People and planet as important as profit

Businesses need to take more than the bottom line into account, says Concordia Accountancy professor Charles Cho.
May 2, 2011
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By Russ Cooper
Source: Concordia Journal

Accountancy professor Charles Cho has been at Concordia since January 2007. | Photo Concordia University
Accountancy professor Charles Cho has been at Concordia since January 2007. | Photo Concordia University

Charles Cho wants businesses to do what they say.

The professor in the John Molson School of Business’s Department of Accountancy isn’t focusing solely on numbers, audits and financial forecasts. He would like to make sure that companies are accountable for their actions, the image they project, and the information they disclose to the public.

This is part of sustainability and “corporate social responsibility” (CSR) accounting, and it’s gaining importance in a business world that is increasingly placing emphasis on transparency and principled practices.

Cho, who holds the Royal Bank of Canada Professorship in Responsible Organizations, explains that CSR accounting looks at a broader view of society that takes into consideration a wider range of stakeholders.

“And I emphasize the word stakeholders versus shareholders,” he states emphatically. “In traditional accounting, the main player would be focused on the shareholder, the firms, the businesses. In CSR accounting, we focus on members of society as a whole.”

A significant portion of his research examines the image that a given company projects and the information it discloses to the public, through various reports, its websites, etc., and compares that presentation to the company’s actions and performance to see if they match.

He has found that in many cases, there is a gap between what companies say and what they actually do.

What’s more, he has found that often the worst companies tend to disclose a higher volume of positive news to deflect attention from their negative practices, and use more optimistic and less certain language in their messaging.

“The information a company puts out isn’t always necessarily financial. It could be narratives, what they are doing for child labour policies or workforce safety, or other information relevant to certain stakeholders,” he says, adding many companies have taken to releasing stand-alone reports for any number of issues — among the most popular of which is a company’s environmental initiatives.

“With this research, we in this field are basically denouncing companies that are engaging in greenwashing activities and we are working towards making more companies more accountable to the image.” To promote sustainability accounting research here in North America, Cho is organizing the 2011 North American Congress on Social and Environmental Accounting Research (CSEAR), which will take place at Concordia’s JMSB, May 3 and 4.

The small, informal conference will welcome roughly 35 participants to discuss social and environmental accounting, teaching and research.

Held every 18 months, this is the third North American CSEAR. Cho helped organize the first, held at Concordia in July 2008. The second was held in January 2010 at the University of Central Florida - where Cho completed his PhD in business administration.

Related links:
•   The 2011 North American Congress on Social and Environmental Accounting Research
•   Charles Cho
•   John Molson School of Business, Department of Accountancy
•   RBC Professorship in Responsible Organizations
•   Centre for Social and Environmental Accounting Research
•   Corporate Social Responsibility at Industry Canada



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