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Sense-Making and Sense-Giving: Reaching Through the Smokescreen of Sustainability Disclosure in the Stock Market
School of Economics and Management, Lund University, Lund, Sweden.
Halmstad University, School of Business, Engineering and Science, Centre for Innovation, Entrepreneurship and Learning Research (CIEL). Luleå University of Technology, Luleå, Sweden.ORCID iD: 0000-0002-3377-6177
2019 (English)In: Challenges in Managing Sustainable Business: Reporting, Taxation, Ethics and Governance / [ed] Susanne Arvidsson, Cham: Palgrave Macmillan, 2019, p. 77-109Chapter in book (Refereed)
Abstract [en]

Financial analysts’ role as information intermediaries between management teams and investors is vital for the efficient allocation of resources on the stock market. The increased focus on sustainability information in corporate reports has affected financial analysts in their important work of interpreting, assessing and communicating value-added information to their clients, i.e. the investors. The challenges they face relate to the ambiguous nature of sustainability information and its difference from traditional financial information. How do analysts reach through this smokescreen? How do analysts make sense of sustainability information, and how do they give sense to this information when they provide investment advices to their investors? In this chapter, these challenges are addressed from a cognitive-frame perspective. We argue that the first part of 2000s was characterized by cognitive dissonance due to both a low social legitimacy and a low cognitive legitimacy, i.e. sustainability was not yet requested by the investors to be attended to and it was regarded too ambiguous to be relevant for being considered in a valuation context. In the latter part of 2010s, we argue that there is only a partial cognitive dissonance. At this time, sustainability information is beginning to be socially legitimate and requested by investors. However, the complexity of the situation remains. This type of information is still not considered as cognitive legitimate due to the ambiguous nature, which renders difficulties for the sense-making and sense-giving processes. The findings have implications not the least in the ongoing quest of developing frameworks, standards and legislation (e.g. the EU directive (2014/EU/95)), that opt for improving the relevance, credibility and comparability of sustainability information. © The Authors 2019

Place, publisher, year, edition, pages
Cham: Palgrave Macmillan, 2019. p. 77-109
Keywords [en]
Sustainability information, Financial analysts, Cognitive frames, Cognitive dissonance, Sense-making, Sense-giving, Social legitimacy, Cognitive legitimacy
National Category
Information Systems
Identifiers
URN: urn:nbn:se:hh:diva-41372DOI: 10.1007/978-3-319-93266-8_4Scopus ID: 2-s2.0-85063422748Libris ID: x679pq7kvlcb01bbISBN: 978-3-319-93265-1 (print)ISBN: 978-3-319-93266-8 (electronic)OAI: oai:DiVA.org:hh-41372DiVA, id: diva2:1384976
Available from: 2020-01-13 Created: 2020-01-13 Last updated: 2020-01-13Bibliographically approved

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Johansson, Jeaneth

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