experiences with sustainability assessment models were with BP and the United Kingdom oil and gas sector, where models were developed as a means of making previously external costs more central to organizational decision-making. Later work has included exploration of a range of decision-making situations in private and public sector organizations in both the United Kingdom and New Zealand. This has involved more explicit attention to plural values and issues of participation, dialogue and democracy. 2006 Elsevier B.V. All rights reserved.

1.

Introduction

There is a widely recognized need for individuals, organizations and societies to find models, metrics and tools for articulating the extent to which, and the ways in which,

current activities are unsustainable. This need arises on multiple layers ranging from supra-national (e.g. the negotiation of protocols for environmental protection), national (e.g. via some version of greening GDP) and sub-national levels (e.g. in regional development forums). This paper's

Corresponding author. Tel.: +64 3 325 6701x3744; fax: +64 3 325 6718. E-mail address: frameb@landcareresearch.co.nz (B. Frame).

0921-8009/$ - see front matter 2006 Elsevier B.V. All rights reserved. doi:10.1016/j.ecolecon.2006.10.021

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focus is on sub-national efforts by organizations and stakeholder groups to understand sustainable development (SD) impacts and specifically on the use of micro-level accounting technologies to inform that understanding.1 There is considerable literature on sustainability accounting technologies at the organizational level (most prominently published in journals such as the Accounting, Auditing and Accountability Journal, Accounting Forum, Accounting Organizations and Society, Critical Perspectives on Accounting as well as in research reports commissioned by various professional accounting bodies). Much of this literature tackles the same problem-set as the ecological economics literature, albeit that the level of analysis is somewhat different. This paper, therefore, aims to introduce to a potentially new audience attempts by accountants at developing decision support tools for organizations and stakeholder groups seeking to perform SD evaluations and, especially, to capture information on the wider impacts of organizational activities. These tools are akin to multi-criteria decision-making (MCDM) and life-cycle analysis methods, although are typically described within the accounting literature as full cost accounting (FCA) approaches (see Bebbington et al. (2001) for an overview of the field).2 We suggest that examining activities at the organization level is helpful to a broader debate concerning the uptake of tools that can move us away from unsustainability. While the impact of legal regimes, policy frameworks and cultural values in society impact on how an organization conducts itself, there are various influences which operate at the level of the firm (e.g. mission and values, strategic orientation, specific routines for allocating capital, stakeholder interaction). Further, if one conceptualizes the combined impact of organizations in a particular physical space to be the outcome of direct and indirect household consumption activities, then organizations play an important role in meeting consumption demand. Their actions and the control of their actions are likely to play an important part in any evolution towards SD. Sustainable development is a highly contested concept. It includes a broad range of social, environmental and cultural dimensions in addition to economic aspects. Issues are multidisciplinary rather than limited to a single discipline. Complexity and uncertainty are the norm. SD is also an ideologically loaded area. Conflicts of interest and in perspective are widespread, ranging from a business as usual approach, through adaptation within the present system, to those seeking radical change (Brown and Fraser, 2006). Such diversity is not unexpected in a democratic society. As O'Connor (1999, 674675) puts it: where decision stakes are high and there are scientifically non-resolvable uncertainties, value-plurality and social controversies over decision criteria tend to emerge as glaring social facts many different points of view can be expressed, none of which is wholly convincing (to
1 Accounting in this context relates to accounting as practiced at the organizational level, in contrast to accounting undertaken by economists and accountants at the national level. 2 Full cost accounting, like costbenefit analysis, involves the monetization of externalities. However, as will be argued, it has greater potential to be more participatory and pluralist in its approach.

everybody, all the time), none of which deals entirely adequately with all aspects of the situation, but none of which can be wholly rejected (by everybody) as having nothing at all relevant to say about the situation and what should be done and why. Growing recognition of this complex socio-political context has brought calls for more participative and ideologically open approaches to SD assessment (O'Connor, 1999; Meppem and Bourke, 1999; Sderbaum, 1999, 2004a, in press; Astleithner and Hamedinger, 2003); see also the post-normal science literature (e.g. Funtowicz and Ravetz, 1993; Luks, 1999; Haag and Kaupenjohann, 2001; Mayumi and Giampietro, 2006). This requires a move away from technocratic decision-making and towards more dialogic approaches to decision-modelling and analysis. There is a need for SD models based on a multi-dimensional, social constructionist approach to facilitate and promote social dialogue, broaden public discourse and help people see their commonalities and their differences. This requires an understanding of the interrelationships between decision-making processes and political dynamics, in particular the dynamics of conflict and cooperation in specific social contexts. As such, it replaces neoclassical understandings of profit-maximizing firms comprised of rational economic men with those of polyvocal organizations made up of political, economic persons (Sderbaum, 2001; see also Faber et al. (2002) distinguishing between homo conomicus and homo politicus). This paper takes as its starting point debates surrounding conventional costbenefit analysis (CBA). The rationale for this starting point is that, as a highly aggregated, ideologically closed approach (Sderbaum, 2004a), CBA highlights many of the issues at stake in SD decision-making. FCA is also often assumed similar to CBA but, as we illustrate later in the paper, it is a distinct approach. In particular, a type of FCASustainability Assessment Models (SAMs) is introduced and used to demonstrate the characteristics and potential of this form of sustainability accounting as a more participatory and pluralist alternative to CBA.

2.

Costbenefit analysis: the issues

Costbenefit analysis has been promoted as a democracyenhancing technology. Sunstein (2002a,b), for example, argues that it forces decision makers into conversations with objective data, that it makes decision-making more transparent, prevents undue pressure from interest groups, and increases accountability. Policymakers and consultants have promoted it as a tool for clarifying and rationalizing social choices and building consensus (Corner House, 1999). However, academics and practitioners across a wide range of disciplines have provided a powerful critique of these claims (e.g. McGarity and Shapiro, 1996; Corner House, 1999; Ackerman and Heinzerling, 2002; Sinden, 2004a,b). Sinden (2004a, pp. 213214), for example, argues that CBA: flattens our most profound emotions, beliefs, and values into the dull gray of dollars and cents; it produces hopelessly indeterminate results; it clouds transparency and undermines public participation by giving controversial

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and uncertain predictions a false patina of scientific accuracy and objectivity. The critique of CBA contains valuable lessons for those interested in SD decision processes and democracy. For the purposes of this paper, we will explore those aspects of most relevance to accounting for sustainability debates. We focus here on the more conventional forms of CBA. We appreciate that there are soft versions of CBA that take on board some of these criticisms (e.g. Bangser (1982) on integrative CBA and Abramowicz (2004) on predictive CBA) and, indeed, have drawn on some of these developments in our own work on SAMs. Following an extensive survey of the CBA literature (Brown and Frame, 2005), five main groupings of concerns about CBA have been identified as of most relevance. Each is now examined in turn.

groups with different ideological orientations will draw their frontiers of monetization differently. Whereas CBA proponents position themselves within the frontier, those promoting MCDM-type alternatives work across the boundary through combinations of monetary and non-monetary indicators. Costbenefit analysis privileges the neoclassical view of humans as economic persons (Sderbaum, 2001). As such, it can be seen to confuse the preferences people have as consumers with the values they hold as citizens (Sagoff, 1998; Sinden, 2004b) and to ignore the dynamic nature of preference formation. Decisions regarding sustainability should arguably be the product of democratic deliberation, rather than the aggregation of consumer preferences. When alternatives have to be compared and prioritized this: should be on the basis of a comparison not only of monetary valuations, but also of health and ecological risks; of the likely consequences on local community economics, community spirit, or the seventh generation hence; of the probable effects on centralization of political power, democracy, powers of community oversight, or feelings of fairness; of the impacts on people's connection to the land or on restoration of damaged habitat; and so on (Corner House, 1999). Recognizing the reflexive nature of accountings and reality, critics fear narrowly economic rationalist approaches may actually contribute to environmental and social degradation and exploitation (Hines, 1991, 1992; Maunders and Burritt, 1991; Lehman, 1995, 1996, 1998; Gibson, 1996; Herbohn, 2005).

2.1.

Over-reliance on monetization

The monetization of non-economic values (e.g. placing dollar values on human life) in CBA is seen to dehumanize and devalue them; contributing to the commodification of everything (Bangser, 1982; McGarity and Shapiro, 1996). The fear is that monetization will lead to all activities becoming socially constructed as economic and, relatedly, that all valued things will be regarded as substitutable. For sustainability, attempts to force arguably incommensurable values into a one-dimensional monetary metric can be regarded as particularly counter-productive. Sinden (2004a, p. 198), for example, argues that such an approach lacks authenticity in terms of how human beings actually value diverse goods: We would never offer a friend a cash payment to compensate her for canceling a lunch date, because we view friendship as simply incommensurable with money. Nor would a pet owner consider the opportunity costs of not eating her pet or not selling it for laboratory experiments. Similarly, many people balk at the prospect of attaching a dollar figure to the loss of an endangered species, the destruction of a pristine natural area, or the loss of a human life because they view these values as simply incommensurable with market commodities and thus not measurable along a monetary metric. However, within certain constraints (where the boundary is often hard to define) monetization and viewing the world through a monetized lens does happen and can be highly relevant. The concern is perhaps more focused on the range of values monetized and the way in which monetization takes place (e.g. lack of acknowledgement of subjectivity, contestability, lack of stakeholder input, value conflicts). All of these are concerns of post-normal science (Funtowicz and Ravetz, 1993; Mayumi and Giampietro, 2006). Of equal concern is the extent to which choices are solely determined by market values. Using the monetization frontier concept, O'Connor (2000) identifies two dimensions of these debates: one of which concerns matters of systems complexity and scientific uncertainty, the other the kinds of values involved (e.g. whether economic optimization is the aim). Individuals and

2.2.

Subjectivity of calculations

Faith in the ability to objectively describe choices and to enumerate and compare values is central to CBA (Pildes, 1991, p. 975). Attempts are made to achieve this using neoclassical economic valuation methodologies. Shadow prices are sometimes estimated by reference to market prices (e.g. imputing the value workers place on safety and health by looking at the wage premiums they receive for risky work). In other cases, monetary values are assigned using contingent valuation methods (e.g. asking survey respondents how much they would be prepared to pay for species preservation). In practice, CBA faces a raft of measurement and valuation difficulties (Adler and Posner, 2001). These include the offerasking problem (economic values depend on the allocation of property rights), the impact of wealth and income distribution on willingness to pay, information asymmetries, and scientific uncertainty. The results of contingent valuation methods are heavily dependent on who is identified as the interested population. In calculating the value of endangered species, for example, it is not self-evident whether we should count the willingness to pay of all households in a region, a country or the world (Sinden, 2004b, p. 210). Respondents might answer strategically, telling an interviewer what they think she wants to hear or inflate their answer to effect a public policy for which they will not have to pay (Heyde, 1995, p. 343). High protest rates (respondents refusing to buy or sell and qualifying their

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responses in terms of who should pay) also raise questions about the validity of these surveys (Heinzerling, 2002; Sinden, 2004a). Costbenefit analysis calculations also embody highly debatable cost and benefit estimates and judgements about appropriate discount rates. Supposedly scientific numbers rest on multiple layers of guesses and simplifying assumptions (Sinden, 2004a, p. 200). Sunstein's (2002a) case study of the regulation of arsenic levels in drinking water assesses that the benefits of regulatory action plausibly range from zero to half a billion dollars. Heinzerling (2002) suggests that such studies illustrate that CBA generates a series of numbers that are almost comically meaningless if one really understands them (p. 2313) and make a mockery of the portrayal of CBA as an objective method of decision-making. The huge uncertainties in the monetization exercise result in incorrigibly indeterminate results and open the way for opportunistic interpretations. In this sense, CBA also fails on its promise to deliver a non-political decision-making tool.

contestable nature of the calculations (O'Leary, 1985). As such, CBA is vulnerable to being used as a form of mystification if the process is captured by powerful interests. Of course, this is also the case with transparently subjective assessments, but the political dangers are viewed as being more substantive in CBA because the expectations are that there is more objectivity.

2.4.

Distributional issues

2.3.

Politics of CBA

Costbenefit analysis, in accordance with its positivist underpinnings, tries to escape politics by ignoring or denying its own value-laden nature. It elevates one particular value economic efficiencyabove all others (McGarity and Shapiro, 1996). Political judgements also inhere in CBA in terms of the choices of what and whose costs and benefits to count and how to quantify them, as they do in any accounting. Sinden (2004b, p. 194) argues that this pretence of objectivity and scientific accuracy provide a serious threat to democratic values: It is this false promisethe allure of numbers and scientific calculationthat renders CBA so vulnerable to manipulation and so destructive to democratic decision-making And it is this false promise that therefore moves CBA beyond the realm of the merely ineffectual to the dangerously misleading. Numbers, because they appear scientific and apolitical, wield substantial power and authority in Western societies and institutions (both separately, but crucially in combination). They can provide a way of masking value choices and the political nature of actions and thereby avoiding democratic processes (Corner House, 1999). They also exacerbate power imbalances by rendering the decision-making process particularly vulnerable to manipulation by powerful monied interests and inaccessible to lay audiences (Sinden 2004b, p. 228). Inconvenient costs may be ignored, miscalculated, and intentionally minimized (Corner House, 1999). Decisionmakers have the ability to filter the information stakeholders receive and to take opportunistic advantage of the multiple layers of uncertainty in CBA calculations.3 This is exacerbated by the general lack of public awareness concerning the

Costbenefit analysis focuses on monetary totals; ignoring how costs and benefits are distributed among different groups.4 Disregard for equity runs counter to the core of sustainability for those concerned with eco-justice as well as eco-efficiency. Here there is a concern not merely about comparing apples and oranges but situations where apples are taken away from one group of people to provide oranges to another group (Corner House, 1999; see also Mustafa (1994) on how CBA obscures the conflicts of multiple interests). Many costs in a sustainability context involve benefits to others (including future generations, less developed nations, other species). Averaging costs (e.g. health and safety, displacement of local communities) also ignores harm to vulnerable groups. For example, CBA tends not to: demonstrate what the consequences of a project are on the displaced [including] landlessness, joblessness, homelessness, marginalization, mortality, loss of access to resources, and social disarticulation (Corner House, 1999). Any social consensus supposedly embodied in market values is open to debate, with prices increasingly being questioned (e.g. debates over fair trade). Contingent valuation methodology also arguably discriminates against the less well-off, whose responses are typically framed in terms of their (in)ability to pay (Abramowicz, 2002). This is often compounded by problems of information asymmetry. Discount rates also have distributional effects (e.g. even very low discount rates attach only a very small weighting to the welfare of future generations). Costbenefit analysis may thus result in more privileged groups imposing costs on the countries, communities, and individuals with the least resources (Ackerman and Heinzerling 2002, p. 1575). Corner House (1999) cites examples of the use of CBA to propose that the World Bank encourage polluting industries to migrate to less-developed countries, on the basis that the economic logic behind dumping a load of toxic waste in the lowest wage country is impeccable and claims by economists that the value of a statistical life of a Chinese citizen was worth only 1/15th of that of a North American; illustrations of the poor sell cheap principle (Martinez-Alier, 1995). Any notion that CBA's efficiency judge-

3 Ways in which information and CBA have been used as tools of power have been discussed in many areas, such as occupational health and safety (e.g., Abel, 1985, 1990; Carle, 1988; McGarity and Shapiro, 1996; Frick, 1999).

4 Some attempts have been made to incorporate distributional concerns, e.g. by factoring in a preference for fairness or applying distributional weightings (Harberger, 1984; Adler and Posner, 2001). However, neoclassical economists typically consider distribution to be an inherently subjective matter outside their realm.

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ments are apolitical is rejected. As Kennedy (1981, p. 420) bluntly puts it: the notion of a tradeoff between the hard datum of efficiency and the inherently subjective, political datum of equity is apologetic nonsense. Labelling costs and benefits as internal or external, and the assignment of numbers to them, is not a neutral economic activity but an inherently value-laden process tied closely to socio-political, cultural and ideological frames of reference.

dence to test calculations independently, lay people may simply accept results on faith (Sinden, 2004b, p. 219). Costbenefit analysis does not, on this basis, possess the qualities or the complexities required for an effective mechanism to either enable appropriate accounting for SD or to facilitate meaningful dialogue about what such a concept may imply. A requirement appears, then, for methods that include a more declared socio-political component.

2.6.

Accounting as an alternative

2.5.

Reliance on experts

The final criticism of CBA arises from it being an expert-driven process, which is largely inaccessible to non-specialist audiences. Ackerman and Heinzerling (2002, pp. 15771578) observe that it takes: a great deal of time and effort to attempt to unpack even the simplest cost benefit analysis. Few community groupshave access to the kind of scientific and technical expertise that would allow them to evaluate whether, intentionally or unintentionally, the authors of a cost benefit analysis have unfairly slighted the interests of the community or some of its members. Few members of the public can participate meaningfully in the debates about the use of particular regression analyses or discount rates which are central to the costbenefit method. Costbenefit analysis results are typically presented in a technical language that seems beyond question or oversimplified to a few summary statistics unadorned by explanations or caveats (Sinden 2004a, p. 211). Either way, they convey a false impression of scientific objectivity and divert attention away from underlying values and assumptions in a way that is disenabling for citizen participation: By shifting the decision-making process from a debate about values, in which everyone feels qualified to participate, to a scientific calculus, which only certain highly trained experts can authoritatively critique, costbenefit analysis takes control away from the citizenry and places it in the hands of an elite corps of expert economists (and those who can afford to hire them) (Sinden 2004a, p. 208). The scientific uncertainty and socio-political judgements involved in risk assessment and other aspects of CBA arguably reduce the advantage experts have over lay people. Just as non-specialists are susceptible to cognitive errors when acting as intuitive toxicologists (Sunstein, 2002a), experts may fail to recognize the complexity of the risk decisions people make in their everyday lives (see Anderson (1988, p. 60) for a compelling example contrasting the self-understanding of workers with the images presupposed by CBA). Expert forums may nominally be open to public participation, but the reality is often otherwise (Gillette and Krier, 1990). For those not technically trained, CBA calculations may seem intimidating and daunting. Lacking the skills or self-confi-

While CBA is an often-used tool in policy settings where difficult decisions require consideration of multiple impacts on multiple parties, as is evident from the above review, it has attracted considerable criticism. These criticisms focus on the technique itself as well as the perceived impacts of the application of CBA. The criticisms, however, also beg the question of what approaches would be better in conceptualization and effect. It is to this latter question that the paper now turns by examining accounting technologies that seek to inform similar decisions to those addressed by CBA.

3. Social and environmental accounting technologies

3.1. FCA practices

There is widespread recognition within the accounting discipline of the need for accountings that facilitate more participatory forms of decision-making and accountability (e.g. O'Leary, 1985; Morgan, 1988; Boyce, 2000). Much of this relates to dissatisfaction with technocratic decision-making tools, similar to the concerns surrounding the use of CBA as outlined in Section 2. This is particularly evident in the sustainability accounting literature (for a recent review, see Lamberton, 2005). Over the years, various tools and techniques have been developed in response to calls for broader approaches in accounting. Cooper (1992, p. 31) notes the early experiments with multi-column reporting, triple-entry-bookkeeping and an increased emphasis on narrative disclosures. More recently, there has been renewed interest in developing social indicators and various experiments in full cost, triple bottom line and sustainability accounting (see, e.g., US EPA, 1996; CICA, 1997; CWRT, 1999; Atkinson, 2000; Birkin, 2000; Howes, 2000; Bebbington and Gray, 2001; Bebbington et al., 2001; Chambers and Lewis, 2001; Antheaume, 2004; Baxter et al., 2004; Bent, 2005; Birkin et al., 2005; Herbohn, 2005). These approaches are organizational or project-level assessments that correspond to aspects of CBA as they seek to identify and value the outcomes of decisions in economic, environmental and (sometimes) social terms. The information generated is used by organizations to understand their impacts and support decision-making processes and to provide information to stakeholders for accountability purposes. These approaches (all of which are largely experimental) follow a standard approach (summarized in Bebbington et al., 2001) which usually entails the following stages: Definition of the entity for which the account is to be developed: this has ranged from projects to organizations. In

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the latter case, there is the challenge of producing an account of an activity that is geographically dispersed (e.g. organizations operate in several countries and ecosystems). Determination of boundaries of analysis: impacts considered relevant to the account are specified. In many instances, both direct and indirect aspects have been included in the various analyses but (due to modelling limitations) not all aspects have been incorporated in the accounting. In addition, given that these experiments have often been developed in actual organizations and with small (or non-existent) research monies there have been practical limitations on how much information can be modelled and generated. Quantification of physical flows associated with aspects of interest: these may include number of people employed, emissions from product manufacture and use, resource use and amount of product/service generated. Translation of information into monetary terms: in some instances, this is straightforward (e.g. measuring a project's financial turnover). In others, monetization is achieved by the use of, for example, damage cost assessments. Approaches to FCA use some variant of this four stage approach though some (e.g. Chambers and Lewis, 2001) stop short of monetization. Others draw a relatively narrow boundary and include only some impacts (e.g., CICA, 1997; CWRT, 1999). Some focus solely on environmental aspects (e.g. US EPA, 1996; Howes, 2000; Herbohn, 2005), while others include social aspects (e.g. Baxter et al., 2004; Bent, 2005). As in ecological economics, there have been calls for dialogically oriented approaches. Thomson and Bebbington (2005), for example, call for a social and environmental accounting that takes stakeholder engagement seriously, that provides multilayered and multi-faceted accounts and explicitly addresses power differentials. They call for the replacement of mono-

Fig. 1 Components of SAM signature (from Baxter et al., 2004). logic forms of accounting with a polyvocal citizenship perspective (Gray et al., 1997). This requires accountings that can encapsulate multiple understandings: explicit recognition of competing versions of realities and interests would emerge. This would seem, to us, to be more valuable than creating a [social and environmental reporting] which assumes that there is always a commonality of interests in a single outcome (Thomson and Bebbington, 2005, p. 520). In the rest of this section, we concentrate on experiments in the United Kingdom and New Zealand with SAMs and explore how this approach to modelling, measuring and communicating tries to avoid the pitfalls of CBA.

3.2.

SAMs in the UK and New Zealand

Table 1 Elements of SAM as used in the United Kingdom (from Baxter et al., 2003) Resource capitals
Economic impact

Elements used in project

Money to contractors Social investment Reinvestment Dividends Taxes Emissions to atmosphere and sea ($/tonne) Nuisance value (noise, odour, value etc.) Footprint ($/unit area) Waste (disposal and from production) Oil and gas Water Energy Raw materials Intellectual property Physical infrastructure Jobs Health and safetybenefit arising from taxation Tackling poverty and social exclusion Equip people with skills to fulfil their potential Reduce the proportion of unfit housing stock Reduce both crime and fear of crime Social impact of products

Environmental impact

Resource impact

Social impact

In the UK, sustainability assessment modelling (SAM) was designed by BP (UK), in conjunction with the University of Aberdeen and Genesis Oil and Gas Consultants, as an FCA approach to make previously external costs more central to organizational decision-making. SAMs have subsequently been applied in other situations including energy generation from landfill, forestry, housing and aquaculture (Baxter et al., 2002, 2003, 2004; Bebbington and MacGregor, 2005). Case studies of SAMs have also been developed in New Zealand and include a resource centre, organic waste composting, community gardens, and social housing stock (Bebbington and Frame, 2003; Cavanagh, 2005; Cavanagh et al., 2006). In both cases, SAM follows four generic FCA steps; this results in a project-specific SAM profile or signature (Fig. 1) which indicates changes in economic, environmental and social capital categories resulting from the project (Table 1). The transformative process of a project is therefore described which, in the case shown, results in financial and social benefits obtained at the expense of environmental and resource usage.5 Data are drawn from specific project activities (e.g. hours worked, barrels of oil produced, volumes of water used, waste produced, and financial performance estimates). This
5

For further background and detail on the selection of the various elements and how they were monetized for application in the UK, see Bebbington (2007). In the present paper we seek to highlight the participatory and pluralist approach of SAMs including dialogue, disaggregation, contestability, etc.

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information is used either directly in the model or indirectly to impute the economic, resource use, environmental or social impacts. The main categories are: Financial flows: the economic benefits that accrue from the project to the economic entity and its stakeholders (e.g. shareholders, employees, suppliers, Government). Resource usages: this category is designed to capture the values of resources used to the extent that payments made (and captured under economic flows) do not fully account for their use (Ekins, 2001). Estimates based on economic rent calculations are possible (e.g. net price approach, present value, or user cost methods) but remain an area of contention between neoclassical and ecological economics perspectives (Ekins et al., 2003). Environmental impacts: these arise primarily from environmental damage incurred through economic activities and are categorized as: damage cost estimates from emissions; depreciation of properties arising from noise, odour and visual nuisance; land area unavailable for use due to project; and damage costs that arise from wastes created. Social impacts: this captures both positive and negative aspects of: indirect employment associated with a project, offset by deaths and accidents arising during employment above the entity paid costs; contributions to creating a socially sustainable society; and perceived benefits of products or other outputs of the project. To determine the contribution to a socially sustainable society, the UK SAM drew on the UK Government's strategy on SD (DETR, 1999; superseded by DEFRA, 2005). Headline indicators were examined and all those that had an explicit social orientation and which were not captured in any other part of the SAM were identified (e.g. poverty and social exclusion, skills training, housing, crime). Social impact is often highly dependent on the products, and for petroleum was taken as mobility, heating, and petrochemical-based products with values derived for mobility and the principles applied to all products. Mobility costs are reflected in terms of resource use and pollution impact from combusting oil and gas and its economic value assessed by reference to the price of crude. The value that society places on mobility in excess of crude price must be captured including adverse consequences. Social impacts therefore combine positive factors relating to the value assigned to mobility countered by a monetized impact of congestion and road accidents. These social elements involve the least certain methods for estimating cost and benefit, yet it is these social issues that dominate many public policy discussions on sustainability. Sustainability assessment modelling offers a way of understanding project impacts. It appears to capture tacit knowledge relating to SD profiles though this knowledge has rarely been made explicit. We have found it to be a useful tool for assisting organizations and stakeholders to reflect upon SD

performance. While SAM separates the modelling of SD impacts and an evaluation of a project's contribution to sustainability, these two elements are not entirely separable. Decisions about what elements to account for require contestable assumptions about what SD involves. The separation is to the fore in terms of the extent to which the capital sub-categories can be combined. The SAM signature is presented in a stand-alone format. The choice of the extent to combine depends on beliefs concerning the substitutability of capitals (e.g. natural capital against social capital). There is a spectrum of views on this, with proponents of weak sustainability advocating a far higher level of substitutability than proponents of strong forms. It is usually assumed that critical capital cannot be substituted. However, the issue of what critical capital is remains highly contested (for recent reviews see Chiesura and de Groot, 2003; Ekins et al., 2003). SD debates also involve complex arguments around inter- and intra-generational equity. High levels of aggregation within capital categories can obscure the distribution of cost and benefits across different social groups, geographical locations and generations. This highlights arguments about the importance of ideological orientation and starting assumptions in SD assessments. In the development within BP, a decision was made to permit substitution between elements within a capital subcategory (as long as no elements were identified as critical natural capital) but not to allow substitution between capital sub-categories. A project could be declared sustainable if every sub-category had a net positive impact and if there was no loss in critical capital. Under such a decision rule one could tolerate, for example, road deaths given the benefits that arise from mobility. Those with a stronger ideological orientation could argue that no negative moves in capital should be accepted. The application of substitution criteria is a value-based decision that can be undertaken after modelling flows in the signature form (but requires careful scoping to ensure all potentially relevant aspects of SD are identified). SAMs also allows individuals and groups to identify bubble items around the signature that can act as trump cards in decision-making (e.g. where a project poses risks to an endangered species or offends specific cultural values). Sustainability assessment modelling also considers possible remediation and restoration options for a sustainable project (e.g. mitigating carbon emission impacts of energy usage by planting trees). In the BP example, the signature would change in that a negative impact would be reduced. Overall the economic bar would remain the same with the split of the bar being affected by any remediation activities that involved the organization outlaying money. In New Zealand, we have sought to explicitly address the issue of competing ideological orientations. By comparing how different stakeholders explain and illustrate their perspectives, we have encouraged actors to articulate their ideological standpoints on SD (e.g. their perspectives on monetization, the use of market valuation methodologies and views on the materiality of particular dimensions of SD). We see this as crucial in facilitating dialogic learning and interaction in polyvocal environments. We also envisage groups with different ideological orientations constructing their own SAMs. Separate SAMs rather than synthesis into a

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unified account leaves stakeholders with the ability to exchange SAMs as a way of explaining and justifying different courses of action and allows them to interrogate each others ways of knowing. We see this as important to protect against monologism and to provide a challenge to eco-modernist business as usual approaches. In New Zealand, for example, unions have favoured a stronger conception of SD than business groups (Springett and Foster, 2005). Unsurprisingly, they also have a particular interest in exploring the social impacts of organizational activity (e.g. work environment, decent and safe employment, human rights, democratic participation). This leads to complex relations of conflict and cooperation with environmental groups (cf. Obach, 2004). We are also exploring the possibility of SAM being used to facilitate dialogue over bicultural issues arising from the Treaty of Waitangi, the contested agreement between European colonialist authorities and indigenous Mori (Belich, 1996, 2001). Such issues could be considered in terms of flows of cultural capital (cf. the UK model, where these were treated as iconic items outside the current set of capitals). For example, they could be incorporated in the social leg of SAM, developed as a separate leg, or appear as bubble items around the signature. In discussion with Mori groups, it has been suggested that SAM could enable different decision rules to be applied to specific situations (e.g. European/Mori epistemologies and divergent understandings of accountability). Leading on from this is the possibility of SAM contributing to cross-cultural issues by creating new visibilities (e.g. the value of idle resources), sensitization to different cultural assumptions (e.g. high value issues to Mori but not to European Pkeh), surfacing contradictions (e.g. performative contradictions between what policy elites say and do) and the articulation of power locations (e.g. by exposing cultural assumptions dominating particular decisions). As SAMs are used across an increasing range of sectors and stakeholders, more explicit incorporation of qualitative assessments and distributional impacts is also taking place. The UK SAM provides for an elements checklist and this can be expanded along the lines of Sderbaum's (2000, pp. 6266) non-monetary balance sheet. Many other possibilities exist as reviewed by Dalal-Clayton and Sadler (2004, 2005). Those being investigated include non-monetary quantifications in terms of stocks and flows models, narrative-based representations (cf. Satterfield et al., 2000) and the use of MCDM analyses as complements to the development of SAM signatures. In all this, there is recognition of the need to be transparent about uncertainties, value judgements, assumptions and calculation methods.6

to counter the problems identified in CBA. It is important to note that the development of SAMs was never intended to produce a definitive answer from on high, but rather to provide an alternative starting point for discussion and decision-making processes that could vary widely depending on organizational and stakeholder perspectives. Bebbington and Gray (2001) suggest that the process of working with organizations and stakeholders to provide accounts of sustainability may prove more useful than the accounts themselves. In this sense, SAMs are seen as a mechanism to explore the possibilities and challenges of sustainability, that is, they possess dialogic and transformative potential (Heiskanen, 2000; see Bebbington et al. (2005) and Thomson and Bebbington (2005) for an exploration of dialogics in accounting).7

4.1.

Monetization

4.

An evaluation of the potential of SAMs

This section reflects on SAMs utilizing the analytical framework developed earlier for critiquing CBA and outlines efforts
6 See, e.g., the NUSAP system for multi-dimensional uncertainty assessment (van der Sluijs et al., 2005) which assesses not only the more conventional aspects of scientific uncertainty but also social dimensions, such as controversy, problem framing, valueladen assumptions and stakeholder views.

Sustainability assessment modelling retains a qualified commitment to monetization. It is considered that if economic rationalism still dominates management decision-making and public policymaking then an alternative information-set built around monetization is a way to ensure consideration of [sustainability] issues (Herbohn, 2005, p. 529). It provides a means to fight on the terrain of hard financial calculationa language that reflects existing power structures that managers understand. While there are advantages in engaging in a way that resonates with people's established beliefs (Bruce, 1983), it is arguably also important to do so in a way that problematizes (e.g. by providing counter-perspectives) and to recognize the multiplicity of rationalities and discourses in modern democratic societies (Sderbaum, in press). This is more complex than just monetization versus non-monetization and should include competing perspectives on both what and how to monetize. Unlike CBA, there is no attempt to press impacts together into a single number in a search for an optimal solution meaningful for all members of society (Corner House, 1999). Many individuals will prefer a more balanced position on the quantitative/qualitative continuum (particularly those who reject a business as usual approach). SAMs provide space for combining monetary and non-monetary indicators, depending on ideological orientation. Some groups, for example, are likely to identify more bubble items than others. Where individuals and groups are highly resistant to monetization (Maunders and Burritt, 1991; Herbohn, 2005) then using SAMs will be contentious and more valuable as a way of eliciting discussion on why monetization is not appropriate or does not feel right (cf. Clark et al., 2000). Our experience is that SAM provides a potential for dialogue between stakeholders with different ideological orientations. Often such debates become alienating because each cannot easily see the viewpoint of the other. SAM can surface topics of contestability and provide a point of connection between various parties because environmental, social and economic concerns can, potentially, be articulated and accepted as part of the same
7 It is important to note that alternative methodologies to create SAMs will arise in future applications. Given the participatory nature of the tool, considerable variation is expected and this is seen as a strength.

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evaluation. It helps participants identify their commonalities and confront their differences. Where differences are considerable, it highlights the limits of a politics of consensus. In summary, to seek to remedy the problem by adding more of the very thing (economic calculative rationality) that created the problem may appear to be misguided. On the other hand, it is also monologic to insist that economic discourse cannot be used in decision-making and ignores the lived reality of decision makers (and those impacted by those decisions) who are operating in this world, not in an imagined, non-existent one. It also ignores the possibilities for challenging the figures and constructing different kinds of figures or quantitativequalitative mixes. This is supported by other approaches, such as MCDM and positional analysis (Sderbaum, 1982, 2004a), which seek to include monetary and nonmonetary analysis in an ideologically open manner and to include multiple viewpoints and interpretations.

around uncertainty and value-loading as well as promoting democratic participation in SD issues. While working with SAM, we have observed tensions between those adopting a distinct positivist/reductionist perspective and those more comfortable with a clear social constructionist modus operandi. The former prefer a far greater degree of precision than is possible while the latter celebrate that a conversation about sustainability is taking place (but are also mindful of the way power relations may structure that dialogue). In our view, the value of SAMs is only fully realized by embracing a social constructionist model which requires working with organizations and stakeholders in a polyvocal way.

4.3.

Politics of SAMs

4.2.

Subjectivity of calculations

The lack of recognition of subjectivity is a major criticism of CBA. This is much less of an issue in SAM where subjectivity is explicitly acknowledged. SAM draws from a branch of accounting (social and environmental accounting) which is largely social constructionist in perspective (O'Dwyer, 2005 refers to this as critical social accounting; see also Gray, 1992, 2002). SAM creates a picture of impacts (via the signature) which is a mixture of the hard factual and inherently contestable (O'Leary, 1985). Within a particular ideological perspective, issues might be seen as inter-subjectively objective (e.g. in the sense that definitions and decision criteria can be generally agreed). But beyond this, claims to objectivity become strained. The significant scientific uncertainties surrounding SD and subjectivities inherent in calculations also preclude clear-cut answers. Given the aim of SAM is to provide a relatively approximate glimpse into a project's sustainability profile, then it cannot be presented as an objective description of the truth. In verbal presentations, SAM analysts are expected to address epistemic and ethical uncertainties and make judgements and assumptions transparent. These can also be documented in something akin to a statement of accounting policies. This helps to highlight that number assignment always involves value and reality assumptions (Churchman, 1971, p. 31) and to prevent findings acquiring an aura of reality they do not deserve. There is, however, the problem that the subjective assessment of a project's sustainability signature may be viewed as objective and thus become objectified (Hines, 1991). This is a behavioural effect of SAM and an obvious risk in its use. Our experience in working with SAM is that people forget its subjectivity (particularly where diverse perspectives are not represented). Indeed in cultures socialized towards objectivity, it is not clear that many users accept subjectivity or that they want it. Policymakers and others trained in technocratic paradigms often still expect definitive answers. This is a common issue for all methodologies promoting more ideologically open models (Sderbaum 1999, 2004b, in press). Such approaches require linkages with political processes such as those addressed in post-normal science and positional analysis, which focus on transparency

The political dimension of decision-making processes is explicitly recognized within SAMs (cf. CBA where politics is typically ignored or denied). It attempts to take pluralism seriously by recognizing competing ideological perspectives and the significant power plays at work between the advocates of different ideological orientations (Gale, 1998; Sderbaum, in press). SAMs do not restrict stakeholders to a predefined approach to SD but enable perspective to arise from the dynamics of the decision-making process and self-imposed decision rules. SAMs seek to bring the politics surrounding sustainability into the open so that various actors can debate their perspectives (e.g. weak versus strong forms of SD). Participants are able to progress their own accounts and definitions of SD in a Freirian transformative rather than banking manner (Thomson and Bebbington, 2004). However, this gives rise to a major implementation issue, namely the extent to which organizations and stakeholders are willing to devote time and energy into processes that require more than cursory forms of participation (cf. Jones, 1997; Owen et al., 2001). This is exacerbated by a focus on shortterm interests and a lack of incentives to pursue sustainability within management structures. Another observed obstacle has been a reluctance to be open about values and the inherently political nature of undertaking SAMs. Indeed the politics of sustainability is seen by some as inhibiting their involvement. In a society socialized towards homo conomicus (Faber et al., 2002), individuals and groups may be loath to identify themselves as political beings.8 The process is also significantly affected by the power dynamics in stakeholder relationships. Consistent with experiences in other disciplines (Abel, 1985; Livesey, 2001), we have encountered concerns that information on sustainability impacts might cause trouble for managers and lead to increased stakeholder demands. By contrast, stakeholders feeling at a power disadvantage have expressed expectations and fears that SAMs will merely be used as window dressing to legitimize predetermined answers. Resistance to multiplicity and dialogic accountability is likely to come from those seeking to determine right answers and impose them on others. SAMs as a form of positional
8 Research (e.g. Herbohn, 2005; Springett and Foster, 2005) and our own experience suggest that groups such as conservationists, NGOs and unions can be more transparent about their values and politics than managerial groups.

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analysis require a willingness to engage in openly normative analyses and for actors to be transparent about their situatedness. Decision processes may also be limited by focusing on only a few very similar alternatives (Sderbaum, 2004a,b) or careful screening of stakeholders. If engagement is not sufficiently plural, there is the danger that SAMs will be dominated by a relatively narrow range of interests and perspectives. A focus on communities and local values can also open the way for oppression of minorities (Corner House, 1999). Such difficulties can be counteracted by involving interested parties at early stages of the decision-modelling process and developing procedural rules to establish a more even playing field (Jones, 1997; Owen et al., 2001). Oppositional analysis is a means to introduce new facts or deconstruct the analyses of others (Linder, 1994). SAM analysts can also help to identify different interests related to an issue (e.g. by drawing attention to viewpoints not represented at the table). Dialogic entitlementse.g. legislative rights to information and participationalso help to institutionalise opportunities for democratic engagement.

4.5.

Reliance on experts

4.4.

Distributional issues

Sustainable assessment models seek to address issues of distribution by developing the signature form (e.g. Fig. 1). This expresses impacts on, and gains/losses in, each category of capital, and is far more explicit than CBA. For example, in welfare economics form, CBA aims at identifying alternatives that are optimal from a societal point of view. In doing so, it focuses on the total wealth/utility and not on its distribution. CBA can also be applied at an organizational level focusing solely on costs and benefits from the point of view of the organization whereas SAM, combined with stakeholder analysis, is less likely to ignore distributional issues as these are embedded within the participatory process. By taking all capitals into account it helps to highlight the extent to which social capital is bound into the overall construction of sustainability. It allows a clearer understanding of a project's impact on employment, social welfare, recreation values, ecosystem services and community wellbeing to emerge. The presentational format of the SAM signaturewhich preserves a multi-dimensional view of impactshelps people recognize that one group's benefit can be another's cost. Further disaggregation of the distributional impacts on particular groups and individuals (e.g. health and safety risks) or on non-human species is also possible. Substitutability within and between various impact/capital categories is openly recognized as a political issue. The choice of a discount rate also makes distributional issues explicit. SAM currently uses a discount rate of zero in an attempt to deal with intergenerational equity and intertemporal choices. This is a way of avoiding giving too little weight to future costs and benefits (see also Frank (2000) on hyperbolic discounting). However, not using a discount rate or using very low rates raises different issues (see Winkler (2006) for a recent review). Views regarding the use of discount rates are highly value laden. Again, transparency is important to allow comparisons to be made between the results of different approaches and sensitivity analysis to be applied.

This is less than for traditional CBA as the SAM design explicitly involves all significant stakeholders in a project team in developing a project's sustainability profile. Decision makers, stakeholders and technical advisers are viewed as working together as co-investigators. This is important to ensure that SAMs incorporate a diversity of perspectives. While there is a need to draw on expert developed metrics (e.g. damage costs, resource rents, accident statistics) SAM, in order to engage participants, attempts to be comprehensible to non-specialist audiences. It also facilitates debate among stakeholders by recognizing a plurality of expert knowledge and applies extended-peer-community quality assurance processes similar to those in post-normal science (Haag and Kaupenjohann, 2001). Experts are expected to exhibit selfawareness of the values and assumptions underpinning their models. Intellectual pluralismusing analysts that can dialogue across a range of ideological perspectivessafeguards against excessively partial analysis (Sderbaum, 2004b). Information is provided in multi-layered waysin a form that is accessible to non-specialists and in a technical form necessary for independent validation. Report recipients are not expected to treat valuation processes as black boxes. The SAM signature has been found to be an effective way to present information (e.g. of decision alternatives) in an accessible way so as to promote dialogic interaction. This runs counter to methods such as CBA. Sderbaum (2004a, in press) observes that CBA analysts are typically experts in a very traditional sense and not part of an interactive learning process. Based on neoclassical assumptions, they imply they know correct prices, rules of valuation and resource allocation. They do little to encourage debate and tend to treat participation in a perfunctory manner or suggest that it is unnecessary. CBA does not consider the interests of different stakeholders with respect to a specific decision or their different perspectives on SD issues (e.g. viewpoints on fair trade). Individuals are treated as consumers expressing their willingness to pay (sometimes willingness to accept) for commodities traded in actual or hypothetical markets. People who refuse to sell or to express themselves in money terms (e.g. on deontological grounds) are treated as protest votes. Actors and decision makers who share CBA ideology (e.g. its privileging of economic efficiency) benefit from its application while others suffer (Sderbaum 2004a, p. 48).

5.

Conclusions

Critiques of CBA apply to FCA experiments and to SAMs in particular, at least to the extent that they apply to all calculative technologies that attempt to describe the world in monetary terms. However, in each of the problem areas, SAM moves some way to attempting to mitigate the impacts of the limitations of such techniques. The scale of analysis being undertaken appears highly relevant here. There is wider acceptance that the complexity of SDboth in terms of scientific uncertainty and ideological diversityrequires a multi-dimensional approach (e.g. a plurality of decision

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criteria). Furthermore, with SAM's origins as a social and environmental accounting technology, it is more readily recognized as being polyvocal and the issue of subjectivity/ objectivity becomes less of an issue, as SAMs are part of a plural interaction. As such, they are much less prone to perceptions as an objective, neutral and complete tool. The perceived nonpositivist weakness of social and environmental accounting (as illustrated by scepticism in traditional accounting and neoclassical economic circles) creates strength in SAM through its explicit social constructionist epistemology. Accounting, like other social science disciplines, forms part of a web of socio political structures that are constitutive and reconstitutiveof our community (Pildes, 1991, p. 937). As such, it participates in complex and subtle ways in the creation of social understandings and the formation and transformation of selves, communities, practices, and institutions (Savage, 1996, pp. 342343). It may be that SAM, unlike CBA, can encourage individuals and groups to critically reflect on the (un)sustainability of organizational practices and provide a mechanism to create site-specific insights into sustainability. In so doing, it should help social actors recognize the socially constructed nature of their understandings and expose the hidden commitments (values and assumptions) of traditional decision-making models. If so it will support more broadbased rational decision-making in a meansends sense within a particular value perspective and hermeneutically across different value perspectives (cf. O'Connor, 1999; Sderbaum, in press). By facilitating stakeholder dialogue, it should be possible, for example, to provide new measures of organizational performance and require decision makers to be more transparent about their supporting rationales for decisions. In this way it will guard against the imposition of a new hidden curriculum (Thomson and Bebbington, 2005) and help to make decision-making more open and transparent. It also specifically encourages accountants and financial planners, an essential but often-neglected set of players, into SD debates. SAMs are but one example of the adoption and adaptation of accounting technologies to pursue wider sustainability objectives. Other examples will arise as institutions grapple with the increasingly complex and uncertain nature of decision-making processes around long-term, resource-constrained issues. We join the growing number of commentators that argue that this can most valuably be addressed through the development of more dialogic rather than highly technocratic models and processes. In this, we are particularly conscious of the importance of pursuing transdisciplinary approaches and strategies that help such accountings to flourish.

this paper. The errors, of course, remain ours. An earlier version of some text appeared as part of a longer paper by Brown and Frame (2005).

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