Abstract/Summary

Why do accounting researchers assume that financial institutions and investors care about accounting disclosures, voluntary or mandatory? Why do they assume that employees of financial institutions will choose to act as quasi-enforcers of regulators or standard setters? And who are these homogenous financial institutions and investors, and their model employees? A common argument is that changing sustainability disclosure standards are driven by demands from the mythical investor [Young, J. 2006. Making up users. Accounting, Organizations and Society 31, no. 6: 579–600] or more vaguely by the ‘capital markets’. These ambiguous, powerful but underspecified accounting users appear to be constantly searching for value-relevant disclosures, happy to enforce any disclosure changes that will enable them to make more sustainable decisions, which in turn will change the behaviour of the managers in the companies they hold power over, whilst disregarding the impact on the bottom line that building up or extending disclosures has. The power of financial institutions comes in many forms, and while they undoubtedly have this power, what is it that makes us assume they are able and incentivised to use this power to make the world a more sustainable place? And who specifically are they?