Calculating the Immeasurable: A Study into the Mytho-Logical Role of Climate Scenarios for Thinking the Unthinkable

Student thesis: Phd

Abstract

In its final status report, the Taskforce on Climate-related Financial Disclosures (2023, p. v) expressed concerns about the insufficient disclosure of decision-useful climate-related financial information by companies. Addressing this gap, this study investigates the potential value of climate scenarios within interdisciplinary accounting discourse, particularly focusing on the issue of immeasurability and its implications for defining 'decision-useful' information through subjective, forward-looking climate scenarios. By integrating climate scenarios into corporate strategic planning, organisations are expected to be better positioned to cope with complex 21st-century issues, such as climate change, which challenge traditional calculative methods. The need for climate scenarios reveals the limitations of industrial-era financial imagination, which relies heavily on quantifiable metrics and standardised practices suited to the 20th-century economic landscape. Based on semi-structured interviews with 44 individuals across 16 FTSE350 organisations in the UK and an analysis of corporate disclosures before and after the adoption of the TCFD recommendations, this research prospectively theorises the need to radically reconceptualise core accounting principles, such as materiality, to remain relevant in a neo-calculative context. Despite the TCFD's well-intentioned recommendations, the study reveals the ambiguity inherent in the concept of 'decision-useful' information when dealing with immeasurable phenomena and the complexity and interdisciplinary effort required to integrate climate scenarios into corporate strategic planning. The UK's adoption of the TCFD framework provides an instructive empirical setting. This study illustrates how climate scenarios can be reduced to reference-based stress tests, similar to those utilised by accountants for decades, or can function as creative and speculative truths, sparking a re-evaluation of organisational identities and their potentiality within broader ecological systems. The study illustrates the potential imbued in climate scenarios, as those engaged in them are forced to question singular truths about what constitutes an objective and complete representation of the future. The findings highlight a need to reimagine accounting, underscoring the potential of climate scenarios for supporting organisations in responding to the incalculable aspects of phenomena like climate change. The study argues that transcending traditional paradigms and integrating forward-thinking, narrative-based approaches have significant implications for accounting principles and standards. This shift in accounting practice is not a mere theoretical novelty but a pressing necessity, fostering a more dynamic and theoretically integrated approach to contemporary environmental challenges. Thus, future corporate reporting based on existing assumptions will likely prove insufficient in the face of uncertainties that defy calculability.
Date of Award1 Aug 2024
Original languageEnglish
Awarding Institution
  • The University of Manchester
SupervisorPaolo Quattrone (Supervisor)

Keywords

  • Accounting
  • Corporate Reporting
  • Taskforce on Climate-related Financial Disclosure
  • Climate Change
  • Calculability
  • Strategic Planning

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