CSR and Sustainability in The Public Sector 1st Ed 9789811563652 9789811563669 Compress

Approaches to Global Sustainability, Markets, and Governance
Series Editors: David Crowther · Shahla Seifi
David Crowther
Shahla Seifi Editors
CSR and
Sustainability
in the Public
Sector
Approaches to Global Sustainability, Markets,
and Governance
Series Editors
David Crowther, Faculty of Business and Law, De Montfort University,
Leicester, UK
Shahla Seifi, University of Derby, Derby, UK
Approaches to Global Sustainability, Markets, and Governance takes a fresh and
global approach to issues of corporate social responsibility, regulation, governance,
and sustainability. It encompasses such issues as: environmental sustainability and
managing the resources of the world; geopolitics and sustainability; global markets
and their regulation; governance and the role of supranational bodies; sustainable
production and resource acquisition; society and sustainability.
Although primarily a business and management series, it is interdisciplinary and
includes contributions from the social sciences, technology, engineering, politics,
philosophy, and other disciplines. It focuses on the issues at a meta-level, and
investigates the ideas, organisation, and infrastructure required to address them.
The series is grounded in the belief that any global consideration of sustainability
must include such issues as governance, regulation, geopolitics, the environment,
and economic activity in combination to recognise the issues and develop solutions
for the planet. At present such global meta-analysis is rare as current research
assumes that the identification of local best practice will lead to solutions, and
individual disciplines act in isolation rather than being combined to identify truly
global issues and solutions.
More information about this series at http://www.springer.com/series/15778

David Crowther Shahla Seifi
•
Editors
CSR and Sustainability

in the Public Sector
123
Editors
David Crowther Shahla Seifi
Faculty of Business and Law University of Derby
De Montford University Derby, UK
Leicester, UK
ISSN 2520-8772 ISSN 2520-8780 (electronic)

Approaches to Global Sustainability, Markets, and Governance
ISBN 978-981-15-6365-2 ISBN 978-981-15-6366-9 (eBook)
https://doi.org/10.1007/978-981-15-6366-9
© The Editor(s) (if applicable) and The Author(s), under exclusive license to Springer Nature Singapore
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Acknowledgements
The editors would like to acknowledge the Social Responsibility Research Network
and all participants at the 18th International Conference on Corporate Social
Responsibility and 9th Organisational Governance Conference held in Barcelos,
Portugal, during September 2019.
v
Contents
1 The Developing Public Sector Perspective . . . . . . . . . . . . . . . . . . . . 1

Shahla Seifi and David Crowther
Part I Social Responsibility in the Public Sector

2 Accountability and Sustainability Reporting in the Public Sector.
Evidence from Italian Municipalities . . . . . . . . . . . . . . . . . . . . . . . . 19
Fabiana Roberto, Roberto Maglio, and Andrea Rey
3 The Portuguese Tax System for Non-profit
Institutions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Fátima David, Lúcia Marques, and Rute Abreu
4 Environmental Accounting: A Case Study of Implementation
in Brazilian Public Airports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
Iris Cristina Ferreira da Silva, Fued Abrão Junior,
and José Maria Dias Filho
5 Sustainable Development of Human and Social Capital
in a Socioeconomically Challenged Community in Brazil . . . . . . . . 77
Renuka Vivekananthan
6 The Theory of Attachment in Contexts of Public and Social
Marketing: Study of the Program “Portugal Sou Eu” . . . . . . . . . . 95
Ana Cardoso and Bruno Sousa
Part II Developing Sustainability in the Public Sector

7 Sustainability and Corporate Social Responsibility
in the Perspective of Social Economy Entities:
A Bibliometric Study . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 113
Brízida Tomé, Ana Maria Bandeira, Graça Azevedo,
and Alberto J. Costa
vii
viii Contents
8 Emerging Trends on Sustainability/Integrated Reporting:

Public and Private Perspectives . . . . . . . . . . . . . . . . . . . . . . . . . . . 137
Sónia Monteiro, Verónica Ribeiro, and Kátia Lemos
9 CSR and Nation Building Agenda in India: An Accounting
Framework for “Multiplier” Effect of Corporate Social
Responsibility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 151
Taral Pathak and Ruchi Tewari
10 Why Some Public Accounting Reforms Tend to Fail: Evidence
from Belgian Public Accounting Reform . . . . . . . . . . . . . . . . . . . . . 165
Christos Tsatsis
Part III The Role of the University

11 The Importance of Ethics and Values for the Students
in the Polytechnic of Guarda—Portugal . . . . . . . . . . . . . . . . . . . . . 187
Francisco Tomé and Ermelinda Oliveira
12 Social Responsibility at the Polytechnic Institute of Portalegre:
From the Experience Gained to the New Challenges . . . . . . . . . . . 197
Joaquim Mourato, João Alves, Francisco Morais, Isabel Mourato,
and Maria Maridalho
13 Social Responsibility: Proposal of Social Re-inclusion of Inmates
of the Brazilian Prison System Through Higher Education . . . . . . 213
Ana Lúcia Fontes de Souza Vasconcelos,
Patrícia Tuma Martins Bertolin, Bruna Angotti, and Rute Abreu
14 The Social Entrepreneurship and the Development of Human
Capital Building Social Capital: The Case of the University
of Fortaleza . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 225
Randal Martins Pompeu and Marcus Mauricius Holanda
15 The Future of the Accounting Degree . . . . . . . . . . . . . . . . . . . . . . . 239
Rute Abreu and Ermelinda Oliveira
Contributors
Rute Abreu Instituto Politécnico da Guarda/UDI-IPG/CICF-IPCA/CISeD-IPV,

Guarda, Portugal
João Alves Instituto Politécnico de Portalegre, Centro de Investigação para
Valorização dos Recursos Endógenos (VALORIZA-IPP), Portalegre, Portugal
Bruna Angotti Universidade Presbiteriana Mackenzie, São Paulo, Brazil
Graça Azevedo Research Centre on Accounting and Taxation, Higher Institute for
Accountancy and Administration of Aveiro University, Aveiro, Portugal
Ana Maria Bandeira Polytechnic Institute of Porto, Porto, Portugal
Patrícia Tuma Martins Bertolin Universidade Presbiteriana Mackenzie, São
Paulo, Brazil
Ana Cardoso Polytechnic Institute of Cavado and Ave, CiTUR and UNIAG
research member, Barcelos, Portugal
Alberto J. Costa Research Centre on Accounting and Taxation, Higher Institute
for Accountancy and Administration of Aveiro University, Aveiro, Portugal
David Crowther De Montfort University, Leicester, UK
Iris Cristina Ferreira da Silva PPGCONT, Federal University of Bahia (UFBA),
Salvador, Brazil
Fátima David Instituto Politécnico da Guarda, Guarda, Portugal
Ana Lúcia Fontes de Souza Vasconcelos Universidade Presbiteriana Mackenzie,
São Paulo, Brazil
José Maria Dias Filho PPGCONT, Federal University of Bahia (UFBA),
Salvador, Brazil
Marcus Mauricius Holanda University of Fortaleza, Fortaleza, Brazil
ix
x Contributors
Fued Abrão Junior Brazilian Airport Infrastructure Company (Infraero), Brasília,

Brazil
Kátia Lemos Polytechnic Institute of Cavado and Ave, Research Centre on
Accounting and Taxation, Barcelos, Portugal
Roberto Maglio Department of Economics, Management, Institution, University
of Naples “Federico II”, Naples, Italy
Maria Maridalho Instituto Politécnico de Portalegre, Centro de Investigação para
Lúcia Marques Instituto Politécnico da Guarda, Guarda, Portugal
Sónia Monteiro Polytechnic Institute of Cavado and Ave, Research Centre on
Francisco Morais Instituto Politécnico de Portalegre, Centro de Investigação para
Isabel Mourato Instituto Politécnico de Portalegre, Centro de Investigação para
Joaquim Mourato Instituto Politécnico de Portalegre, Centro de Investigação para
Ermelinda Oliveira Instituto Politécnico da Guarda/UDI-IPG/Citur-Guarda,
Guarda, Portugal
Taral Pathak MICA-the School of Ideas, Ahmedabad, Gujarat, India
Randal Martins Pompeu University of Fortaleza, Fortaleza, Brazil
Andrea Rey Department of Economics, Management, Institution, University of
Naples “Federico II”, Naples, Italy
Verónica Ribeiro Polytechnic Institute of Cavado and Ave, Research Centre on
Fabiana Roberto Department of Economics, Management, Institution, University
of Naples “Federico II”, Naples, Italy
Shahla Seifi University of Derby, Derby, UK
Bruno Sousa Polytechnic Institute of Cavado and Ave, CiTUR and UNIAG
research member, Barcelos, Portugal
Ruchi Tewari MICA-the School of Ideas, Ahmedabad, Gujarat, India
Brízida Tomé Polytechnic Institute of Porto, Porto, Portugal
Francisco Tomé Insituto Politécnico da Guarda, Guarda, Portugal
Contributors xi
Christos Tsatsis Centre de Comptabilité et Contrôle, Universite Libre de

Bruxelles, Brussels, Belgium
Renuka Vivekananthan University of Fortaleza, Fortaleza, Brazil
Chapter 1
The Developing Public Sector Perspective
Shahla Seifi and David Crowther
Abstract Commonly, the matter of corporate social responsibility has been applied,
as the name suggests, to corporations alone. The issues, however, apply equally to
all organisations including those of the public sector. This chapter looks at some of
the important issues in terms of Brundtland and subsequent actions and initiatives.
It also looks at the matter of sustainability to conclude that the issues are subsumed
within a concern for social responsibility. In doing so, it argues that this is all related
to good governance and therefore the chapter sets the scene for the remainder of the
book.
Keywords Sustainable development · Brundtland · Environment · Standards ·

Governance
1.1 Introduction
Although the generally accepted term is Corporate Social Responsibility, it is widely

understood that the various aspects of CSR apply equally to all organisations, whether
profit-seeking or not. Thus, CSR applies in an equal amount to the public sector. There
is a wide variety of different public sector organisations, ranging from universities to
government agencies to airports and prisons—and all are affected by the implications
of social responsibility. Unfortunately, this area of the economy has been relatively
neglected in CSR research and this book sets out to redress the balance. We start by
looking at some general concepts relating to governance and social responsibility.
According to ISO 26000, there are seven principles that organisations should abide
by as follows: accountability, transparency, ethical behaviour, respect for stakeholder
interests, respect for the rule of law, respect for international norms of behaviour,
S. Seifi
University of Derby, Derby, UK
D. Crowther (B)
De Montfort University, Leicester, UK
e-mail: davideacrowther@aol.com
© The Editor(s) (if applicable) and The Author(s), under exclusive license 1
to Springer Nature Singapore Pte Ltd. 2020
D. Crowther and S. Seifi (eds.), CSR and Sustainability in the Public Sector,
Approaches to Global Sustainability, Markets, and Governance,
https://doi.org/10.1007/978-981-15-6366-9_1
2 S. Seifi and D. Crowther
respect for human rights. Here, we can see that an enterprise is deemed to be more
responsible than before. Their responsibility extends beyond simply improving the
profitability of providing a service. But, as was pointed out during the ISO General
Assembly in 2008, the existing international standards have not yet paid enough
attention to sustainable development. This fact is obviously noticed in the field of
energy consumption. Lack of universally recognised energy-labelling standards is
a hindrance to sustainable development, as it prevents consumers from making the
most sustainable decisions.
Enhanced public awareness and concern about the environmental impact of
production systems and their products is a key point in energy management. Although
the process and product designs concerning such concepts as energy consumption,
recycling and product reuse after end-of-life are increasingly confronting legal limi-
tations, global trading still lacks enough comprehensive regulations and standards on
the above-mentioned concepts. No international standards have so far been developed
on the matter of sustainability.1 International standards only state how to measure
energy consumption. It seems that EU Directives are exemplars of good practice: so
much so that international legislative bodies follow them. Directives on eco-labelling
and energy labelling are outstanding examples. Another example of international
awareness about diverse impacts of products and production processes is witnessed
through reduced use of materials such as asbestos or legal force to use CFC-free
refrigerants.
Seemingly, the motto “polluter shall pay” is generally accepted. Accordingly,
manufacturers should assume the costs of removing the pollution they have created.
And of course, in the long run, less energy consumption equals less costs. Researchers
have assessed the costs burdened upon the shoulders of countries to remove pollutants
they have entered into their environment through inefficient production processes and
their products. A good energy practice results in less external costs.
1.2 The Brundtland Report and After
It was in 1983 when the World Commission on Environment and Development

(WCED) was held by the United Nations chaired by Gro Harlem Brundtland.
This commission is commonly known as the Brundtland Commission. The report
produced by the commission as Our Common Future also became famous as the
Brundtland Report. The main aim of this commission was to address the concern
about what it called the rapid devastation of the environment for human beings and
shrinkage of natural resources and the results of such devastation on social and
economic development. The UN General Assembly addressed the environmental
challenges as global concerns and pointed out the necessity of setting out policies
1 ISO26000 is concerned with social responsibility and therefore indirectly with sustainability. It is,
however, only advisory rather than a true standard. Actually, the definition of sustainability has not
yet been agreed upon (see Aras & Crowther, 2009) and so no standard can be forthcoming.
1 The Developing Public Sector Perspective 3
for sustainable development. It was uttered clearly in the report that economic devel-
opment should progress sustainably and with no shrinkage in natural resources or
with no deterioration of the environment. Before, such a concern for sustainability
was only expressed by some NGOs. The primary concern was on assuring equity on
a global level, and on redistribution of resources towards the nations suffering from
poverty while assisting their economic development. According to the report, it is
possible to attain equity, growth and environmental wellbeing—the Triple Bottom
Line—simultaneously and that, for every country, there is the feasibility of acquiring
complete economic prosperity and enhancement of their resource base. It was also
mentioned that such equity and growth is achievable by social and technological
advancements. In 1987, Oxford University Press published the Brundtland Commis-
sion report, Our Common Future. The definition used in this report for sustainable
development is still used validly:
Sustainable Development is the development that meets the requirements of the present
generations without compromising the ability of future generations to meet their own needs.
This includes two key concepts:
• Needs, particularly the basic needs of the poor nations which need to be given priority;
and
• Limits put through social and technological arrangements on the ability of environment
to meet the requirements of present and future generations. (WCED, 1987: 16)
Five years afterwards, there was another conference held in 1992 in Rio de
Janeiro.2 The conference, called the United Nations Conference on Environment and
Development, later became famous as the Earth Summit. In this conference dele-
gates from 172 countries, 108 of which were the heads of governments or countries,
participated. Moreover, more than two thousand people delegated NGOs and there
were more than 15 thousand people with consultative status attending the parallel
sessions. In this conference the following issues were addressed:
1. Analysing the production patterns—in particular when hazardous and poisonous
wastes or components were involved, e.g. petrol lead;
2. Replacement of fossil fuels with renewable energy sources. The relationship
between fossil fuel and climate change was recognised then;
3. Improved use of public transport to lower problems related to health, traffic and
emissions due to smog and air pollution;
4. Water shortage as a growing concern in the world.
This conference had an important outcome which was the agreement on the
Climate Change Convention and it led to another achievement which was the Kyoto
Protocol.3 This has been modified several times and is currently known as the Paris
2 In2012 this was repeated but with lower success and lower prominence.
3 Thisagreement, the Kyoto Protocol, is arranged in the United Nations Framework Convention on
Climate Change. Countries, which have joined in this agreement, are committed to lower carbon
dioxide emissions and five more greenhouse gases, alternatively if they keep their emission levels
or do not lower their emissions they get involved in what is called emission trading. The protocol
Accord, agreeing to limit climate change to 1.5°. This has been signed up to by almost
all nations although it is perhaps significant that the USA, under the leadership of
Trump, has recently decided not to be included.
The other agreement was about the lands belonging to the indigenous people,
and accordingly, it was agreed not to do any activities in such lands that might
be environmentally harmful or that might be considered inappropriate culturally.
Also, The Biological Diversity Convention started at this conference with the aim of
redefining measures for money supplies that would not destruct natural ecology or
lead to non-economic growths.
Agenda 21 was another outcome in relation with sustainable development. The
number 21 is used to declare our century and the aim was to imply its long term and
futuristic expectations. This agenda lists the measures to be taken by governments and
nations and the UN in the fields of their impact on their environment. It specifies three
key points as information, integration, and participation which would assist countries
in attaining sustainable development which includes its interdependent pillars. The
emphasis of this agenda was on that for sustainable development everybody uses and
provides information and that the traditional sector-oriented ways of doing business
should be changed with modern ways involving cross-sectoral co-ordination and
that social and environmental concerns should be integrated into all development
processes. Besides the emphasis was on decision-making through public participation
in broad scales as a key requirement to attain sustainable development.
The drafting of this agenda started in 1989 through sessions of consulting and
negotiating and, finally, it was announced at the conference. The agenda has forty
chapters in four sections and in almost 1000 pages considered items as follows:
Section I: socio-economic aspects
Here is the list of main issues:
• Poverty eradication
• Consumption awareness
• Birth and population control
• Health and hygiene
• Patterns of Settlement of people
• Decision-making based on development and environment.
Section II: resource management and conservation

• Protecting the atmosphere
• Fighting with deforestation
• Biological diversity conservation
• Pollution control.
was adopted in 1997 and ran from 2008 until 2012. To date, the USA has not signed the protocol
and Canada withdrew in 2012. It was succeeded by the Doha Amendment that has not currently
been ratified by enough countries to make it an international requirement and so the future of the
Protocol seems uncertain. Subsequently the Paris Agreement is current.
Section III: empowerment of principal groups

• Women and children, non-governmental organisations, workers, businesses and
authorities locally.
Section IV: implementing tools

• Transfer of technology and science
• Educating
• International organisations and mechanisms and financial arrangements.
On the 20th anniversary of the release of the Brundtland Report, the World Busi-
ness Council on Sustainable Development (WBCSD) provided a report of its own—
Then and Now: Celebrating the 20th Anniversary of the Brundtland Report—which
provided an update on the progress made in the intervening years. The WBCSD
report gives an account of the Brundtland report but focuses particularly on how the
WBCSD has developed itself as the business voice in the sustainable development
arena and what actions they have taken towards the future. Although it is primarily
about self-promotional, this report shows that the WBCSD has made some positive
efforts over the years since Brundtland. Nevertheless, it also highlights that nearly
30 years after the original report, almost everything in the original report is still
relevant today, including the warning about climate change. There is some cause
for optimism though as climate change is now more of an accepted fact and global
warming has entered popular consciousness as a cause for concern. So perhaps pres-
sure from individuals will lead to the action which has been largely missing for the
last 30 years.
Summits and conferences concerned with climate change continue to occur on
a reasonably regular basis. Indeed the Paris conference held in 2015 is actually the
21st such conference—many conferences without too much action! This conference,
however, led to the Paris Agreement on action to reduce climate change. The agree-
ment would come into force when ratified by at least 55 countries and, on Earth
Day 2016,4 174 countries ratified it and it is now in force. The agreement is to limit
global warming to less than 2% and to seek action to limit it to 1.5%. This requires
the achievement of zero net anthropogenic greenhouse gas emissions5 before the
middle of the century. The main countries crucial to achieving this are the USA and
China and this is a problem as President Trump has withdrawn the USA from the
accord (2017) and restricted funding for research into the creation of greenhouse
gases (2018).
4 22nd April 2016.

5 In other words emissions caused by human activity.
1.3 Impacts and Implications of Environmental Issues
According to Gray, Bebbington, and Walters (1993) when a company carries out
some activity that affects the environment the conventional accounting system does
not reflect the ways in which it has impacted that environment. The effects on the
environment can either be positive, for instance by investing in public services like
a landscaping project or a school or be negative, for instance, by causing pollution
through mining activities.
As a result of a company’s activities, some benefits, as well as costs, are imposed
on the environment. Of course, that company with no consultation incurs such bene-
fits and costs and as argued by Bebbington, Brown, and Frame (2007) in fact they
shape part of the company’s operational functions. However, such activities are not
included in the company’s conventional accounting,6 and as a result in its field of
responsibility. Hence, these kinds of benefits and costs are externalised. The topic
of externality is related to how a company externalises such costs and benefits to
outside. Nevertheless, they remain within the ambit of the organisation’s activities
and therefore within their accountability.
Traditionally these costs and benefits that have been externalised are not consid-
ered to be related to the company and therefore are not included in the company’s
accounting (Gray, 1992). However, the fact is that it is problematic and difficult
to quantify and measure the impact of this externalisation—especially from an
accounting point of view—which might be a reason for not including these effects
in the company’s accounting (Crowther, 2002). However, maybe it is fair to say that
whatever is externalised from a company include more costs than benefits—with the
resulting net cost being an externalisation.
Thus it can be seen that this externalisation has led to gains for a typical company
and such a failure in accounting for all benefits and costs has resulted in overstate-
ments in reporting the company’s value creation. The reason for this happening
is limiting the company’s accounting evaluation to its inner impacts. Of course, a
company can report its value creation by accounting through such externalisation
of its costs and in this way excluding them from the accounting of their activities
(Mathews, 1993). In an environment in which the ethos is changing to one in which
the polluter must pay the costs of the effects of that pollution then CSR raises to
prominence (Maunders & Burritt, 1991).
A more direct environmental cost that an organisation has to incur is that of
energy for its production processes. As energy sources become scarcer, or at least
more costly to acquire, then this raises the price of energy and therefore operational
costs of manufacturing. Here, CSR and operational efficiency intersect, as the former
requires environmental efficiency, while the latter requires financial efficiency and
both require the minimum usage of energy.
6 Although these costs are considered as the costs of operation of a company and so are included in
the accounting but traditional accounting is unable to thoroughly recognize all the benefits and costs
due to these actions. Social and environmental accounting, as exemplified through Triple Bottom
Line reporting includes these effects—see Aras and Crowther (2009).
1.4 Manufacturing and the External Environment
During the previous few decades, it has been recognised that the external environment
is affected by the activities carried out by a company. This necessitates the account-
ability of the company not just to its shareholders but also to a greater audience. This
necessity was initially put forward during the 1970s7 and some authors have consid-
ered the firm’s social performance as a member of the whole society. Ackerman
(1975) argued that the majority of the large-scale businesses have already realised
the need to adjust with the recent social environment of accountability towards the
community but that the alignment of business to financial outcomes is a constraint
for this. In the same way, McDonald and Puxty (1979) argue that shareholders are
not anymore the only owners of the but as the firms operate in the society they are
responsible for it and so firms are changing to be more accountable to all stakeholders.
It also implies that the external environment that gets affected by the activities of
the firm is concerned about such activities as the owners of the firm. Moreover,
there are a number of stakeholders who have credible concerns regarding the activ-
ities of a firm, and the business activities impacts them. They have both an interest
and also an influence on the formation of the activities of a firm. Their influence
is so substantial that one can discuss that the power of these stakeholders is as a
kind of quasi-ownership of the firm. The traditional role of accounting in reporting
results was challenged by Gray, Owen, and Maunders (1987) and they presented the
view that what is required is a stakeholder rather than ownership approach towards
accountability. This is because shareholders are usually concerned with profits and
dividends only while stakeholders take into account the negative and positive exter-
nalities generated by a business as well.8 Additionally, Rubenstein (1992) went a step
ahead and emphasised on the need for the formulation of a social contract between
businesses and stakeholders.
The main concern of this social contract is for the future and the use of the
term “sustainability” is a manifestation of it (Seifi & Crowther, 2012). Such a term
appears everywhere either in the discourse of a company’s performance or in that
of globalisation. Indeed, sustainability is a controversial issue for which there are
so many definitions of what might mean by it. As stated by Crowther (2002), the
widest definitions of the term are concerned about the impact of present actions upon
the available options in the future and this is central to the Brundtland definition of
sustainable development (WCED, 1987). By using the resources now nothing will
remain to be used tomorrow, which is especially important if the amount of such
resources is finite. Therefore, the quantity of extractive resources like oil, lead, iron
or coal is finite and as they are used there will not be any available for later utilisation.
In other words, those resources become depleted. There will be a time in the future
when in order to the activities that are now performed by such resources alternatives
7 The idea has been promoted over a hundred years earlier by philosophers, like Robert Owen (1816).
8 Many have criticised the merits of using a model including stakeholders for accountability and
performance measurement. Details of this topic can be found for instance in Hutton (1997), Sternberg
(1997, 1998) and Freedman and Reed (1983)’.
will be required. Although it might happen in a distant future, however, what is of

concern more now is that by depletion of a resource the cost for gaining what has
remained will increase which therefore will lead to an increase in the company’s
costs of operations.9 Thus, regardless of replaceability, the cost structure of business
inevitably changes10 and this has implications for sustainability. Indeed an element
of competition is injected—and supply becomes restricted but demand continues to
increase as the world develops—and this raises the transaction costs of acquiring
resources as firms must compete to acquire the restricted supply.
1.5 Standardising and Production
A large quantity of production accompanied with less variety was the key feature
of mass production as inducted by Henry Ford. This automated system offered an
opportunity for customers to buy cars in any colour they wish on condition that this
colour be black! (Ford, 1922). Car manufacturers started standardising their cars as
a way of easing their production processes. Mass production lets the manufacturers
utilise professional machinery without a need for highly skilled labour. In this method,
manufacturers can produce standardised cars in high quantity and proper costs. This
concept is called the “economies of scale”.
On the website of the International Organisation for Standardisation (ISO) (www.
iso.org), it is written that standards play a significant role in the modern world. Along
with economic and scientific development, standards also are created or amended.
Usually, people do not recognise the importance of standards as long as services and
products satisfy their needs. But if a particular standard does not exist, then the effect
will soon be observed. When the quality of products is not up to the mark, or they
are hazardous or not reliable, or when they do not match with the already existing
devices and equipment, then people easily notice it.
Defining production standards at a particular time or period is directly associ-
ated with the industrial development level. More new standards or revised ones are
needed by the creation of new ideas and innovations. Aras and Crowther (2008b)
consider sustainability as a currently fashionable concept. But this fashionable and
attractive concept would also need the creation of new standards. This is in line
with the title of the ISO strategic plan. The plan is titled: “standards for a sustain-
able world”. This implies that ISO has aimed at introducing new standards that can
effectively contribute to the accomplishment of sustainability. Yet many others are
of the view that drastic amendments are needed in the process of standardisation to
9 Or when a species of an animal or a plant gets extinct it is not anymore possible to gain the benefits
from that. At the moment, lots of medications are manufactured using fauna and flora that are yet
to be discovered. Therefore, it might become crucial in future.
10 At the present time, this has become very manifest in the dramatic changes in the price of oil,
firstly as a dramatic rise in price and subsequently by an equally dramatic fall in price as fracking
becomes common place and Iran rejoins the world economy, and the consequences for the world
economy.
ensure sustainability. For example, three-fourth of the members of ISO are devel-
oping countries but, in fact, they are not so active in the formulation of standards and
further voting on them. This implies that it is the active minority (one fourth) whose
comments are the basis for the preparation of the international standards which are
supposed to establish the lowest level of acceptable quality. That’s the reason for
which developing countries, which have a larger proportion of ISO membership find
it hard to conform to the international standards. Therefore, as the international stan-
dards created as such at the moment do not address the concerns of all stakeholders,
this process does not conform to sustainability requirements. This fact opposes ISO
strategy outlined earlier. Numerous studies conducted by bodies such as the UN’s
Industrial Development Organisation and the UN’s Food and Agriculture Organiza-
tion identified a number of constraints in the way of implementing standards in the
developing countries. Some of these limitations are listed below.
• Deficiency of tools and infrastructure for quality control and metrology,
• Intrinsic flaws in public agencies, the civil society, private sector and other actors,
• Inadequacy of finances allocated to the formulation of standards and their
distribution,
• Improper institutional and regulatory framework defined to monitor standardisa-
tion processes.
Consequently, developing countries have to amend and modify international stan-
dards so that they can be appropriately implemented for them. This may contradict the
global relevance policy presented by ISO, according to which “the necessary feature
of an international standard is that it is implementable by all countries, industries
and rest of the stakeholders in international and national markets”.
Conversely, lax standardisation at the national or international level (Seifi &
Crowther, 2015), cannot help to achieve sustainability. For instance, in ISO 15502
which is adopted as IEC 62552, there is such lax restriction when defining the test
for storage temperature inside the cabins or a fridge/freezer. The trouble appears
when during the storage temperature test, the appliance needs to cycle but no limit
is considered for cycling. So as long as the required temperatures are met inside the
cabin, it does not matter if it works 89% or 38%. This standard cannot be considered
as environmentally sustainable as well because no range is defined for the permitted
insulating materials and refrigerants.
However, it does not apply to the majority of IEC standards, in which the required
level of quality is outlined, and therefore, the person who tests the equipment or
appliance can clearly differentiate between a poor and superior quality. For example,
one can mention the safety standards for household appliances. However, there are
still flaws in some of the standards like the ones for televisions where this level of
transparency and clarity is not met.
The other important point is to implement standards. People are divided into their
idea about the way to implement standards: some believe in mandatory and the other
believe in voluntary standards. Those who believe in mandatory application argue
that the ethical awareness of society is not so high to rely on them to do what is
best for all. In other words, a utopia is too idealistic to be expected. Moreover, as it
might not be to the benefit of individuals to follow social responsibility voluntarily

such an attitude may lead to a lack of quality and integrity. On the other hand,
those who believe in the voluntary application of standards argue that any regulation
would lead to a barrier to trade and people’s prosperity will only be gained through
getting rid of governing rules including standards on a mandatory basis. These people
also may believe that people should culturally improve to act socially responsible
then they will look after the application of standards the best possible. Therefore,
the EU Commission (2002) defined corporate social responsibility as a voluntary
concept through which organisations integrate environmental and social concerns in
interacting with stakeholders and also in performing their business.
Whatever route is taken in standardisation, whether mandatory or voluntary, what
matters is later conformity assessment procedure to ensure conformance to it. In
the second part, ISO Development Manuals conformity assessment is defined as
the procedure of determining compliance of a process, service or product with the
relevant requirements. Conformity assessment has facets such as testing, inspecting
and certificating. But how this process is applied is what needs great attention. If
the process of conformity assessment is carried out correctly it will lead to integrity
in monitoring products and it will be fair for all manufacturers and customers. The
importance of the correct application of these facets is as much as or even higher than
the standard by itself. Conformity assessment might be implemented by a country’s
national standards body (NSB), or it might be performed through notified bodies.
This is a especially crucial matter when discussing the developing countries who
may suffer a shortage of resources for doing conformity assessment properly. In
these countries, there are numerous cases in which the authorised laboratories don’t
have adequate tools or personnel, so they do not have enough competencies to test
products. In some of the developing countries, the manufacturers’ laboratories have
been authorised so they test their competitors’ products and decide their conformity.
Obviously, one might not expect a completely unbiased result for their tests and
therefore their validity is under question.
1.6 Critiquing Sustainability
It is apparent from the analysis already undertaken that a number of factors have
combined to raise a general concern about sustainability and to raise it to its current
prominence. When this is combined with a recognition of the limited supply of raw
materials and increasing energy consumption then there is clearly a need for conser-
vation. Actually, the ability to achieve sustainability must be questioned because
resources are depleted and so we cannot preserve unchanged the options for the
future as per the Bruntland definition.
From this perspective, sustainability refers to the assumption that no more natural
resources should be utilised by society than it is achievable to regenerate (Aras &
Crowther, 2008a). Hawken (1993) argues that sustainability can also be defined in
the context of the carrying capacity of an ecosystem and can be quantified by input-
output models that have been developed. These input–output models can be used to
describe the concept of sustainability. If an organisation is considered to be operating
in a wider economic and social system then this suggests that such impacts should
be considered. It should not be done merely for the sake of quantification of costs
incurred and value generated in the contemporary period but also for the future of
the company itself. Such an approach to sustainability describes Gaia Theory created
by Lovelock (1979). The model put forward by Lovelock depicts the co-dependence
of the ecosphere and living organisations in the ecosystem. In this theory, the entire
system, and all constituents of this system are inter-reliant and equally essential for
preserving the planet Earth and thus sustaining life.
These concerns are important for society as a whole, but also at the lower levels of
both the individual nation states and the individual or company levels. At this lower
level, any measurement of sustainability would need to take into account both the
rate at which resources are being consumed and the rate at which those resources
are being regenerated. It is possible to take into account a degree of unsustainability
either by developing truly sustainable operations or by planning for a future in which
the resources currently required do not exist. In actual practice, companies usually
try to become less unsustainable by raising their efficiency in resource consumption.
An energy efficiency program is a classic example of this.
One problem with sustainability, however, is that there is no agreed-upon defi-
nition and it has a different meaning for different people. Yet there is an increasing
consciousness that there exists a debate regarding the true meaning of sustainability
and even that if it is possible to accomplish sustainable development as suggested in
the Brundtland Commission report (Schmidheiny, 1992). Sustainable development
has been incorporated in policy landscape and widely debated by large businesses,
Nation States and the United States through ICC and WBCSD (Gray & Bebbington,
2001; Beder, 1997; Mayhew, 1997).
It can be seen that the concept of sustainability is problematic and there is a further
confusion surrounding its meaning: for some people, sustainability means nothing
more than the ability to continue without change but it is often interpreted as growth
in a sustainable manner (for instance see Marsden, 2000; Hart & Milstein, 2003).
In fact, sustainability and sustainable development are considered to be synony-
mous with many people. When it comes to the concept of corporate sustainability
(van Marrewijk, 2003), confusion is made worse by the fact that in the literature of
management, the idea of being sustainable has been used for over three decades (as
an instance see Reed & DeFillippi, 1990) to promote the idea of continuity. This
enabled Zwetsloot (2003) to merge the idea of corporate social responsibility with
the development of techniques that ensure steady continuation in improvement and
development to suggest that sustainability is thus ensured.11
11 Sustainability requires R&D and technological development—and there is often a simple but
comfortable assumption that this will enable our descendants to solve the problems which we are
causing in the present!
There is an almost undisputed assumption that growth is still possible (Elliott,

2005)—this is indeed one of the foundations of the Brundtland Report; conse-
quently, sustainability and sustainable development can be treated alike. The view-
point of market-driven economics is universal and means that development is not only
possible but also desired (Spangenberg, 2004). Under this assumption, Daly (1992)
states that the economics of growth is all that must be dealt with and that it can be
achieved by the market by dealing separately with the three economic objectives
of the efficient allocation of resources, sustainable scale, and equitable distribution
of resources. This debate is continued by Hart (1997) who considers the idea of
sustainable development simply as an opportunity for business. He further argues
that once a firm recognises its strategy towards the environment then prospects for
new services and products become obvious.
The majority of studies concerning economic sustainability identify just the two
dimensions of society and the environment (Dyllick & Hockerts, 2002). Some of
the studies (for instance Spangenberg, 2004) also identify a third dimension that is
associated with organisational behaviour. According to Aras and Crowther (2007a),
it is not sufficient to limit the analysis to these dimensions. A major problem in this
regard is that most researchers assume that optimisation of environmental/social and
also a financial performance of an organisation are not compatible with each other.
As Crowther (2002) contends they consider a dichotomy leading to conflict between
environmental/social and financial performances of an organisation. As a result, the
majority of research in the field of corporate sustainability lacks a recognition of
the role of the financial performance of an organisation (Ameer & Othman, 2012)
as an important aspect in sustainable development and so financial analysis has
been missing in research together with other kinds of analysis.12 Aras and Crowther
(2007b) contend that this is such an important aspect of corporate sustainability that
adds another dimension to its analysis. They also add that another dimension called
organisational behaviour should also be included in the broader analysis of corporate
culture.
It has been shown that sustainability and sustainable development are often treated
as alike but, in fact, they are not the same thing. Sustainable Development should be
considered to be a kind of development that tries to connect environmental conserva-
tion and economical growth, while at the same time, considers other issues like educa-
tion and poverty alleviation which are conventionally related to growth. According
to Daly (1999), it aims at developing ways of eradicating poverty while protecting
economic development and biodiversity without extinguishing environmental capital
quickly, to the cost of development in the long run. As Amba-Rao (1993) states of
course it is generally agreed increasingly that countries and companies should accept
responsibility for enhancing people’s interest in economic activities and also for the
welfare of the society.
12 Cynically, it might be considered that it might have happened as many researchers are not skillful
enough to carry out thorough financial analysis even though they understand its importance.
1.7 Conclusions
Decision-making is a large and complex process for any organisation, no matter what
its purpose. Such decisions go far beyond merely designing the goods or services
produced and the processes whereby they are delivered. Often they are concerned
with the making of strategic decisions. Inevitably, when firms engage in the market
then transaction costs also become relevant as these are affected by the competition
between firms. Naturally, also all organisations desire their own continuance and
therefore have a great interest in sustainability.
It is unquestioned, almost unquestionable even, that sustainable development is
based on the Brundtland’s three pillars of social, environmental and economic. In
general these are also the topic of corporate social responsibility and so it can be
seen that corporate social responsibility and sustainable development are to a large
extent synonymous. Given the increasing apparentness of the existence and effects
of resource depletion then sustainability must be fairly central to the production
processes. So too must access not only to the raw materials needed to make the
products but also to the availability of power, generated through the consumption of
natural and renewable resources.
The analysis undertaken in this chapter has demonstrated that for several reasons,
sustainability has become an important topic. It has also considered the issues
involved in sustainability in the present environment in which the increasing scarcity
of resources has got more apparent but it not been addressed in a satisfactory manner.
These are issues that affect all organisations and this includes the public sector as
much as others. It can be argued that what is important in the management of the
necessary resources and what is needed for this is appropriate rules of governance.
Of course, such rules and procedures need to be satisfactorily applied.
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Part I
Social Responsibility in the Public Sector
Chapter 2
Accountability and Sustainability
Reporting in the Public Sector. Evidence
from Italian Municipalities
Fabiana Roberto, Roberto Maglio, and Andrea Rey
Abstract In the past two decades, the developments of the international issues
have increased the need for means of progressing the sustainable development
agenda, through which emerged the contribution of accounting through sustainability
reporting (SR) techniques. Despite its vital relevance for the public sector, sustain-
ability accounting and accountability do not count to extend research and it is still
considered as an emerging field. This paper analyses, using the content analysis tech-
nique, the voluntary SR reports in a group of Italian municipalities, by comparing
them with the latest Global Reporting Initiative (GRI-G4 2013) guidelines. The
analysis found low compliance with the GRI-G4, with only 27.82% of the items
disclosed.
Keywords Sustainability reporting · Public sector · Content analysis ·

Municipalities
2.1 Introduction
Sustainable development is essentially the recognition that that global risks of

environmental degradation and the socio-economic issues related to poverty and
inequality are unsustainable in the long term (Greco et al. 2012; Williams et al.
2011). Therefore, the adoption of ‘strategies’ of sustainability would be ideal and
necessary in order to fulfill the current needs without compromising future gener-
ations. In this scenario, the public sector entities need to take an active role and
compromise in sustainable development (Ball and Bebbington 2008; Gamage and
Sciulli 2017). As Birney et al. (2010) state, “Public sector organisations are central to
the delivery of sustainable development. Every aspect of their role—from education
to environmental services, and from planning to social care—shapes how people
F. Roberto (B) · R. Maglio · A. Rey

Department of Economics, Management, Institution, University of Naples “Federico II”, Naples,
Italy
e-mail: fabiana.roberto@unina.it
https://doi.org/10.1007/978-981-15-6366-9_2
20 F. Roberto et al.
live their lives”. Moreover, Ball and Bebbington (2008) stated that public organiza-
tions can play a superior role in terms of performance and sustainability reporting
compared to the private sector one’s since their actions are basically linked to logic
related to sustainable development rather than to market (Siboni and Sangiorgi 2013).
Other scholars have pointed out that public sector organizations should have an active
role in sustainable development (Ball et al. 2014) because one of its jobs is to deliver
public policies that favour society in general (Ball and Grubnic 2007). Furthermore, it
is important to notice a growing interest among stakeholders about the sustainability
of public services, along with greater concerns among public entities to build public
trust in them, by publishing details of their sustainability goals (Frey 2009; Galera
et al. 2015; Niemann and Hoppe 2018). It is, therefore, crucial for the public sector
to assess, disclose and report on their social, environmental and economic policies,
strategies, actions and results (Ball and Grubnic 2007; Dumay 2016; Dumay et al.
2009; Farneti et al. 2010; Leeson and Ivers 2005).
For the abovementioned reasons, in recent years the public sector entities have
been more actively involved in a deep process of managerial and organizational
change (Manes-Rossi 2016) through which they started to embrace sustainability
values as fundamental for the sector in general (Ceulemans et al. 2015; Dumay
2016). Indeed, in the past two decades, the development of the international issues
has increased the need for means of progressing the sustainable development agenda
(Gherardi et al. 2014), through which emerged the contribution of accounting through
sustainability reporting (SR) techniques (Ball et al. 2014; Ball and Bebbington 2008;
Dumay et al. 2010; Guthrie et al. 2010; Guthrie and Farneti 2008; Joseph 2010;
Mussari and Monfardini 2010; Olson et al. 1998; Williams et al. 2010). The tradi-
tional financial report has been blamed for the limited attention paid to the future
of public sector entities (Manes-Rossi 2018) and for not providing a full account
of an organization’s social and environmental activities (Gore 2006; Guthrie and
Farneti 2008; Biondi and Bracci 2018; Montesinos and Brusca 2019). In addition, SR
offers to the organizations the opportunity to engage multiple-stakeholders towards
a common objective (Ceulemans et al. 2015).
This focus on SR has also been fuelled by increased attention (from policymakers
and researchers) to accountability; Willems and Van Dooren 2012; Greiling and
Grüb 2014). In fact, external reporting arrangements are common to feature in any
performance management or public sector accountability discussion (Downe et al.
2010; Niemann and Hoppe 2018).
Although SR is still voluntary, the practice is globally growing (Mussari and
Monfardini 2010). SR becomes a formidable means of communicating to stake-
holders about the organization’s performance and progress in sustainability (Greco
et al. 2015). Furthermore, in countries like Italy, social and environmental reports are
playing an important role in helping organizations to discharge their accountabilities
to various stakeholders (Sordo et al. 2016).
However, while this form of reporting has been taken up by the private sector, in
comparison, progress within the public sector appears patchy and, in many respects,
SR is still an emerging field (Dickinson et al. 2005; Ball 2004; Lodhia et al. 2012;
Biondi and Bracci 2018).
2 Accountability and Sustainability Reporting … 21
Various initiatives have been undertaken in the last decades encouraging volun-
tary SR in the public sector (e.g. CIPFA 2005; GRI 2005; World Bank 2008). The
European Commission has also strongly encouraged central and local governments
to adopt SR and a recent directive (2014/95/EU) requires all large ‘public interest
entities’ to start disclosing ‘non-financial and diversity information’.
Furthermore, several national and international institutions have developed a
variety of models and tools for SR (Dumay et al. 2010; Yongvanich and Guthrie
2006). Among all of these different SR initiatives, one of the most interesting and
therefore used are the guidelines of the Global Reporting Initiative (GRI) which
attempt to provide an international framework for SR for all types of organizations
(del Mar Alonso-Almeida et al. 2014; Farneti and Guthrie 2009; Farneti et al. 2010;
Tarquinio et al. 2018).
These guidelines have evolved since their first version (GRI 2000), and currently,
the fourth generation is being used since its launch in May 2013. In addition, the
GRI published also a pilot sector supplement designed to specifically address the
reporting needs of these entities (GRI 2005).
The GRI Sector Supplement for Public Agencies identifies several reasons for
preparing SR:
to promote transparency and accountability;
reinforce organizational commitments and demonstrate progress;
improve their internal governance;
meet disclosure expectations and make information available to facilitate dialogue and
effective engagement with stakeholders (GRI 2005, p. 8).
According to GRI, there are multiple benefits to implementing SR. Among those
benefits, there is an effective sustainability reporting cycle, which includes a regular
program of data collection, communication, and responses, which have the power
to help all reporting organizations both internally and externally (Novokmet and
Rogošić 2016).
Most prior research into SR has focused on social and environmental disclosure
in private organizations’ reports (Milne et al. 2009; Guthrie and Abeysekera 2006;
Parker 2005), rather than into reporting by the public sector or not-for-profit enti-
ties (Ball and Grubnic 2007; Bebbington 2007; Farneti and Guthrie 2009; Farneti
et al. 2010; Mussari and Monfardini 2010; Siboni and Sangiorgi 2013; Siboni et al.
2013). Despite its vital relevance for the public sector, sustainability accounting
and accountability do not count with extant research and it is still considered as an
emerging field (Ball and Grubnic 2007; Dickinson et al. 2005; Williams et al. 2011;
Tort 2010; Greiling and Grüb 2014).
In the Italian context, previous research mainly focuses on a normative perspective
such as defining SR and proposing variables on what public sector entities ‘should’
report. However, there is a substantial gap in the analysis of practices, to explore
what are the contents of these disclosures (Farneti and Siboni 2011).
This paper, in responding to recent calls for more research into SR within the
public sector (Ball and Grubnic 2007; Lewis 2008; Guthrie et al. 2010), contributes
to research on SR in the public sector in the context of voluntary reporting by focusing
on what a group of Italian municipalities reports in their stand-alone sustainability

reports in comparison to the latest GRI guidelines (GRI-G4 2013). Therefore, the
research question is “What and how much sustainability information is reported by
Italian municipalities in comparison to the GRI-G4 guidelines”?
Municipalities have been chosen because they have been highlighted as the poten-
tial mayor players in sustainable development (Ball 2004) since they have the respon-
sibility of implementing environmental projects in their local communities (Joseph
2010; Potts 2004) and among their multiple responsibilities through many stake-
holders’ groups, who are no longer confined to the traditional role of ‘housekeeping’
(Ball and Grubnic 2007). Furthermore, local governments have a greater proximity
to citizens and address a larger number and a greater diversity of stakeholders
(Navarro-Galera et al. 2015).
The rest of the paper is structured as follows: Sect. 2 presents prior literature on
SR in the public sector and the theoretical background of this study; Sect. 3 describes
the research methodology; Sect. 4 presents the main findings of the study and, lastly,
Sect. 5 presents our conclusions.
2.2 Literature Review and Theoretical Framework
In the past two decades, there has been growing research on environmental and
sustainability reporting initiatives in the public sector (Siboni and Sangiorgi 2013;
Domingues et al. 2017). Research studies have found disclosure practices around
the world which are directly related to SR (e.g. Adams et al. 1998; Gray et al. 1995;
Leeson et al. 2005), giving different insights into the nature and extent of voluntary
social and environmental disclosure.
However, the theme of SR has been considered almost only on the business side
(Fifka 2013; Milne et al. 2009; Guthrie and Abeysekera 2006; Parker 2005), while
less attention has been paid to the public sector (Ball and Grubnic 2007; Bebbington
2007; Dumay et al. 2010; Farneti and Guthrie 2009; Farneti et al. 2010; Guthrie and
Abeysekera 2006; Mussari and Monfardini 2010; Siboni and Sangiorgi 2013; Siboni
et al. 2013; Williams et al. 2011).
In reaction to this call for more research into sustainability reporting within the
public sector, some studies have been carried out during the last decade.
Prior studies at the international level have investigated the ‘quantity’ and ‘quality’
of voluntary SR practices by public sector entities. In these studies, it was found that
generally disclosure levels are low and SR in public sectors is very poor, illustrated
by the lack of consistency in type and extent of SR.
Although there is an increased interest in the topic, there are only a few studies that
really focus on the empirical perspective by providing evidence on ‘what’ organiza-
tions actually report. For instance, Jones et al. (2005) investigated SR in Australia
across a broad range of private and public sector entities. The results of this investi-
gation show that just a few of these councils report about sustainability performance,
instead of confining their sustainability disclosures to general statements of policy.
Similar findings were provided by Guthrie and Farneti (2008) in their study focused
on Australian public sector SR practices. Although their reports had been informed
by the GRI Guidelines, the application of the GRI was fragmentary and organiza-
tions chose only some of the GRI indicators to disclose. Specifically, they found that
only 32% out of 81 elements within the GRI were used for reporting, concluding
that SR in the public sector is still lacking in delivering the impact of sustainable
development to the organization (Joseph 2010) since SR is mainly narrative.
Having regard to the Italian context, Steccolini (2004) developed a content analysis
of the earlier Italian LGs social reports and found that social reports tend to provide
data and descriptions, but lacks on the intent of assessing results. Moreover, Siboni
(2007) found that in 2005 only 14% of the municipalities and 38% of the provinces
issued a social report, usually on a politician’s advice. The author also found that
social reports lack of consistency since they do not follow a specific guideline, and
tend to offer data and descriptions rather than assessing results. Farneti et al. (2010),
in a similar investigation, found that social reports in Italy are still in their infancy
since Italian LG’s social reports do not include all the elements outlined by the
GRI-G3 guidelines.
Looking at ‘quality’ aspects of SR, a study by Farneti and Guthrie (2009) focused
on the reasons why organizations report on sustainability issues rather than what they
report on. In this research, the authors undertook in-depth interviews across 7 different
public sector agencies in Australia, where the findings suggested that sustainability
reports were mainly directed towards internal stakeholders. Often these agencies had
commenced with either triple bottom line (TBL) reporting or the balanced scorecard
(BSC) before using the GRI framework, and the reason behind it lies on the fact that
international reputation has enhanced its legitimacy.
In another study conducted by Farneti and Guthrie (2007) they examined the
reasons for SR in 7 Australian public sector organizations by focusing on the views
of preparers of these reports. They found that the reasons for reporting were mixed
and that organizational sustainability information was mainly produced for internal
stakeholders.
Similarly, Marcuccio and Steccolini (2005) investigated 12 local authorities in one
Italian region using semi-structured interviews and an analysis of documentation.
Their results showed that the main reasons for developing SR were to emulate other
local authorities that already prepared such reports to ensure notions of efficiency,
effectiveness and accountability were upheld. However, the introduction of SR for
these local authorities was mainly influenced by public sector reforms and not by
a genuine concern for the environment. According to the authors, indeed, Italian
local governments attempted to ‘legitimize’ their activities by adopting new forms
of reporting that comply with fashionable labels that show conformity with shared
norms of rationality and progress, namely the principles of performance improvement
and citizens’ accountability promoted by the ongoing reform processes. Furthermore,
they highlighted the significant increase in the SR practice in the public sector related
to a managerial fashion, used to enhance the organization’s public image. However,
the production of such reports may give the stimulus to finally adopt a new emphasis
on sustainability (Marcuccio and Steccolini 2005).
In a subsequent study, the same authors (Marcuccio and Steccolini 2009) exam-
ined the Social Reports ‘Bilancio Sociale’ of 15 Italian local authorities (LA) in
order to verify the patterns of financial and non-financial disclosure and the factors
affecting those patterns. The authors concluded that although Italian LAs tended to
be passive and wait for law reforms before attempting to make any changes to their
reporting frameworks, in the case of SR, Italian LAs have commenced preparing SR
on a purely voluntary basis. They suggest that each LA uses SR to illustrate their
idiosyncrasies and that: “…there is not a standard set of factors that can explain the
differences in disclosure practices (p. 163)”. Thus, the legitimacy process drove the
reporting of sustainability matters.
Moreover, Farneti and Pozzoli (2005) see the self-laudatory intent of some public
organizations that have adopted social report practices. Also, Farneti (2011) observed
that within Italian LGs, the term ‘social report’ is a misnomer and that the report is
used as a tool for disclosing managerial matters.
A recent study conducted by Greco et al. (2012) highlighted important differences
in SR motivations and practices between different geographical contexts. In this
comparative study, a sample of Italian and Australian LCs was used. The authors
found that the motivation for SR appears to be affected by several political, social and
cultural values, which responds to the national contexts in which these organizations
operate. More recently, Greco et al. (2015) conducted a study about the motivations of
Italian local councils for producing SR. Their findings highlighted that initially SR is
introduced for accountability and legitimacy reasons. However, over time traditional
SR was incidental to more advanced tools of policy-making and reporting, in which
some of the stakeholders were actively involved. Thus, the authors suggested that
there is a political negotiation in which sustainability reporting finds itself.
Deducing from the literature review conducted, various theoretical frameworks
have been proposed to explain the reasons for SR practices in public sector entities
(Giacomini et al. 2018), but they are generally addressed in terms of Legitimacy
Theory (LT) (Marcuccio and Steccolini 2009) or of Stakeholder Theory (ST) (Deegan
and Unerman 2006). LT and ST may offer an appropriate theoretical framework to
explain the behaviour of public sector entities in relation to transparency, as an
essential element of accountability (Greiling and Grüb 2014; Navarro-Galera et al.
2018).
In addition, Mussari and Monfardini (2010) suggested that the Institutional Theory
(IT) (DiMaggio and Powell 1983) offers the possibility to explain the SR adoption
and diffusion in public sector entities.
IT emphasizes rules, regulations, ideas and a cultural framework that characterize
the social context in which companies work (Tarquinio et al. 2018). On the other
hand, legitimacy is based on the notion that the legitimate organization is there to
support the interests of an individual and/or group, and therefore, there is a general
acceptance in the society for that organization because it operates under a consis-
tent and fair framework. However, to maintain that legitimacy, organizations must
provide accounts of their activities in order for legitimacy communities to continue
to validate, moderate or expel the status of legitimacy (Black 2008). LT considers
the way an organization seeks to legitimize its activities and therefore meet society’s
expectations. For this reason, LT is based on the notion of the social contract, which
implies that organizations gain their right to operate through seeking and gaining
social approval (Deegan and Unerman 2006). Public sector entities can use SR as a
means to communicate with various stakeholders about management, environmental,
labour, policy and social responsibility matters. Thus, these reports have an important
role in legitimizing their conduct toward stakeholders. In this framework, govern-
ments or managers could decide not to report sustainability information because it is
not seen as a priority for their legitimation towards citizens (Giacomini et al. 2018).
According to ST, the long-term existence of an organization needs the support and
approval of its stakeholders (Liu and Ambumozhi 2009). Thus, under ST, different
groups of stakeholders and their demands may have an impact on a public entity’s
behaviour, pressuring it to give information.
2.3 Research Method
There is no consensus on what SR means, nor a common shared framework (Biondi

and Bracci 2018). In this study, we refer to multiple SR practices as a set of
different reporting labels, such as social reporting, sustainable reporting and envi-
ronmental reporting. We used the content analysis technique in order to examine the
extent of social and environmental disclosures in the stand-alone reports of 8 Italian
municipalities in comparison with GRI-G4 guidelines.1
Content analysis was chosen as it is the “dominant research method for collecting
empirical evidence” in social and environmental reporting (Guthrie and Abeysekera
2006; Parker 2005). Content analysis is “a technique for gathering data, involves
codifying qualitative and quantitative information into pre-defined categories in order
to derive patterns in the presentation and reporting of information” and “is a method
of codifying the text of writing into various groups or categories based on a selected
criterion” (Guthrie and Abeysekera 2006, p. 120).
In the Italian context, although SR is not mandatory, public entities can choose
to disclose and report their decisions on sustainability issues based on the three
national guidelines issued guidelines to encourage the transparency of the public
sector towards citizens, by using social reports. The Study Group issued the first
operating guidelines for the Social Report (GBS) in 2005 providing principles and
procedures for drafting a social report. In 2007 the GBS issued a specific stan-
dard addressed to all the public entities. The other two were issued by public agen-
cies. Specifically, in 2006 the Prime Minister’s Office of Public Affairs issued a
guide for social reporting for the public sector, mainly focused on social reporting
rather than environmental reporting. The next year the Federal Ministry of Interior
issued the document Guidelines for Social Reporting in Local Governments (2007),
1 It should be noted that the G4 Guidelines have been superseded by the GRI Standards, released on
19 October 2016. The use of the GRI Standards will be required for all reports or other materials
published on or after 1 July 2018.
which sets out guidelines for social reporting in local governments and recommends
providing disclosures regarding environmental policies and green public procure-
ment. However, as stated by Farneti and Siboni (2011) the “governmental guidelines
are generic in nature and lack significant details in terms of content, indicators, and
assurance. Also, they have a managerial focus, and they have very little to do with
sustainability, except for aspects related to labour.” Thus, we decided to use the
GRI-G4 guidelines because it “presents a good attempt to overview developments
internationally” (Ball and Grubnic 2007, p. 258). Also, “the GRI claims to provide
the basis of worldwide standardized, comparable, reporting on the sustainability of
(particularly business) organization” (Ball et al. 2006, p. 268), giving the framework
a practical appeal for organizations seeking accounting innovation.
In this study, we applied the Guthrie and Farneti (2008) framework, developed for
a previous study, with some adaptation to the last guidelines GRI-G4 (GRI 2013).
Indeed, the framework is based on the International GRI-G3 (GRI 2006) and the
public agencies supplement (GRI SSPA 2005).
The G4 Guidelines use indicators built on several principles and the standard
disclosure is articulated in three main parts:
– Strategy and organization profile;
– Management approach;
– Performance indicators.
Performance indicators are divided into six main areas: economic, environmental
and social concerns of human rights, labour practices and working environment,
and product responsibility and society. Total indicator are 79 items, comprising 9
economic indicators, 30 environmental indicators, 14 indicators of labour practices,
9 indicators of human rights, 8 social indicators and 9 indicators of product responsi-
bility. The Sector Supplement for Public Agencies adds another set of 15 indicators
to these (Guthrie and Farneti 2008). In these six categories, the number of indicators
is decreasing over time; indeed, the indicators were 92 in the G2 guidelines and 81
in the G3 guidelines (GRI 2006).
Thus, in Table 2.1 is presented the disclosure instrument built, divided into six
areas and coded into (34) aspects and 84 items including those specific for public
agencies.
In the next section are presented the results of the analysis developed, as well as
the main findings.
2.4 Findings
Scholars have expressed different opinions about the most appropriate unit of analysis
to be used for content analysis (Steenkamp and Northcott 2007). Gray et al. (1995)
suggest using in written communication words, sentences and pages. In addition,
Guthrie and Abeysekara (2006) consider portions of pages. Finally, Unerman (2000)
considers as a unit of analysis words, phrases, lines, sentences, charters and pictures.
Table 2.1 The coding instrument for SR in the public sector

Categories Aspects Items
1. Environmental Materials EN1 EN2
Energy EN3 EN4 EN5 EN6
Water EN7 EN8 EN9
Biodiversity EN10 EN11 EN12 EN13
Emissions, effluents, and waste EN14 EN15 EN16 EN17
EN18 EN19 EN20
Products and services EN21 EN22 EN23 EN24
EN25
Compliance EN26 EN27
Transport EN28
Overall EN29 EN30
2. Social—labour practices Employment LA1 LA2 LA3
and decent work labour/management relations LA4
Occupational health and safety LA5 LA6 LA7 LA8
training and education
Diversity and equal opportunity LA9 LA10 LA11LA12
Equal remuneration for women LA13
and men
3. Social—Humans Rights Investment HR1 HR2 HR3
Non-discrimination HR4
Freedom of association and HR5
collective bargaining
Child labour HR6
Forced and compulsory labour HR7
security practices
Indigenous rights HR8
Assessment HR9
4. Social—Society Local communities SO1 SO2
Anti-corruption SO3 SO4 SO5
Public Policy SO6
Anti-competitive behaviour SO7
Compliance SO8
5. Social—product Customer health and safety PR1 PR2
responsibility Product and service labelling PR3 PR4 PR5 PR6 PR7
Marketing communications PR8
Customer privacy compliance PR9
6. Public agencies—specific New disclosure elements for PA2 PA3 PA4 PA5 PA6 PA7
supplement for PA public agencies and new social PA11 PA12 PA13 PA14
indicators for public agencies
(continued)
Table 2.1 (continued)

Categories Aspects Items
Administrative efficiency PA15
The coding instrument applied in this study record the use or otherwise of an
individual item within the reports analysed. Moreover, a total index was constructed
to show the percentage of possible disclosures (84 items × 8 organizations = 672
possibilities). The index was determined by the total observation from the reports
analysed, out of the total possible observations. Also, the analysis recorded the type of
information disclosed (declarative, monetary, non-monetary), basing on a common
classification in the literature (Guthrie et al. 2004).
Table 2.2 presents the characteristics of the social reports and the framework
adopted for each municipality analysed. Most of SR lacks consistency since they do
not follow a specific guideline (Steccolini 2004).
Table 2.3 highlights ‘what’ has been disclosed in terms of categories and items.
The first column shows the categories (n = 6). The second column gives the sum of the
elements within the GRI-G4 coding instrument (n = 84). The total index is reported
in the last column. The analysis undertaken shows that of a possible total of 672, only
187 disclosures have been reported, which is almost 28% of the possible items that
could have been reported by the municipalities. In addition, it should be noted that the
category of ‘Public Agencies’ accounts for the highest number of disclosures within
Table 2.2 Length and framework followed for SR

Municipality Sustainability reporting Number of pages in the Framework followed
tool report
M1 Social and environmental 230 None (developed
report internally)
M2 Social report 151 None (developed
internally)
internally)
internally)
M5 Social report 158 GRI-G3 guidelines
M6 Environmental report 96 None (developed
internally)
M7 Social report 127 Italian Directive for a
social report issued by the
Department of Public
Affairs (2006)
internally)
Table 2.3 Total SR disclosure by all items

Category A = Number of B = Total Total possible Total index B/C
core and observations observations 8 × (%)
additional items from all reports A=C
Environmental 30 68 240 28
Human rights 9 0 72 0
Labour practices 13 35 104 33.65
and decent work
Product 8 4 64 6.25
responsibility
Society 9 21 72 29.16
Public agencies 15 59 120 49.16
Total 84 187 672 27.82
Table 2.4 Type of information disclosed

Quality Absolute value of observation from all Percentage
reports
1—Declarative 126 67.4
2—Monetary 9 4.9
3—Non monetary 48 25.5
4—Monetary and non-monetary 4 2.2
Total 187 100%
the dataset analysed, with 49.16%, followed by ‘Labour practices and decent work’
with 33.65%, ‘Society’ with 29% and ‘Environment’ only accounting for 28%.
Finally, Table 2.4 highlighted the type of information disclosed (i.e. declarative,
monetary, and non-monetary). Only 4.9% of sustainability reporting disclosures were
monetary in nature, 25.5% were non-monetary and 67.4% were declarative. This
indicates little use of monetary values.
2.5 Conclusions
In the past two decades, there has been growing research on environmental and
SR initiatives in the public sector (Siboni and Sangiorgi 2013; Domingues et al.
2017). Although several authors have highlighted the need to understand public
organizations’ current SR practices, a few researches have been conducted in this
field (Ball and Grubnic 2007; Guthrie and Farneti 2008; Lewis 2008; Farneti and
Guthrie 2009; Guthrie et al. 2010). This study offers a view of SR practices in Italian
municipalities and their consistency with GRI G-4 guidelines, with similar results to
prior studies (see Farneti et al. 2010). The analysis found low compliance with the
GRI-G4, with only 27.82% of the items disclosed. This level of disclosure is higher
than the level found in Guthrie and Farneti’s (2008) study of Australian public sector
‘better practice’ organizations, which found that the GRI framework was used but
its use was fragmented even though all of the organizations insisted that they had
followed them. Our results highlight that no ‘Human rights’ item was communicated
and few disclosures were observed about ‘Product responsibility’ and ‘Society’. The
findings suggest that the practice of producing SR is improving over time but is still
under-developed in Italian municipalities. Furthermore, it appears that the SR has
been used to describe administrative and managerial matters rather than to disclose
social and environmental information. Indeed, the ‘public agencies’ category was
the most reported by the 8 municipalities. Similar findings emerge from a study on
Italian university social reports (Mazzara, Sangiorgi and Siboni 2010). Finally, with
regard to the type of information disclosed, it was found that items recorded were
mainly ‘declarative’ (67.4%) or non-monetary (25.5%). Less disclosure has been
given to ‘monetary’ (4.9%), and ‘monetary’ and ‘non-monetary’ (2.2%) information.
This result differs from studies concerning public sector organizations’ sustainability
and social reporting (Guthrie and Farneti 2008), that found a ‘non-monetary’ and a
‘monetary and non-monetary’ preponderance disclosure.
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Chapter 3
The Portuguese Tax System
for Non-profit Institutions
Fátima David, Lúcia Marques, and Rute Abreu
Abstract This chapter explains the Portuguese tax system for the Non-Profit Insti-
tutions (NPI or in Portuguese, ESNL), with an emphasis on the Private Institu-
tions of Social Solidarity (PISS or, in Portuguese, IPSS). By comparing the legislation
over time and space, the authors find that the current legislation of several Portuguese
tax codes is fragmented and that, besides a few individual legislations, no tax regime
concentrates on the various regiments, benefits and tax exemptions. A revision of
the legal instruments governing the tax regime of the NPI/PISS in Portugal is carried
out. These institutions assume various positions in the periodic tax relations within
the Tax Administration, as taxpayers of income, wealth and consumption, as well as
lenders of taxes and fees. The results show that NPI/PISS have a specific tax system
and that their ability to pay tax depends on their social purpose and their public
interest. Most institutions have fundraising drives or operate business activities, or
both, in order to generate income to carry out their philanthropic activities. The area
of NPI/PISS is complex due to the law and legislation. Although with the accurate
theoretical framework, this study is not sufficient to provide an empirical evidence of
the NPI/PISS tax system in Portugal. The chapter focus on the literature concerning
the systematization of the tax system for the NPI/PISS in Portugal, and how these
institutions can be proactive in their relationship with the Tax Administration. Thus,
the present chapter aims to provide an understanding of the Portuguese tax system for
the NPI/PISS, which will helpfully provide the international academic researchers
and the professionals with a reference study in order to help them making more
informed tax decisions.
Keywords Non-profit institutions · Tax system · Social responsibility · Portugal
F. David (B) · L. Marques · R. Abreu

Instituto Politécnico da Guarda, Guarda, Portugal
e-mail: sdavid@ipg.pt
https://doi.org/10.1007/978-981-15-6366-9_3
36 F. David et al.
3.1 Introduction
Although the Non-Profit Institutions (NPI or, in Portuguese, ESNL), in general,

and the Private Institutions of Social Solidarity (PISS or, in Portuguese, IPSS), in
particular, are governed by specific legislation and norms, they are not allowed to
have in their genesis the norms and regulations that regulate the generality of business
organizations in Portugal.
Under the Basic Law of the Social Economy (BLSE or, in Portuguese, LBES), the
State has given unequivocal relevance to the NPI, by providing, in law, the support
and valorization of the PISS and other entities of recognized public interest, non-
profitable, that pursue objectives of social solidarity. This is because of the fact that
the economic, social and cultural contribution of the NPI/PISS is widely recognized,
by promoting employment, reducing social exclusion and increasing the value of
support to the civil society where they are inserted.
The objective of this chapter is to explain the Portuguese tax system for the
NPI/PISS and compares several Portuguese tax codes, over the time and space,
knowing that the legislation is fragmented and that, besides a few individual norms,
no tax regime concentrates all the regiments, benefits and tax exemptions.
The methodology established was qualitative and descriptive, with a revision of
the legal instruments governing the tax regime of the NPI/PISS in Portugal (Marques,
David, & Martins, 2019). These institutions assume various positions in the periodic
tax relations within the Tax Administration, as taxpayers of income, wealth and
consumption, as well as lenders of taxes and fees.
Thus, the structure of chapter presents: in Sect. 3.2, the framework of NPI in
civil society, specifying these institutions that are included in the social economy.
In Sect. 3.3, considering the specific case of NPI/PISS, it will be presented the
historical context of these institutions. In Sect. 3.4, due to the specific characteristics
of NPI/PISS, it will be presented the fiscal context with several Portuguese taxes.
Finally, Sect. 3.5 argues the conclusions, taking as reference reflections conducted
by the authors due to their empirical experience.
3.2 The Framework of NPI in Civil Society
With the evolution of civil society, faced with the needs of personal and/or collective
fulfillment and the unpredictability and/or contingency of daily life of citizens, a
complex set of situations arises that managers of public interests do not always have
sensitivity or even conditions to solve with the efficiency and humanity required.
In this context, the Non-Profit Sector (NPS, or in Portuguese, SNL), or sector of
the social economy, emerges with increasing importance due to its volunteer base
or union of efforts to achieve the defined goals (Antão, Tavares, Marques, & Alves,
2012). These entities are not prevented from making a profit, provided that the funds
3 The Portuguese Tax System for Non-profit Institutions 37
obtained by the gainful activities are used to finance the main objectives of the same
(Pereira, David, & Marques, 2015).
According to Pereira et al. (2015: 3), the NPS is made:
(…) by a vast set of entities, diversified among themselves and organized under different
legal forms, one of the characteristics common to this type of entities is the development
of activities that pursue social well-being. In addition to being located between the public
and private sectors, it is in a position of complementarity, through the establishment of
partnerships, and even replacing the role of public authorities.
In this context, Article 4 of Law 30/2013, of May 8 (AR, 2013: 2727), which
approved the Basic Social Economy Law (BSEL or, in Portuguese, LBES), considers
that the following entities are part of the social economy, provided that they are
covered by the Portuguese legal system:
a) Cooperatives;
b) Mutual associations;
c) The mercies;
d) Foundations;
e) Private institutions of social solidarity not covered by the preceding paragraphs;
f) Associations with altruistic purposes that act in the cultural, recreational, sports and local
development; (…).
Under Article 2 (1) of the Cooperative Code, approved by Law 51/96, of

September 7 (AR, 1996: 3018), the cooperatives:
(…) are autonomous collective entities of free constitution, variable capital and composition,
which, through the cooperation and mutual aid of their members, in accordance with the
cooperative principles, are aimed at satisfying the economic, social and cultural needs and
aspirations of those.
In addition, pursuant to Article 61 (2) of the Portuguese Constitution (PC or, in

Portuguese, CRP—AR, 2005: 4652):
everyone is entitled to the free constitution of cooperatives, provided that the cooperative
principles are observed.
Meira (2009) argues that the concept of a cooperative is based on four distinct
characteristics, namely:
• The variability of social capital;
• The variability of the corporate composition;
• The specificity of the social object: the non-profit satisfaction of the economic,
social or cultural needs of the members; and
• The specificity of the ‘mode of management’, which is translated into obedience
to cooperative principles and mutual cooperation of the members themselves.
According to Leite (2012), cooperative principles are guiding principles through
which the cooperatives put into practice their values. These, according to Article
3 of the Cooperative Code (AR, 1996), integrate the declaration on the coopera-
tive identity adopted by the International Cooperative Alliance and are: voluntary
38 F. David et al.
and free membership; democratic management by members; economic participa-

tion of members; autonomy and dependence; education, training and information;
intercooperation; and interest in the community.
The cooperative sector comprises, according to Article 4 of the Cooperative
Code (AR, 1996), the following 12 sectors: consumption, commercialization, agri-
culture, credit, housing and construction, labour production, handicrafts, fisheries,
culture, services, education and social solidarity, for which complementary sectoral
legislation exists.
In accordance with Article 2 (2) of the Cooperative Code (AR, 1996), in pursuance
of their objectives, cooperatives may carry out operations with third parties, without
prejudice to any legally established limits for each branch. They may also, according
to Article 73 of the same Cooperative Code (AR, 1996), return to the cooperators
the net annual surpluses, except those arising from operations with third parties,
remaining, after the eventual payment of interest, on the equity instruments and the
reversals of the various reserves.
The mutual associations are defined in Articles 1 and 2 of Decree-Law 72/90, of
March 3 (MESS, 1990), which are expressed in the Mutual Association (MA) Code,
where it is considered that a PISS is an unlimited number of associates, indefinite
capital and indefinite duration that, essentially through the contribution of their asso-
ciates, practice, in the interests of these and their families, reciprocal aid purposes,
specifically:
• Provision of social security and health benefits to repair the consequences of the
verification of contingent events concerning the life and health of members and
their families and to prevent, wherever possible, verification of these facts;
• Other purposes of social protection and promotion of the quality of life, through the
organization and management of equipment and social support services, social
works and activities that aim especially at the moral, intellectual, cultural and
physical development of members and their families.
Later, the Regulations for Registration of Mutual Associations and Supplemen-
tary Social Security Foundations, approved by Ordinance 135/2007, of January 26
(MTSS, 2007), established the rules to be followed by the registration of mutual asso-
ciations, their unions, federations and confederations. In accordance with Article 16
of MA Code (MESS, 1990), these associations, registered under the terms of the law,
automatically acquire the nature of public corporations, with exemption from regis-
tration and other obligations provided for in the Statute for Public Utility Persons,
approved by Decree-Law 460/77, of 7 November (PCM, 1977). This is defined in
Article 1 (1), that states:
associations or foundations pursuing purposes of general interest, or the national community
or any region or circumscription, cooperate with the Central Administration or the local
administration in terms of deserving from the part of this administration the declaration of
«public utility» (PCM, 1977: 2656).
The mercies, registered under the law as PISS, aim at the pursuit of social
solidarity objectives enshrined in the Constitution itself. In these terms,
The Misericórdia Brothers or Santas Casas da Misericórdia are associations formed in the
canonical legal order with the purpose of satisfying social needs and practicing acts of
Catholic worship, in harmony with their traditional spirit, informed by the principles of
Christian doctrine and morals (MSESS, 2014: 5882(8)).
The foundations were established by the Civil Code, under the terms of Articles
185–194 (PGDL, 2019), and are rigid by the CRP in Articles 70, 73 and 165 (AR,
2005), and, in accordance with Article 185 (1) of the Civil Code:
(…) aim at the pursuit of social interest purposes, and may be instituted by act between
living or by will (PGDL, 2019).
In this sense, the foundations are:

(…) non-profit organizations established on the initiative of one or more individual or legal
persons (founders) for the management of an estate which is definitively assigned to them by
the founders and which must be substantially preserved for the fulfillment of certain social
interest purposes (CPF, 2012).
The concept of the foundation was clarified in Law 24/2012, of July 9 (AR, 2012),
which approved the Framework Law on Foundations, stipulating Article 4 of the same
norm that these can be of four types:
• Public, when created exclusively by public corporations;
• Public under private law, if created by public legal persons or with persons of
private law, as long as the former have dominant influence;
• Public–private, when created by public corporations and private individuals,
provided that the former does not have dominant influence; or
• Private, if created by one or more persons governed by private law.
Article 1 of the PISS Statute, approved by Decree-Law 119/83, of February
25 (MAS, 1983: 644), defines the Private Institutions of Social Solidarity as
institutions:
(…) constituted for non-profit purposes on the initiative of individuals with the purpose of
giving organized expression to the moral duty of solidarity and justice among individuals
that are not administered by the State or by an autarchic body (…).
According to the same article of the PISS Statute, these entities pursue, among
others, the following objectives:
• Support for children and young people;
• Family support;
• Protection of old age and disabled citizens in and in all situations of absence or
reduction of means of subsistence or of capacity for work;
• Promotion and protection of health, namely through the provision of preventive,
curative and rehabilitative care;
• Education and professional training of citizens; and
• Resolution of the housing problems of the populations.
40 F. David et al.
Table 3.1 PISS typologies

Associative Foundational
• Social solidarity associations • Foundations of social solidarity
• Associations of social action volunteers • Parish social centers and other institutes
• Mutual aid associations or mutual created by Institutions of the Catholic
associations Church or other religious Institutions, subject
• Brotherhoods of Mercy to the regime of social solidarity foundations
Source Adapted from MAS (1983)
In order to achieve these objectives, the State may conclude with the PISS, or
similar, “cooperation agreements”, through which it guarantees the direct concession
of equipment and services to the population (according to Article 4 (2) and Article
39 of the PISS—MAS, 1983), or “management agreements”, through which they
transfer the management of services and equipment belonging to the State (according
to Article 4 (3) of the PISS Statute—MAS, 1983). At the same time, PISS may take
the form of association and foundational form, as defined in Article 2 (1) of the PISS
Statute (MAS, 1983), whose particularities are presented in Table 3.1.
An association is, as a general rule, a legal person composed of an individual
and/or collective persons, without profit purposes, grouped around common objec-
tives and needs, and is, from its outset, assured in the CP (according to Article
46—AR, 2005) the freedom of their formation, enshrining the right of citizens to
freely establish associations, unless they are intended to promote violence and its
ends are contrary to criminal law. In short, in Portugal, there is a wide range of insti-
tutions within the legal framework of the NPI that it is important to support in fiscal
terms.
3.3 The Historical Context of the Piss
The BLSE, approved by Law 30/2013, of May 8 (AR, 2013), has reinforced the
promotion, encouragement and development of the social economy, as well as, of
the institution representation, listing in Article 10 (2) the role of public authorities
in complying with this development. With the approval of this Law, a reform of the
legislation applicable to social economy entities began.
As Meira (2013: 4) defends, the BLSE:
is assumed to be a general law, with very limited objectives highlighting the explicit insti-
tutional and juridical recognition of the social economy sector, which basically involves:
delimiting the subjective scope of its actors and the principles on which they are based; by
identifying the forms of organization and representation of the social economy; by defining
the broad lines of policies to promote the social economy; by identifying the ways in which
social economy entities interact with public authorities.
In this context, the historical evolution of the Statute and norms that governed the
PISS over the last years is reflected in Table 3.2.
Table 3.2 Historical evolution of PISS statutes/regulations
Source Prepared by authors
The Decree-Law 119/83, of February 25 (MAS, 1983: 643), which approved the
PISS Statute, states in its paragraph 1 that:
(…) it was proposed that the Government review the legislation in force and prepare a
new legal instrument containing the global regulations of private non-profit institutions that
propose solving social needs.
It also refers, in the same paragraph 1 (MAS, 1983: 643), that:

This decision was based on the need to avoid the inconveniences resulting from the excessive
delimitation of the specific objective of private institutions of social solidarity, as defined
in article 1 of the Statute approved by Decree-Law 519-G2/79, of 29 December, i.e. the
«objective of providing social security».
The “1st amendment to the PISS Statute”, through Decree-Law 9/85, of January
9 (MFPTSS, 1985: 38), states, in accordance with paragraph 2, that the PISS:
(…) enjoy the tax exemptions that the law establishes for legal persons of public utility,
which is fundamentally embodied in Decree-Law 260-D/81, of September 2.
This is reasonable since, paragraph 1 of the same Decree-Law (MFPTSS, 1985:

38) states that:
(…) these institutions, once registered under the terms of article 7, automatically acquire the
nature of legal persons of public utility.
In the same year, the Decree-Law 89/85, of April 1 (MTSS, 1985a: 876), in the
“2nd amendment to the PISS Statute”, mentions in paragraph 1 that:
42 F. David et al.
(…) private institutions of social security need authorization from the competent services,
in particular as regards the acts of acquiring immovable property for consideration and the
sale of immovable property on any basis.
Paragraph 2 of the normative said (MTSS, 1985a: 876) continues to mention that:
In view of the fact that the practice has shown that that provision has not been effective
and that, in any way, it impedes the private nature of the institutions, which, above all, it is
important to safeguard.
Later, the Decree-Law 402/85, of October 11 (MTSS, 1985b: 3359), proceeded

to its “3rd amendment to the PISS Statute” and included a number of fundamental
principles to be met by the register of institutions, that described in Article 11, in
particular:
The statutes of the institutions and their amendments do not need to take the form of a public
deed provided that their registration is carried out in accordance with the decree referred to
in article 7, paragraph 2.
That is, as referred to in Article 7 (2) as:

By order of the minister of guardianship will be regulated the organization and operation of
the registry (…) (MTSS, 1985b: 3359).
The following year, the Decree-Law 29/86, of February 19 (MTSS, 1986),

concerning its “4th Amendment to the PISS Statute”, amended Article 94 (2) of
Decree-Law 119/83, of February 25 (MAS, 1983), defined the period for reforming
the statutes of institutions qualified as public utility companies, and paragraph 2 was
replaced by the following wording:
(…) shall amend the statutes in accordance with the regime established in the present statute
within the period established by an ordinance of the Minister of Labor and Social Security
(MTSS, 1986: 443).
After almost 30 years, the Decree-Law 172-A/2014, of November 14 (MSESS,

2014: 5882(2)), proceeded to its “5th amendment to the PISS Statute”, referring to
paragraph 12 of the introductory note to this:
Despite the Statute of Private Institutions of Social Solidarity, approved in annex to Decree-
Law 119/83 of February 25, amended by Decrees 9/85 of January 9, 89/85, of 1 April, 402/85,
of October 11 and 29/86 of February 19, to maintain essentially what is at hand, it is important
to recognize that the new social and organizational realities require the reformulation of some
of its provisions and introduction of others, so as to provide the institutions thus qualified
with a legal basis for furthering their modernization and development.
That is to say, the aforementioned diploma has formally empowered the social
economy entities with the necessary instruments to develop a set of initiatives, asso-
ciated with those traditionally developed by these institutions, enabling them to
innovate, strengthen and boost their growth and thus strengthen social cohesion in
the country.
Following the development of the principles enunciated in Law 30/2013, of May 8
(AR, 2013), called the “Basic Law of the Social Economy”, Decree-Law 172-A/2014,
of November 14 (MSESS, 2014), revisited the definition of PISS, highlighting the

fact that its action should be guided by compliance with the guiding principles of the
social economy, namely the ones referred in paragraphs 13–18:
• In the clear separation between the main purposes and the instruments of the
institutions;
• More effective control of the heads of administrative and supervisory bodies in
the institutions;
• Limiting the mandates of their presidents (or similar posts);
• Accountability of the management body for possible poor management, with the
possibility of exemption;
• The introduction of clearer rules for the achievement of financial and budgetary
autonomy and the consequent technical and financial balance of the entities.
For this purpose, Article 1 of Ordinance 196-A/2015, of July 1 (MSESS, 2015),
defends that:
The present decree defines the criteria, rules and forms on which the specific model of
cooperation established between the Institute of Social Security, I.P. (ISS, I.P.) And private
institutions of social solidarity (…) for the development of social responses in accordance
with the subsystem of social action.
This model of action will take into account the specificities in the field of Social
Security, also integrating a dispersed matter in technical regulations, namely with
regard to family reimbursements and cooperation agreements with the Social Security
Institute.
Finally, the Law 76/2015, of July 28 (AR, 2015a), approved its “6th Amendment
to the PISS Statute”, establishing Article 5 (4), where it was required that all PISS
have to adapt their statutes to the provisions and approved by Decree-Law 119/83,
within 12 months, of February 25 (MAS, 1983), incorporating all the previously
stated amendments.
Its further states that the failure to comply with this obligation may lead the
Institutions to lose the quality of PISS and thus not be able to obtain, from the State
and its Organisms, the financial necessary and indispensable support to the good
performance of the social purposes for which these entities are vocational.
3.4 The Fiscal Context of the Piss
The NPI are entities of private initiative that act in the pursuit of ends that often are
of a public nature or utility. With their own governance models, they are accountable
to public agencies in the scope of their activities, mainly of social and humanitarian
nature (Pereira et al., 2015). For this, the tax treatment has several particularities, and
its contributory capacity is defined according to the social purposes to which they
are dedicated and of their public interest.
44 F. David et al.
Thus, the NPI, during its legal existence, interacts in various ways with various
taxes, namely, as Amaral says (2013):
(a) When they are constituted, as regards, fundamentally, the taxation of the
patrimony with which they are instituted;
(b) Throughout their existence and in the course of their activities, either by taxing
the income they obtain and the assets they hold or by participating in the taxation
of consumption; and
(c) In the capacity of organizations receiving gifts under patronage.
It should be noted that many of the benefits and tax exemptions that these entities
enjoy, as well as the benefits that they can impute to others with whom they relate,
in particular the patrons who donate, suffer from recognition by the State, through
obtaining the “Public Utility Statute”.
The various tax matters related to the NPI are divided into different tax codes
and legislation, and there is no specific tax regime or diploma that concentrates the
different tax regimes, benefits and exemptions. Thus, the NPI take various positions
in periodic tax relations:
• As taxpayers:
– income: Corporate Income Tax (CIT or, in Portuguese, IRC);
– patrimony: Municipal Property Tax (MPT or, in Portuguese, IMI) and
Municipal Tax on Property Transfer (MTPT or, in Portuguese, IMT);
– consumption: Value Added Tax (VAT or, in Portuguese, IVA);
– the vehicles: Vehicles Tax (VT or, in Portuguese, ISV) and Single Transit Tax
(STT or, in Portuguese, IUC);
• As VAT debtors; and
• As creditors of Individual Income Tax (IIT or, in Portuguese, IRS) and Single
Social Fee (SSF or, in Portuguese, TSU) in favour of Social Security.
Corporate Income Tax

The CIT applies to all collective persons, regardless of their profit-making purposes,
as well as cooperatives, public companies and other collective persons of public
or private law, that have their head office or (place of) effective management
in Portuguese territory, as described in Article 2 (1) (a) and (b) of the CIT
Code (AT, 2019a).
Thus, the NPI are also taxable persons of CIT and, as such, must file a
“Declaration of commencement of activity”, even in cases where they are exempt
from this tax, as mentioned in Article 118 (1) of the CIT Code (AT, 2019a).
In terms of Tax basis, the CIT Code (AT, 2019a) distinguishes two essential types
of collective persons, depending on their nature:
• Those principally engaged in commercial, industrial or agricultural activities,
which are taxed by profit and equity variations, according to items a) and d) of
Article 3 (1) of the CIT Code;
• Those that do not carry out these activities as their principal activity, which are
taxed by their total income, in accordance with Article 53 of the CIT Code, as
reported by Article 3 (1) (b) of the CIT Code.
In view of the above, the NPI is included in the second group, being, like the
other entities resident in the Portuguese territory, subject to a rate of 21% of CIT, in
accordance with Article 87 (1) of the CIT Code (AT, 2019a). However, PISS or other
similar entities, benefit from a privileged tax regime, which translates, in practice,
into an exemption from taxation, in accordance with Article 10 (b) and (c) of the
CIT Code (AT, 2019a). Whatsoever, this exemption does not cover income derived
from the exercise of commercial or industrial activities carried out outside the scope
of statutory purposes, as referred to in Article 10 (3) of the CIT Code (AT, 2019a).
Nevertheless, regarding the declaratory obligations, even if they are entities to
which the exemption was granted, under the terms of Articles 10 and 11 of the CIT
Code (AT, 2019a), these entities have to comply with certain reporting obligations,
namely those indicated in Article 117 (1) of the CIT Code (AT, 2019a):
a) A declaration of registration, changes or cessation, in accordance with articles 118 and
119;
b) A periodic declaration of income, in accordance with article 120;
c) An annual statement of accounting and fiscal information, in accordance with article
121.
The NPI, and specifically the PISS, since they are exempted under Articles 10 and
11 of the CIT Code (AT, 2019a), are exempt from this exemption and must, therefore,
file the CIT Model 22. In the case of exempt income, they are obliged to submit
the “Model 22 Annex D”, which is intended to mention the net income covered by
exemptions and, if not considered, income deemed not to be subject.
The deadline (normal period) of delivery of the annual income tax return—Model
22—shall run until May 31 of the year following that to which the income relates,
whether it is a business day or not, as provided for in Article 120 (1) of the CIT Code
(AT, 2019a). The tax due, by the NPI that are obliged to send the Model 22, must
be paid until the last day of the deadline established for this purpose, according to
Article 108 of the CIT Code (AT, 2019a).
Article 117 of the CIT Code (AT, 2019a), as well as Article 29 of the VAT Code
(AT, 2019c), provides the submission, by entities that do not carry out, primarily,
activities of a commercial, industrial or agricultural nature, of the Annual Statement
of Accounting and Fiscal Information—Simplified Business Information (SBI
or, in Portuguese, IES), comprising by Face Sheet and Annexes D, L, O and P.
This information must be electronically submitted, by July 15 of each year, being a
business day or not, as indicated in Article 121 (2) of the CIT Code (AT, 2019a).
The “Annex D of the SBI” must be delivered by resident entities that do not
primarily carry out activities of a commercial, industrial or agricultural nature,
provided that they obtain taxable and non-exempt income, in order to determine
the taxable amount to be included in Model 22.
46 F. David et al.
The “Annex L of the SBI” must be submitted by all taxable person’s subject to it,
in agreement with what is stated in Article 29 (1) d) of the VAT Code (AT, 2019c),
i.e., whenever the NPI has a complementary activity subject to VAT.
These entities must also present a summary of Customers (Annex I of the SBI) and
a summary of Suppliers (Annex P of the IES), in the previous year taxable operations
and internal operations carried out in each one of them, with a total value, equal to
or greater than e 25,000, as provided in points e) and f), respectively, of Article 29
(1) of the VAT Code (AT, 2019c).
On the other hand, it is important to note that the “Statute of Patronage”, approved
by Decree-Law 74/99 of March 16 (MF, 1999), came to define the regime of tax
incentives in the ambit of social, environmental, cultural, scientific or technological
and sports sponsorship. Currently inserted in the Statute of Tax Benefits (STB or,
in Portuguese, EBF) (AT, 2019d), this Statute makes it possible for taxpayers of
CIT/IIT, to consider the donations granted to various entities as tax expenses.
Specifically, Article 2 (1) of Decree-Law 74/99, of March 16 (MF, 1999: 1431),
refers to the costs or losses of the year as donations to the following entities:
a) Particular institutions of social solidarity, as well as legal persons assimilated legally;
b) Legal persons of public administrative utility and of mere public utility that pursue
purposes of charity, assistance, charity and social solidarity and cooperatives of social
solidarity;(…).
Also, in paragraph 3 of the same article (MF, 1999: 1431), it is expressed that:
The donations referred to in the preceding paragraphs are charged to costs corresponding to
130% of their total or to 140% if they are intended to cover the following measures:
a) Child or elderly care;(…)
That is, the entities that grant donations to the NPI, in this case the PISS, benefit
fiscally from these deliveries.
Also, Article 54 of the CIT Code (AT, 2019a) states that:
3 - Amounts subscribed for shares by the members in accordance with the statutes, as well
as grants to finance the attainment of the corporate objects are considered to be income not
subject to IRC.
4 - Accretions to net worth received free of charge are considered exempt income where
they are applied towards the direct and immediate furtherance of the corporate objects.
Individual Income Tax

Although NPI are not subject to IIT, this tax states the rules which are used to
determine the overall income under the CIT Code. That is, these entities are taxed in
accordance with the provisions of Article 53 of the CIT Code (AR, 2019a), i.e., by
the algebraic sum of the income of the categories foreseen for IIT purposes, as well
as of the patrimonial increases obtained in free title to principal title. However, some
obligations remain with respect to withholding tax and ancillary obligations arising
from the payment of income subject to IIT.
Article 99 (1) of the IIT Code (AT, 2019b) defends that entities that are dependent
on income from work:
(…) are required to withhold tax when they are paid or made available to their holders (…)
Also, Article 101 (1) of the IIT Code (AT, 2019b) states that entities which have,
or need, to have organized accounts are required to withhold tax by applying a tax
(referred to in the following paragraphs of that same number) to gross income paid
or disposed of available to other categories, that they are obligors.
According to Article 97 (1) of the IIT Code (AT, 2019b):
The IIT must be paid in the year following that to which the income (…)
For paragraph 3 of the same Article (AT, 2019b) to mention that:

The sums actually withheld or paid pursuant to articles 98 to 102 shall be deducted from the
amount of tax for the year in which the withholding or payment occurred.
In this sense, Article 1 of the IIT Code (AT, 2019b) mentions that income subject
to withholding tax is as follows:
• Income from dependent work—Category A;
• Business and professional income—Category B;
• Capital Income—Category E;
• Real estate income—Category F; and
• Pensions—Category H.
Article 98 (1) of the IIT Code (AT, 2019b) considers that:
In the cases provided for in articles 99 to 101 and in others established by law, the entity
liable for income subject to withholding tax (…), are obliged, at the time of payment (…),
to deduct the corresponding amounts to the application of the rates set out therein for the tax
for the year in which those acts occur.
Furthermore, Article 3 (3) (AT, 2019b), alludes that:

The amounts withheld pursuant to articles 99 to 101 shall be delivered by the 20th day of
the month following that in which they were deducted.
In order to proceed with the delivery of the retained amounts, taxpayers must
access the Tax and Customs Authority (TCA or, in Portuguese, AT) e-portal and file
their IIT/CIT withholding tax Declaration and Stamp Duty (if applicable). At the
end of the submission of the Declaration, a Payment Guide is issued with the values
entered, separated by types of income categories.
In addition to the withholding tax, the NPI will also have to submit, until January
31 (or the following business day), the CIT/IIT Model 10 tax return for the previous
year, as stipulated in letter c) of Article 119 of the IIT Code (AT, 2019b). This
declaration aims to declare the income subject to tax that was not declared in the
Monthly Statement of Remuneration (MSR or, in Portuguese, DMR), received by
taxpayers of IIT resident in the Portuguese territory, as well as their withholding
taxes. It is also intended to declare income subject to withholding tax, excluding those
exempts from it, in accordance with Articles 94 and 97 of the CIT Code (AT, 2019a).
With the approval of the Law of Religious Freedom, through Law 16/2001 of June
22 (AR, 2001), a new source of PISS funding was established. Thus, the process
48 F. David et al.
of assigning 0.5% of the IIT paid in favor of the Church or PISS was created.
This process consists in the assignment of a quota equivalent to 0.5% of the IIT paid
based on the annual declarations of income, which will be destined by the taxpayer for
religious or charitable purposes, to a church, religious community, public corporation
charitable, humanitarian, or PISS purposes, which will indicate it in your income
statement.
However, in order for this mechanism to work, it is necessary for the PISS to
require this tax benefit under the provisions of Ordinance 80/2003 of January 22
(MF, 2003), which establishes the procedures to be followed by entities that, under
Article 32 (6) of Law 16/2001, of June 22 (AR, 2001), require the assignment of a
portion of the IIT paid.
Value Added Tax
VAT is a general consumption tax, which applies to all stages of the economic circuit,
where the tax base is limited to value-added at each stage. This tax tends to be neutral,
i.e., it does not charge for transfers due to the settlement and deduction mechanism.
Only the end consumer is taxed as he cannot deduct it.
In accordance with Article 1 (1) of the VAT Code (AT, 2019c), in normal VAT
transactions, the following are subject to tax: the transfer of goods and services
performed for consideration; the importation of goods; and intra-Community acqui-
sitions of goods and services. Article 2 (1) of the VAT Code (AT, 2019c) states that
VAT is subject to individual or legal persons who carry on economic activity or who,
by performing a single taxable transaction, that operation fulfills the assumptions of
the real incidence of IIT or CIT.
The VAT rates provided in Article 18 (1) of the VAT Code (AT, 2019c) are as
follows:
• Reduced rate—6% (4% in the Azores and 5% in Madeira), for taxed goods and
services listed in the VAT Code List I;
• Intermediate rate—13% (9% in the Azores and 12% in Madeira), for taxed goods
and services listed in the VAT Code List II; and
• General rate—23% (18% in the Azores and 22% in Madeira), for the remaining
goods and services.
As mentioned in Article 1 (1) of the VAT Code (AT, 2019c), the transfer of
goods which are in Portuguese territory at the time of transport to the acquirer or in
Portuguese territory at the time the goods are made available to it are subject to VAT
in Portugal.
The NPI, as consumers, do not benefit from any special VAT regime and are
subject to the tax rates provided for in the legislation in force at any given time.
As service providers, NPI may benefit from the exemption scheme provided for in
Article 9 of the VAT Code (AT, 2019c), in relation to the services carried out in the
framework of VAT-free transactions, namely those described in paragraph 7 of that
article (AT, 2019c), i.e.:
The provision of services and the transfer of closely related goods, carried out in the course of
their normal activity by (…) residential homes, (…), nursing homes, day care centers (…) or
other social facilities belonging to legal persons of public law or private institutions of social
solidarity or whose social utility is in any case recognized by the competent authorities, even
if the services are provided outside their premises.
Also, Article 9 (6) of the VAT Code (AT, 2019c) considers that are exempt from
tax:
Transfers of goods and services related to social security and assistance (…) including private
institutions of social welfare.
As well as Article 9 (19) of the VAT Code (AT, 2019c) states that are exempt from
tax:
The supply of goods and services related to the collective interest of their associates by
non-profit organizations, provided that such bodies pursue political, trade union, religious,
humanitarian, philanthropic, recreational, sporting, cultural, civic objectives representation
of economic interests and the only consideration is a quota fixed in accordance with the
Statutes;
These exemptions, although objective, incorporate a subjective component,

notably when they require these activities to be provided by non-profit institutions
and/or private institutions of social solidarity as defined in Article 10 of the VAT
Code (AT, 2019c), i.e., that simultaneously:
a) Under no circumstances distribute profits and their management bodies have no direct
or indirect interest in the results of the exploitation by themselves or any other person;
b) Have bookkeeping covering all their activities and making it available to the tax office
(…);
c) Charge prices approved by public authorities (…);
d) Do not compete directly with taxpayers.
Even where entities fall under a mixed regime, i.e., a “normal regime” and an
“exemption regime”, pursuant to Article 20 of the VAT Code (AT, 2019c), the entity
shall define the method to be used for deduction of tax paid: the “pro-rata” or the
“total allocation”. How is determined the tax deduction is defined in Article 23 of
the VAT Code (AT, 2019c).
Thus, in the “pro-rata” method, as defined in Article 23 (1) of the VAT Code (AT,
2019c), the deduction of input tax is determined as follows:
a) In the case of a good or service related to the carrying out of operations arising from the
exercise of an economic activity (…), part of which does not confer the right to deduct, the
tax is deductible in the percentage corresponding to the annual amount of the transactions
that give rise to the deduction.
In the “total allocation” method as defined in Article 23 (2) of the VAT Code
(AT, 2019c):
the taxable person may deduct according to the actual allocation of all or part of the goods
and services used, based on objective criteria that determine the extent to which those goods
and services are used in deductible and non-deductible transactions.
50 F. David et al.
In the case of the private institutions of social solidarity, according to the provi-
sions of Decree-Law 91/2009, of April 9 (MTSS, 2009), and successive amend-
ments, namely those derived from Law 159-C/2015 of December 30 (AR, 2015b),
which extended the revenue provided for in the State Budget for 2015, may in some
situations claim VAT refunds on a certain transaction.
Thus, according to Article 2 of that Law (AR, 2015b), 50% of the VAT paid on the
following transactions may be refunded to the private institutions of social solidarity:
(a) Acquisition of goods or services related to the construction, maintenance and
conservation of real estate used wholly or mainly in pursuit of their statutory
purposes, provided that they are included in invoices of not less than e 997.60,
excluding VAT;
(b) Acquisition of goods or services related to items of Tangible Assets subject
to decay used solely and exclusively in the pursuit of their statutory purposes,
except for vehicles and their repairs, provided that they are included in invoices
of not less than e 99.76; excluding VAT and whose overall value during the
year is not more than e 9,975.96 excluding VAT.
Also, the same Law, as regards the VAT of food and beverages, provides in Article
7 (3) that:
During 2016, an amount equivalent to 50% of the VAT paid by the private institutions of
social welfare, as well as by the Santa Casa da Misericórdia de Lisboa, is also refunded in
relation to the purchase of food and beverage goods or services in the scope of the developed
social activities, in accordance with paragraph 1, with appropriate adaptations. (AR, 2015b:
10006(5)).
Therefore, according to the referred diploma, the private institutions of social

solidarity were able to request before the Tax Administration the refund of 50% of
the VAT related to the purchase of goods or services of food and beverages, as long
as they are acquired within the scope of their social activities.
As regards VAT-related reporting obligations, they are provided for in Article 29
of the VAT Code (AT, 2019c), in particular:
• Declaration of Initiation, change or cessation of VAT activity, pursuant to Articles
31, 32 and 33 of the VAT Code;
• Periodic VAT declaration, pursuant to Article 41 of the VAT Code, whenever there
is an accessory activity subject to VAT;
• Annual statement of accounting and tax information pursuant to Article 29 (1)
(d) of the VAT Code and related to Article 121 of the CIT Code (AT, 2019a).
Municipal Property Tax

The MPT is levied on the Tax Asset Value (TAV or, in Portuguese, VPT) of rustic
and urban buildings located in the Portuguese territory, that is, on the value of the
buildings for tax purposes, determined pursuant to Article 1 of the MPT Code (AT,
2019e).
This tax is due by the owner of the building on December 31 of the year to which
it complies, pursuant to Article 8 (1) of the MPT Code (AT, 2019e), or in the case of
usufruct or surface rights, the tax shall be due by the usufructuary or the surface after
the beginning of the construction of the work or the end of the planting, as referred
to in Article 8 (2) of the MPT Code (AT, 2019e).
According to Article 44 (2) (f) of the SBT (AT, 2019d), the following cases are
exempt from MPT:
The private institutions of social solidarity and legal persons similar to them, in respect of
buildings or parts of buildings intended directly for the fulfillment of their purposes, except
for mercies, in which case the benefit covers any property owned by them;
Recognition of exemptions to the above-mentioned entities (private institu-

tions of social solidarity and their equivalent) is unofficial, provided that the regis-
tration is effected in the head office on behalf of the beneficiary entities and that the
buildings are intended directly for the fulfillment of their purposes and proof of their
legal nature as provided for in Article 44 (4) of the STB (AT, 2019d).
According to paragraph 8 of the previous article (AT, 2019d), in the case of NPI,
the exemption is recognized by the head of the building situation finance department,
in a duly documented application, which must be submitted to the building situation
finance department, within 60 days of verifying the fact determining the exemption.
Accordingly, the private institutions of social solidarity, as well as the other public
and administrative utilities, are exempt from MPT in respect of buildings or parts
of buildings intended directly for the fulfillment of their purposes, and as regards
Mercies, the benefit covers any property owned by them.
Municipal Tax on Property Transfer
Article 2 (1) of the MTPT Code (AT, 2019f) states that the MTPT covers all trans-
fers, for consideration, of the right of ownership or partial figures of that right, to
immovable property located in Portugal. Article 4 of the same MTPT Code (AT,
2019f) states that this tax is due by the individual or legal persons to whom the real
estate is transferred.
The tax base is, as a rule, the value contained in the act or contract or on the
taxable equity value of the properties, whichever is greater, as referred to in Article
12 (1) of the MTPT code (AT, 2019f).
However, the IMT Code enshrines in Article 6 (2) (e) (AT, 2019f) that the following
are exempt from MTPT:
The private institutions of social solidarity and entities legally equivalent to them, as to the
assets destined, directly and immediately, for the accomplishment of their statutory purposes.;
However, (with the exception of cooperatives) this type of exemption is previously

recognized by order of the Director-General of Taxes, upon request to be submitted
prior to the act or contract that gave rise to the transfer, pursuant to Article 10 of the
MTPT Code (AT, 2019f).
These exemptions are conditional in nature, meaning that they are in force as long
as the assets are concerned with the direct and immediate realization of statutory
purposes, and they cease upon disposal or assignment to other destinations without
52 F. David et al.
the prior consent of the Minister of Finance, in accordance with Article 11 (1) of the
MTPT Code (AT, 2019f).
Vehicles Tax
According to Article 52 (1) of the Vehicles Tax (VT or, in Portuguese, ISV) Code
(AT, 2019g), are exempt from tax the vehicles for public transport with a capacity of
nine seats including the driver, acquired free of charge or by PISS and intended for
transport in activities of public interest and which are appropriate to their nature and
purposes.
This exemption is recognized upon request addressed to the AT submitted until
the order for home use, accompanied by an updated document confirming the legal
status of the institution and the document proving the acquisition, as referred to in
Article 52 (2) of the VT Code (AT, 2019g).
Also, paragraph 3 of the same Article 52 (AT, 2019g) states that vehicles must
identify, in a visible and permanent place (side and/or rear), the identification of the
beneficiary entity. This may not be smaller than the vehicle’s registration.
The beneficiaries of tax exemptions may not dispose, for consideration or free
of charge, of renting or lending the exempted car before the expiry of the 12-month
period from the date of the Portuguese registration, and otherwise the full tax assess-
ment and criminal or administrative liability in accordance with Article 47 (1) of the
VT Code (AT, 2019g).
In the case provided in Article 58 (change of residence), the taxable person
shall maintain his permanent residence on Portuguese territory for a minimum of
12 months, in accordance with Article 47 (2) of the VT Code (AT, 2019g).
Single Transit Tax
Article 3 (1) of the Single Transit Tax (STT or, in Portuguese, IUC) Code (AT, 2019h)
defends that:
they are taxable persons owners of vehicles, considering how such individual or legal persons,
public or private, on behalf of which they are registered.
According to the STT Code (AT, 2019h):

• This tax must be paid annually (Article 4 (1));
• It begins on the date of registration or on each of its birthdays in vehicles of
categories A, B, C, D and E and in the calendar year in vehicles of categories F
and G (Article 4 (2));
• The tax (Categories A, B, C, D and E) is due until the cancellation of registration
made by discontinuation under the terms of the law (Article 4 (3)).
However, according to Article 5 (2) of the STT Code (AT, 2019h), they are still
exempt from tax:
b) Private institutions of social solidarity (…)
In addition, Article 5 (6) of the STT Code (AT, 2019h) states that:
The exemption provided for in paragraph 2 (b) shall be recognized by order of the Director
General of Taxes on the duly documented request of interested parties.
Single Social Fee

Article 63 (1) of the PC (AR, 2005: 4652) states that:
Everyone has the right to social security.
And in paragraph 2 of the same Article (AR, 2005: 4652):

The State is responsible for organizing, coordinating and subsidizing a unified and decen-
tralized social security system, with the participation of trade unions, other workers’
organizations and associations representing other beneficiaries.
Also, paragraph 4 of the same article (AR, 2005: 4652) states that:
All working time, under the law, contributes to the calculation of old-age and invalidity
pensions, regardless of the sector of activity in which they were provided.
In the case of PISS, the PC considers in Article 63 (5) (AR, 2005: 4652) that:
The State supports and supervises, under the terms of the law, the activity and functioning
of private institutions of social solidarity and those of recognized non-profit public interest,
with a view to the pursuit of social solidarity objectives, (…)
The Social Security Contribution Regimes Code, approved by Law 110/2009, of

September 16 (AR, 2009b), with the wording given by Law 119/2009, of December
30 (AR, 2009c) and subsequent amendments/rectifications, came to regulate the
various social security schemes, formerly scattered by various statutes.
With regards to employees (dependents), Article 5 of the Social Security Contri-
bution Regimes Code (DGSS, 2019) states that the general scheme for employees
applies to workers bound by an individual employment contract as defined in Article
11 of the Labor Code, approved by Law 7/2009 of February 12 (AR, 2009a).
In addition, Article 11 (2) of the Social Security Contribution Regimes Code
(DGSS, 2019: 12) states that:
the contributions are the responsibility of employers, self-employed persons, contracting
entities and beneficiaries of voluntary social insurance, as appropriate, and contributions are
the responsibility of employees, as provided for in this Code.
In other words, the NPI/PISS, as employers, are required to submit by the 10th
of the month following the Remuneration Statement referred to in Article 40 of the
Social Security Contribution Regimes Code (DGSS, 2019), where, for each worker,
not only the amount of the (total) remuneration which constitutes the contributory
base but also the working time and the TSU.
According to Article 53 of the Social Security Contribution Regimes Code (DGSS,
2019), the overall contribution rate of the general scheme is 34.75%, with 23.75%
for the organization and 11% for the employee. However, Article 56 (1) of the Social
Security Contribution Regimes Code (DGSS, 2019: 23) considers that:
54 F. David et al.
The setting of more favorable contribution rates than that laid down in article 53 results
in a reduction in the overall contribution rate in the part attributable to the employer, the
employee or both, depending on the interest to be protected and depends on the verification
of one of the following situations:
(…);
b) Continuation of activities by non-profit organizations;
Thus, Table 3.3 shows the different rates applied to employees in 2019, in Portugal,
according to the different types of workers, that is, depending on the situation for
work and the sector of activity.
With regard to self-employed, Article 132 of the Social Security Contribu-
tion Regimes Code (DGSS, 2019: 41) states that:
The self-employed persons are compulsorily covered by the individual persons who perform a
professional activity without being subject to a contract of employment or a legally equivalent
contract, or are obliged to render to others the result of their activity, and who are not covered
by the social security scheme for employees.
Thus, service providers who have had a contractual relationship with an NPI/PISS
are covered by the self-employed scheme, i.e. they fall within the group referred
to in Article 133 (1) (a) of the Social Security Contribution Regimes Code (DGSS,
2019: 41):
Table 3.3 Social security contributory fees, 2019

Description Employee Organization
Employees (in general) 11% 23.75%
Statutory board members (in general) 9.3% 20.3%
Statutory board members (manager functions) 11% 23.75%
Students in school holidays 0% 26,1%
Handicapped with undetermined term labour contract 11% 11.9%
Employees of NPI/PISS 11% 22.3%
Employees in the early-retirement period, whose agreement foresees
(1) Suspension of the performance of work 8.6% 18.3%
(2) Reduction of the performance of work Remain with the fixed rate at the
time of the early-retirement
Pensioners in employed activity
(1) Old Age 7.8% 17.5%
Performing public functions 7.5% 16.4%
Without performing public functions
(2) Invalidity 9.2% 20.4%
Performing public functions 8.9% 19.3%
Without performing public functions
Self-employed 21.4% 7%
25.2% 10%
Source Adaptation of DGSS (2019: 10)
Individuals who are self-employed generating income as referred to in articles 3 and 4 of

the Individual Income Tax Code;
Despite being referred to in Article 140 (1) of the Social Security Contribu-
tion Regimes Code (DGSS,2019: 43) as:
Legal persons and individual persons with business activities, whatever their nature and the
purposes pursued, who in the same calendar year benefit from more than 50% of the total
value of self-employed activity are covered by this scheme as contracting entities.
In accordance with Article 168 (7) of the Social Security Contribution Regimes
Code (DGSS, 2019), the contribution rate to be borne by the contracting entities shall
be as follows:
(a) 10% in situations where economic dependence is greater than 80%; and
(b) 7% in other situations.
3.5 Conclusions
In recent years, policymakers have recognized the growing economic, social and
cultural importance of the NPI/PISS in the society that is undergoing crucial times
of transformation in the face of the insecurity and uncertainty of the national and
international context. As so, in order to incentive positive discrimination in taxation,
grant exemptions from various taxes are conceded, namely the CIT and VAT.
Thus, non-profit institutions, which per definition do not primarily engage in a
commercial, industrial or agricultural activity, are subject to corporate income tax.
However, not all income obtained by these institutions is subject to CIT taxation and
is therefore excluded from the scope of the tax, in compliance with Article 54 (3)
of the CIT Code (AT, 2019a), the dues paid by the members, in accordance with
the bylaws, as well as the subsidies intended to finance the accomplishment of the
statutory purposes, which are considered income not subject to CIT. In the same way,
the equity increases obtained free of charge for the direct and immediate realization of
the statutory purposes are considered exempt income, in accordance with paragraph
4 of the same article (AT, 2019a).
Also, as consumers of goods and services, NPI/PISS do not benefit from any
special VAT regime, subject to the tax rates provided for in the respective Code.
However, as service providers, these entities may benefit from an exemption scheme
for services performed in the course of certain activities. In addition, and in the
specific case of PISS, they may, in some situations, claim a refund of input VAT.
In a global interconnected society, international knowledge of the Portuguese tax
system for the NPI/PISS is fundamental to provide researchers and professionals the
ability to study, work, and management with a strong and coherent background. This
chapter exposes and explains the Portuguese tax system and compares it with the
reality of other countries, namely the European Union, opening excellent discussion
for other opportunities into the future in this area of research.
56 F. David et al.
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Chapter 4
Environmental Accounting: A Case
Study of Implementation in Brazilian
Public Airports
Iris Cristina Ferreira da Silva, Fued Abrão Junior,

and José Maria Dias Filho
Abstract Environmental issues, a relevant topic today, have led accountants and
business managers to consider them in management and accounting systems. Airport
activities cause several environmental impacts; therefore, a management and control
structure is needed to minimize the impact of airport activity on nature. This paper
discusses the implementation of environmental accounting at the Brazilian Airport
Infrastructure Company (Infraero), to evaluate the benefits of environmental manage-
ment and show that environmental accounting helps managers to make decisions and
adopt sustainable actions. Delimiting the theme, specifically for an airport adminis-
trator, it was sought to identify its sustainable activities, to know the environmental
assets and liabilities, as well as the investments, costs, and expenses resulting from
actions that involve the prevention, control, and recovery of the environment. In
addition, we have verified the environmental information disclosed by the company
in the last 5 years in its annual reports. The results obtained show that the company
targeted by this study has been increasing its concern about the environment every
year. This can be verified in ten programs covering the main topics of interest of
airport administration in the areas of sustainability and compliance with environ-
mental legislation and that environmental accounting can be an internal control tool
to measure environmental spending and contribute to sustainable business strategies
to gain a competitive advantage.
Keywords Environmental accounting · Airports · Environmental disclosure ·

Management and control
I. C. F. da Silva (B) · J. M. D. Filho

PPGCONT, Federal University of Bahia (UFBA), Salvador, Brazil
e-mail: iriscfs@hotmail.com
F. A. Junior
Brazilian Airport Infrastructure Company (Infraero), Brasília, Brazil
https://doi.org/10.1007/978-981-15-6366-9_4
60 I. C. F. da Silva et al.
4.1 Introduction
Sustainable development, a relevant topic today, has influenced companies to show

their concern about the impact of their activities on the environment.
Companies are under increasing pressure to demonstrate adequate performance
in the environmental field, with social responsibility being one of the mechanisms by
which they seek to satisfy this requirement, and that corporate environmental disclo-
sure is an important way for the management to influence the company’s external
perceptions. (Da Silva, de Macena Araújo, & da Silva Santos 2018).
In the context of the modern economy and the role of the corporation in modern
society, the concept of sustainability and corporate social responsibility (CSR) takes
a special role. Organizations are encouraged by stakeholders to embrace a more
holistic social behavior and balance between the need for profitability and need to
contribute to local community, social equity, and environmental protection (Markota,
Omazić, & Aleksić 2018).
According to Stahel (2010), discussing sustainable development is an urgent issue
and requires special attention and commitment from the whole society; since in
the last decades, the economy of several industrialized countries has as its main
characteristics the combination of high resource consumption. These results in the
consequent generation of waste, leading to increased public debt, often accompanied
by persistent unemployment and very slow economic growth.
Bertoli and Ribeiro (2006) explain that the inclusion of environmental information
in the financial statements reflects, for users of the statements, the concern of compa-
nies with social aspects and their position in relation to the environment. According
to the authors, when adopting this conduct, there will be reflexes on the image of the
organization and its patrimonial situation.
Concern about environmental issues is growing and involves debates at various
levels of society. In the airport operation, it is no different; airports are more than a
take-off and landing infrastructure. They are also important integration equipment,
large resource consumers, and drivers of urban and regional development. Thus,
several environmental activities are required for its full operation, such as compliance
with legislation, solid and liquid waste management, noise monitoring, maintenance
of green areas, and others. (Junior & Aguiar 2015).
The adoption of environmental policies, in contrast to a financial disadvantage,
has become an important competitive differential. Accounting can be an important
instrument in the mensuration and disclosure of the effects of costs and revenues
resulting from the adoption of sustainable investments in the entities’ results and
equity. (Guimarães 2014).
Thus, the following question emerges that guides this research: Is the adop-
tion of environmental accounting important to adequately measure and evidence
environmental activities in airports?
This paper investigates the implementation of environmental accounting at the
Brazilian Airport Infrastructure Company (Infraero). Aiming to evaluate the benefits
4 Environmental Accounting: A Case Study of Implementation… 61
of disclosure and measurement of environmental activities and show that environ-

mental accounting helps managers in making decisions for adopting sustainable
actions.
After the introduction, the article provides an overview of environmental
accounting and the importance of its implementation by companies, as well as a
brief presentation of the researched company. After the theoretical part, the case
study and the methodology are presented, as well as the conclusions. Finally, discus-
sion of the results as well as research limitations and future study directions are
provided.
4.2 Theoretical Framework
4.2.1 Sustainable Development and Environmental

Accounting
The concept of sustainable development is broad and integrates with the concept
of Triple Bottom Line, which has been widespread (Gregson, Crang, Fuller, &
Holmes 2015; Slapper & Hall 2011). The Triple Bottom Line (TBL) is defined
as an accounting framework that incorporates three performance dimensions: social,
environmental, and financial. This differs from traditional reporting frameworks, and
in that, it includes ecological (or environmental) and social measures that may be
difficult to assign to the appropriate means of measurement. TBL dimensions are
also commonly referred to as three Ps: people, planet, and profits (Slapper & Hall
2011).
However, there are challenges to put the TBL into practice. These challenges
include measuring each of the three categories, finding applicable data, and calcu-
lating the contribution of a project or policy to sustainability. Challenges aside, the
TBL framework allows organizations to evaluate the ramifications of their decisions
from a truly long-term perspective.
In this sense, accounting has the role of helping in the measurement and disclosure
of environmental and social information; second, the concern of society with the
environment has increased in recent decades; more people are interested to know
what is the environmental impact on the production processes and services offered
by companies. Thus, environmental information has gained relevance in society.
(Carvalho Filho, Pimentel, Bertino, & Oliveira 2018).
Social and environmental accounting has been defined by Gray et al. (1987) as
the process of communicating the social and environmental effects of organiza-
tions’ economic actions to particular interest groups within society and to society
at large. As such, it involves extending the accountability of organizations (particu-
larly companies), beyond the traditional role of providing a financial account to the
owners of capital, in particular, shareholders. Such an extension is predicated upon
the assumption that companies do have wider responsibilities than simply to make
money for their shareholders.
Defined as the study of the environmental heritage (environmental assets, rights,
and obligations) of entities, Environmental Accounting aims to provide its users,
internal and external, with information about environmental events that cause changes
in the patrimonial situation, as well as to identify them, measure and disclose (Santos,
2001).
According to Gray (1998), perhaps the most frequent perspective employed in
social accounting is that of the standpoint of accountability and transparency. Such
a view is predicated upon the rights to information of the polity in a democracy and
argues, in an increasingly secretive and complex world, for a commensurate increase
in the transparency of the organizations that control and determine our futures.
Gray (1994) states that accounting and reporting cannot act in isolation. Organi-
zational change is necessary to enable and/or encourage the internal information and
reporting systems to be both developed and used while institutional, regulatory, and
market changes are necessary to encourage organizations to report and for financial
participants to respond positively. In this sense, sustainability must be part of the
strategic planning of organizations.
In order to give so, me indication of the kind of organizational change that is
needed, Gray presented, John Elkington’s “Ten Steps to Environmental Excellence.”
Based on John Elkington’s ten steps, we have drawn up a table with four strategic
planning phases, associating it to each step and its objectives (Fig. 4.1).
Bertoli and Ribeiro (2006) highlight that the adequacy of the inclusion of environ-
mental information in the accounting reports (environmental assets and liabilities),
Fig. 4.1 The ten steps to environmental excellence. Source: Elaborated by the authors, adapted
from Elkington (1987) and Gray (1994)
Disclosure of information
Financial Non-Financial
amount spent on environmental
should be
matters (possibly enabling
possibly be environmental policy for the organization
capitalization due to spend impact on
split between
EPS)
regulated and
anticipated pattern of future
voluntary costs
environmental expenditure organizational activity in the environmental
environmental contingent liabilities - most especially field, including such matters as emissions
those arising from remediation costs under ‘Superfund’ statement
type legislation
Fig. 4.2 Proposals United Nations (UN) to environmental accounting and reporting. Source:
Elaborated by the authors
as well as its disclosure, is useful for the various groups of users. Because, it makes
it possible to evaluate the company’s concern with its social role, positioning in
relation to the environment, formulation, and implementation of ideas and attitudes
and behaviors that promote improvements in the short and long terms, which will
be reflected in the company’s image and in your equity situation. The UN proposed
a synthesis of the financial and non-financial information that should be included in
the sustainability reports (Gray 1994) (Fig. 4.2).
Thus, if the UN is successful in getting nations to adopt their proposals, all
companies can be expected to increase their financial disclosure within the current
financial statements whilst also being required to provide statements of envi-
ronmental policy and statements of environmental performance. This last would
almost certainly follow the general sort of direction suggested for the statement of
compliance-with-standard.
Still, according to the author at its simplest, the current accounting and reporting
activity depends upon four factors:
(i) Organizations: The organizations that are accounted for (the ‘accounting enti-
ties’) are defined in space and time. Events, which do not fall within the defined
organization, are ignored.
(ii) Economic Events: The only events that accounting recognizes are the ‘economic
events’ which are tautologically defined as those events which have financial
effects on the organization.
(iii) Financial Description: The events that accounting recognizes are further
limited to those economic events which can be described in financial terms—
or, more particularly, those which have generated in the past, do generate now
or will generate in the future cash receipts or cash payments.
(iv) The Users of Information: The way in which the events are recognized and then
processed is (largely) determined by sets of assumptions about the eventual
users to whom this information will be communicated and by whom it will
be used. The users are predominantly assumed management, investors, and
lenders, and their interest is assumed to be predominantly financial.
4.2.2 Environmental Chart of Accounts
Ferreira Apud Tinoco and Kraemer (2011) highlights that the chart of accounts of
a company that has the environment as a strategic variable of its business must be
prepared considering the current and potential particularities, in order to enable the
preparation of environmental management reports and not need to be constantly
changed.
Environmental accounting seeks to highlight the accounts that include accounting
facts relevant to environmental management. The main criteria used to prepare a chart
of accounts to support environmental accounting are:
• The chart of accounts structure must be specific to each organization;
• The chart of accounts hierarchy should be illustrated by a classification system
based on its own codes;
• The classification should be constructed from the most general characteristics of
the account groups to the specificities inherent in each of them;
• The information generated from the chart of accounts must be in accordance with
the needs of users;
• The names contained in the chart of accounts should easily identify the assets;
• The structure must allow flexibility that allows its alteration (enlargement or
reduction) and operationalization.
Adapting the chart of accounts to obtain reliable financial information is essential
for preparing sustainability reports.
Companies need to adapt to this new reality and seek new forms of management in
relation to the environment. One of the paths that can be followed for this adaptation is
that of Environmental Management. Through an adequate costing system, managers
are more likely to better allocate environmental costs to their products (Bouças,
Buratto, & Silva 2010).
Organizational obligations related to your responsibility in society can be released
through a mechanism. The benefits that a company can obtain from sustainability
reports include the creation of a positive image and reputation, in addition to a greater
potential for market growth Markota Vukić, Omazić, & Aleksić (2018).
4.3 Methodology
This research is characterized as a case study. Yin (1984) defines the case
study research method “as an empirical inquiry that investigates a contemporary
phenomenon within its real-life context; when the boundaries between phenomenon
and context are not clearly evident; and in which multiple sources of evidence are
used.”
According to Patton (1987), the choice of the case study to research an area of
interest in depth is particularly appropriate.
Anderson sees case studies as being concerned with how and why things happen,
allowing the investigation of contextual realities and the differences between what
was planned and what actually occurred.
To create a theoretical framework, we conducted a bibliographic search based
on the analysis of books and scientific articles, which shows an overview of
accounting and the importance of its implementation by companies. Later, we started
to investigate its applicability in the analyzed company.
Infraero discloses its financial statements considering the result of all 54 airports
and 55 stations that provide aeronautical telecommunications services, managed by
the company. Thus, an individual analysis of each airport was not carried out, but
based on the disclosure made by the company through an annual report, consolidated
trial balance, and general chart of accounts.
4.4 Findings and Discussion
4.4.1 About Infraero
Infraero is a federal government company indirectly linked to the Civil Aviation

Secretary; it was founded in 1973 and is currently responsible for the direct adminis-
tration of 54 public airports in Brazil. In 2018, Infraero was responsible for operating
approximately 1.3 million flights, carrying more than 82.7 million passengers at the
airports under its management (GRI INFRAERO 2018).
Until 2011, Infraero held a monopoly on all major Brazilian airports. From this
period, some of the airports previously managed by Infraero were granted to private
companies.
During the operation of an airport, there are several interfaces with the environ-
ment, among which are the maintenance of the quality of the drinking water served to
the passengers, management of the solid waste produced in the buildings, monitoring
of atmospheric emissions, environmental licensing, recuperation of degraded areas,
monitoring of aeronautic noise, and management of wildlife risk (Neto et al 2019).
In 2017, the company adopted the GRI report for the first time, emphasizing the
environmental actions carried out with greater emphasis in relation to previous years
considering the requirements of the report, where it disclosed the following:
It is worth mentioning some of the actions carried out in 2017 that positively impacted envi-
ronmental management. One of them was the revision of the Company’s chart of accounts,
specifically regarding the adequacy of the measurement of environmental management
expenses.
The statement found in the GRI was what motivated this research, in order to
verify, what were the changes made in the company’s chart of accounts, to iden-
tify environmental expenditures and how this information is being measured and
disclosed.
4.4.2 Implementation of Environmental Accounting

in Brazilian Public Airports
To implement environmental accounting, it is first necessary to know the environ-

mental events and impacts related to the company’s activity that affect its heritage and
its continuity, as well as the quality of life of people, fauna, flora, rivers, and seas,
and therefore, they should be subject to registration, accumulation, measurement,
evaluation, and disclosure by corporate accounting (Tinoco and Kraemer 2011).
So that environmental activities do not jeopardize the operational safety of airports
managed by Infraero, airports must follow environmental programs and guidelines
and, in this context, meet the environmental services defined by the company. These
services range from simple technical guidelines to the development of more specific
studies and reports.
In Brazil, there are no differences in environmental regulations between regional
and international airports. The regulations consider the environmental impact caused,
the noise zones, and the specific laws that vary in each state where the airport is
located.
We found that in order to properly measure the expenses incurred with environ-
mental management actions, the company’s chart of accounts was revised. The need
to create new accounts and the segregation of exclusively environmental expenses
from other expenses are to be identified.
Analyzing the accounting accounts included in the company’s chart of accounts,
we identified which item of the company’s ten environmental programs, the envi-
ronmental accounts would be associated, and the results found are shown in
Table 4.1.
The company also owns and discloses its environmental policy, thus verifying
how the actions taken are in line with John Elkington’s “Ten Steps to Environmental
Excellence.”
We analyzed the company’s balance sheet to identify the values recorded in 2018,
in the main environmental accounts; the findings are in Table 4.2.
Although electricity and water supply are associated with the company’s environ-
mental programs, the expenses incurred in these accounts are not considered envi-
ronmental expenses, but inputs managed by the company through policies to control
and reduce consumption, as per included in objective five of Infraero’s environmental
policy.
V —Rational use of energy and water resources;
Therefore, they are not in Table 4.2.
It is found that the largest environmental expense is with the treatment of sewage
generated, which in turn has three forms of treatment:
• Disposed directly into the public sewage system to be treated by the utility.
• Forwarded to treatment and reuse (ETR) stations for pretreatment and subsequent
release to the public network;
• Referred to treatment and reuse stations for complete treatment and launches at
the receiving site.
Table 4.1 Environmental accounts

Ten infraero environmental programs Associated accounting accounts
1 Environmental licensing Other taxes and fees
2 Soils and flora Flora and green management—forest
inventory
Management of flora and green areas
3 Solid waste Solid waste management
4 Fauna Wildlife Management
5 Environmental compliance Environmental management and
compliance
Environmental fines
External Audit—Environmental
Provision for environmental contingencies
6 Energy Electricity
7 Noise Noise management
8 Atmospheric emissions Air quality and air emissions management
9 Water resources Water resource management
Wastewater Management
Water supply
10 Environmental education Environmental education
Source Elaborated by the authors
Table 4.2 Accounting records

Environmental Account BRL %
Environmental education 33.600,00 0
Environmental taxes and fees 73.830,58 1
Environmental management and compliance 98.619,13 1
Air quality and air emissions management 165.443,97 1
Provision for environmental contingencies—liabilities 366.470,36 3
Flora and green management—forest inventory 426.963,32 3
Environmental fines 501.016,38 3
Water resource management 734.957,98 5
Noise management 812.511,76 6
Management of flora and green areas 1.292.324,54 9
Wildlife Management 1.595.847,32 11
Solid waste management 3.353.846,58 23
Wastewater management 4.901.115,60 34
Total 14.356.547,52 100
Source Elaborated by the authors
We have identified that the amount recorded in the “Wastewater Management”

account refers to the payment of the sewage fee charged when the concessionaire
collects, transports, and disposes of waste, pursuant to
Article 3 of Law 11.445 of January 5, 2007 (Establishes national guidelines for
basic sanitation).
Sanitary sewage: consisting of activities, infrastructures, and operational facili-
ties for proper collection, transportation, treatment, and disposal of sanitary sewage,
from building connections to their final release into the environment; (Brasil 2007).
In this sense, it is verified that only the sewage costs collected by the concessionaire
are recognized, the sewage costs treated in the ETR are hidden in other expense
classifications, as they are not easily prorated.
Second in the ranking of environmental spending is Solid waste management, in
relation to this item the company highlights in its policy:
VII—effectively manage solid waste, striving for reduction, reuse, recycling, and
treatment, as well as the environmentally appropriate final disposal.
The third is Wildlife Management spending, according to Neto et al (2019) this
is the most emblematic example of the interface between an airport operation and
the environment. As an example, according to the Brazilian Annual Wildlife Strike
Summary (2015), the country registered 1733 collisions between aircraft and birds,
1081 near-collisions, and 2634 sightings in 2015. According to the same report,
the focus of airfield operators must be excellence in performing passive and active
measures to mitigate collisions in flights, thereby depending on the pro-active actions
of air traffic controllers and aircraft operators.
Following are the expenses with Flora Management and Green Areas, Noise
Management, Water resource management.
4.4.3 Disclosure
The disclosure of assets and liabilities may be made in the financial statements or by
other means, such as explanatory notes or management reports. This potential set of
means for disclosure encompasses compulsory and voluntary disclosure. Disclosure
policies are mechanisms by which manager’s influence outside perceptions of the
organization to which they belong. Therefore, the use of disclosure may be associated
with the company’s relationship policy with society. (Alves & Borba 2010)
Thus, we verify the environmental expenditures disclosed by the company in the
last 5 years in its annual reports, the data obtained are shown in Graph 4.1.
From 2014 to 2016, the company disclosed, through its Social Report, included
in its annual report, the environmental expenses. In 2017, following the adoption of
the GRI, it disclosed financial information on environmental activities in the report
and mentioned the revision of the company’s chart of accounts.
In 2018, despite adopting environmental accounting, no information on the
amounts of environmental expenditures was disclosed in the report. However, it can
be seen that, through management reports, the separation of environmental expenses
Environmental Expenses in R$
16,000
14,000
12,000
10,000
8,000
6,000
4,000
2,000
-
2014 2015 2016 2017 2018
Graph 1 Disclosure of environmental expenditures (2014-2018). Source Elaborated by the authors
from other expenses provided a better identification of expenses, since there was
no increase in expenses but a better disclosure of the segregation of environmental
expenses, which had previously their costs implied in other expenses.
The company recognizes in its financial statements the environmental liability,
arising from environmental contingencies and Termos de Compromisso de Compen-
sação Ambiental—TCCA (Environmental Commitment and Compensation Terms).
According to Bertoli and Ribeiro (2006), the environmental liability represents
the sacrifice of economic benefits that will be realized for the preservation, recovery,
and protection of the environment, to allow the compatibility between the economic
development and the ecological environment or due to misconduct regarding environ-
mental issues. It concerns not only the sanctions for environmental degradation but
also the business measures for the prevention of environmental damage, which have
economic and financial consequences, compromising both the present and the future
of the company, exemplified in the situations in which the company has to assume
the responsibility. Responsibility for the consequences of its operational activities,
such as the disposal of waste in the environment.
Environmental Compensation (TCCA) is defined in Federal Law n°. 9.985
(National System of Conservation Units—SNUC), which provides that, in the case
of environmental licensing of projects with significant environmental impact, the
entrepreneur is required to support the implementation and maintenance of unit
group conservation. Alternatively, if the venture affects a specific Conservation Unit
or its buffer zone, it must receive environmental compensation even if it does not
belong to the Integral Protection Group.
Infraero classifies as restricted cash savings deposits held pursuant to the Envi-
ronmental Compensation Commitment (TCCA) entered into with environmental
organizations. The use of these resources is solely for compliance with environ-
mental licensing of projects, as provided for in Law. The amounts related to the
environmental commitment totaled R$ 16,746 million in 2018. (GRI INFRAERO
2018).
Although it does not mention in the financial statements the contra entry of
the accounting entry in the savings account, it was verified from the balance that
the recognition of the environmental liability was correctly accounted; now the
commitment was entered, recording the obligation as accounts payable, although
disbursement has not yet occurred, in line with IAS 37.
The company informed in an internal document, the reason for the registration of
environmental liabilities:
Given the commitment assumed and the already known value of 0.5% applied
to the expected total cost for the expansion of the airport, it is necessary to record
the obligation in liabilities to demonstrate the counterpart of the resources already
transferred to the savings account, in order to honor the obligation., with future
transfers to environmental agencies to compensate for the environment.
The company also provisioned environmental contingencies in the amount of R
$ 336 thousand and was informed by means of an explanatory note:
Environmental Actions—Infraero establishes provisions for environmental
actions arising from fines imposed by public bodies, which are under discussion at
the administrative level, arising from the normal course of their activities or alleged
non-compliance/non-compliance with environmental conditions (GRI INFRAERO
2018).
In order to demonstrate what would be the disclosure of qualitative and quantitative
environmental information, we performed a simulation highlighting these factors in
the company’s balance sheet (Table 4.3).
In addition to Infraero’s disclosure analysis, in order to identify the level of disclo-
sure on sustainability issues by Brazil’s leading airport administrators, we apply the
index developed by (Jordão & Rhouma 2009), which shows the level of coverage of
the Report. Sustainability Reporting, taking into account the following report scoring
criteria:
Level 1: No information on sustainability issues is available on reports neither on
website.
Level 2: There is information related to sustainability issues only on the website
and is not Updated.
Level 3: There is no updated exclusive sustainability report but these issues are
included in the Annual Report.
Level 4: There is an updated exclusive sustainability report available but it is not
based on GRI guidelines.
Level 5: There is an exclusive sustainability report available and it is based on
GRI Guidelines.
Airport concessions started in 2011, with São Gonçalo do Amarante Airport (RN).
In 2012, the airports of Brasília/DF, Guarulhos, and Viracopos, in São Paulo were
auctioned; and, in 2013, the Antônio Carlos Jobim—Galeão International Airports, in
Rio de Janeiro/RJ and Tancredo Neves—Confins, in Minas Gerais. Such concessions
were aimed at improving the quality of services at these airports and accelerating the
execution of the works necessary to meet the demand for air transport, the growth of
the sector in the country and the holding of major events, such as the FIFA World Cup
in 2014 and the Games Olympic Games in June 2016. In 2017, four more airports were
awarded: Pinto Martins, in Fortaleza/CE; Luiz Eduardo Magalhães, in Salvador/BA;
Table 4.3 Balance Sheet (simulation with environmental disclosure)

R$ (mil) R$ (mil)
Assets Liabilities and stockholders
equity
Current Assets 1.737.297 Current Liabilities
Obligations 733.040
Other obligations* 260.469
Environmental compensation** 612
Total current assets 1.737.297 Total current liabilities 994.121
Noncurrent Assets Noncurrent Liabilities
Restricted cash * 60.098 Post-employment benefit 1.632.249
Restricted cash—environmental 16.746 Provision for contingencies * 547.243*
compensation **
Bills to receive 210.861 Environmental Contingencies** 336
Judicial deposits 362.641 Taxes to collect -
Investments 2.327.375 Capital increase resources 668.551
Immobilized* 262.240 Other obligations* -
Environmental equipment** 500 Environmental compensation** 16.134
Intangible 18.451
Total noncurrent assets 3.258.912 Total non current liabilities 2.864.513
Total stockholders equity 1.137.575
Total asset 4.996.209 Total liabilities and stockholders 4.996.209
equity
* Represents environmental information has been recorded in the balance sheet originating
** Segregated environmental information Source: elaborated by the authors
Source: elaborated by the authors
Hercílio Luz, in Florianópolis/SC; and Salgado Filho, in Porto Alegre/RS (National

Civil Aviation Agency—ANAC 2018).
Thus, we analyze the environmental information of Infraero and these other
Brazilian airport administrators and classify them according to the levels proposed
by (Jordão & Rhouma 2009).
Table 4.4 shows that among the main Brazilian airport administrators, only
Infraero and Fraport have an exclusive sustainability report available and it is based
on GRI Guidelines.
This result does not mean that these companies are more efficient in relation to
environmental practices, but that better demonstrate their environmental activities
through annual reports, in relation to the other companies that obtained lower scores.
Regarding the qualitative and quantitative environmental information in the finan-
cial reports, only Infraero discloses this information in the financial statements
through explanatory notes. No environmental information was identified in the
financial statements of other airport management companies.
Table 4.4 Level of sustainability reporting coverage by Brazilian airports

Airport Sustainability Company Locality
reporting coverage
Aeroporto Internacional 1 Inframerica Brasilia—DF
de Brasilia—Presidente (Corporacion America
Juscelino Kubitscheck S/A)
Aeroporto Internacional 2 BH Airport Confins—MG
de Belo Horizonte
Aeroporto Internacional 1 RIOgaleao Rio de Janeiro—RJ
Tom Jobim
Aeroporto Internacional 2 Zurich Airport Florianopolis—SC
de
Florianopolis—Hercilio
Luz
Aeroporto Internacional 5 Fraport Fortaleza—CE
Pinto Martins Brasil—Fortaleza
(Fraport AG)
Aeroporto Internacional 1 GRU Airport Guarulhos—SP
de Sao Paulo
Aeroporto de Natal 1 Inframerica Natal—RN
(Corporacion America
S/A)
Aeroporto Internacional 5 Fraport Brasil—Porto Porto Alegre—RS
Salgado Filho Alegre (Fraport AG)
Aeroporto Internacional 2 VINCI Airports Salvador—BA
de Salvador—Deputado
Luis Eduardo
Magalhaes
Aeroporto Internacional * Aeroportos Brasil Viracopos—SP
de Viracopos
Infraero Airports 5 Empresa Brasileira de 54 public airports in
Infraestrutura several Brazilian states
Aeroportuaria—
INFRAERO
Triunfo Participações e Investimentos is insufficient, as it is not limited to Viracopos Airport, but
to all projects managed by the Company as a whole
Source Adapted by the authors
Considering Infraero’s performance in relation to other companies, in terms of

measuring expenses with environmental management and disclosing the environ-
mental impacts of its activities, privatization did not significantly influence this
issue.
Rolim, Bettini, & Oliveira (2016) carried out a study of the behavior of Brazilian
airports after the privatization process, the authors concluded that privatization led
to a general increase in passenger demand, a phenomenon probably associated
with increased flexibility in private management, but did not identify a clear linear
relationship between efficiency gains and privatization.
4.5 Conclusions
The results obtained show that the company targeted by this study has been
increasing its concern with the environment every year. This can be seen in ten
programs covering the main topics of interest to airport administration in the areas
of sustainability and compliance with environmental legislation and that environ-
mental accounting can be an internal control tool to measure environmental spending
and contribute to business strategies sustainable in order to obtain a competitive
advantage.
The company analyzed, when implementing environmental accounting, recog-
nizes the importance of disclosing qualitative and quantitative information related
to its environmental activities in the financial statements and the usefulness of this
information to understand the environmental impact on business.
However, as the information is not made available individually for each airport,
as well as the criteria for apportioning environmental costs and expenses are not yet
fully defined and implemented, since many of them are implicit in other activities
carried out by the company.
It is understood that by means of an environmental management system integrated
with the accounting system, the company will be able to obtain more detailed financial
information, in addition to improving its cost-sharing processes between activities.
The sustainability report presents a systematic communication between the orga-
nization, its stakeholders, and the general public about social responsibility activi-
ties, including organizational social and environmental impacts, as well as corporate
governance impacts, which are not covered by financial performance indicators.
Thus, the adoption of GRI provided the company with a better disclosure of the
environmental aspects existing in Brazilian public airports and financial disclosures.
This study was limited to investigating the adoption of environmental accounting
by Infraero and how information is disseminated through annual reports. Other
studies will be able to verify that all environmental requirements are followed by
airports in Brazil and that environmental investments are relevant and capable of
enabling greater operational and financial efficiency.
Finally, the study shows the importance of correctly recognizing environmental
assets, liabilities, costs, and expenses in accounting, and that the environmental
information disclosed by Infraero is superior to that disclosed by other airport
administrators in Brazil.
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Chapter 5
Sustainable Development of Human
and Social Capital in a Socioeconomically
Challenged Community in Brazil
Renuka Vivekananthan
Abstract In an increasingly globalized world, the issue of poverty and inequality is

gaining in importance. While some parts of society benefit from the positive effect
of globalization, other strata of society feel left behind, having no opportunities to
participate in the increase in prosperity. The concept of Corporate Social Responsi-
bility is a topic that has increasingly gained significance over the past five decades.
More recently, the expectation of social involvement has not been limited to just
businesses, but has also expanded to educational institutions, which led to the formu-
lation of the Corporate Social Responsibility-derived concept of University Social
Responsibility. This paper analyzes a University Social Responsibility project in the
community of Dendê, part of the Brazilian city of Fortaleza. As a social initiative,
its aim is to provide the community members with skills and work experience. For
the project to function in an optimal way and fulfill its intended purpose, potential
hindering factors have to be remedied. The scope of this analysis was to examine
the project, identify possible obstacles to the optimal functioning of the project, and
propose optimization approaches. The implementation of the suggested ideas into
the project is expected to facilitate the sustainable development of human capital and
social capital in the community of Dendê.
Keywords Corporate social responsibility · University social responsibility ·

Social capital · Human capital · Sustainability
5.1 Introduction
The globalized world has brought with it an ever-growing gap between the rich and the
poor, uneven distribution of wealth, and large segments of society at a disadvantage.
Many people live below the poverty line with lack of education, restricted access
to sources of information, and insufficient standards of living. Social initiatives by
R. Vivekananthan (B)
University of Fortaleza, Fortaleza, Brazil
e-mail: vive.renuka@yahoo.de
https://doi.org/10.1007/978-981-15-6366-9_5
78 R. Vivekananthan
corporations and universities are meant to counteract and remedy these precarious
socioeconomic conditions. In the northeastern Brazilian city of Fortaleza, significant
segments of the population struggle with low or very low living conditions on a daily
basis (Globo, 2017). The community of Dendê is one of the poorest out of Fortaleza’s
119 districts with a very low Human Development Index of 0.350 HDI (Vasconcelos
de Sousa, 2017). To counteract the poor living conditions, the University of Fortaleza
(UNIFOR) launched and supported a University Social Responsibility based project.
The project POLO DE PRODUÇÃO DE VASSOURAS COM GARRAFA PET,
which roughly translates to broom production out of PET bottles, is the recycling
of plastic bottles in the district of Dendê. The project is an environment-friendly,
zero-waste social initiative, as it uses plastic bottles, which are usually not reused,
to produce bristles out of the plastic and thus producing no additional waste. The
brooms are produced at the project’s workshop, which is located in the community
of Dendê (Luzanira, 2017). The production work is carried out by a small team
consisting of six members, drawn from the community of Dendê.
The project was initiated with the intention to provide the community members of
Dendê with skills, work experience, and the opportunity for networking. This paper
addresses the potential obstacles in achieving these intended aims of the project
and poses the question, what the causes of these obstacles are and how they can be
overcome, so that the project can fully unfold its potential and promote the sustainable
development of human and social capital. To identify the obstacles, the internal and
external circumstances of the project were used to extract relevant data, which was
then categorized and analyzed in a contrasting juxtaposition. After identifying the
obstacles, optimization proposals were designed for each of the hindering factors.
The identification of the causes of the hindering factors constitutes the analysis of
this project.
5.2 Theoretical Foundation
5.2.1 Understanding Corporate Social Responsibility (CSR)
Since the 1950s, the relationship between business and society has been a subject of
debate. The formulation of Social Responsibility or what became to be known later
as CSR played a vital role in igniting the debate (Turker, 2009). The concept has
a relatively short history, with Bowen (1953), one of the first scholars to define the
concept, formulating in his book Social Responsibilities of the Businessman that CSR
is “the obligation of businessmen to pursue those policies, to make those decisions,
or to follow those lines of action which are desirable in terms of the objectives and
values of our society” (Carroll, 1999, p. 270). This is to mean that corporations should
base their decisions and actions with due regard to society’s contemporary values of
the time, so as not to ignore them or even go against them when formulating their
business policies. In the 1960s, the concept of CSR started to grow in popularity in
5 Sustainable Development of Human and Social Capital … 79
society, and this was largely driven by the social movements that formed the zeitgeist.
These movements included civil rights, women’s rights, consumers’ rights, and the
environmental movement, all of which changed the way in how large segments of
society perceived these social topics, and this paved the way for CSR to enter the
general public’s mind (Carroll & Shabana, 2010).
A growing part of society supported the concept of CSR, with academics such as
Carroll, Davis, and McGuire arguing in favor of CSR and were of the opinion that
corporations’ duties should go beyond merely their economic and legal interests. In
contrast to this, economists such as Milton Friedman contended, “few trends could so
thoroughly undermine the very foundations of our free society as the acceptance by
corporate officials of a Social Responsibility other than to make as much money for
their stockholders as possible” (Friedman, 1962, p. 133). Friedman’s stance was that
corporations should solely focus on maximizing their profit and stated that Social
Responsibility going beyond this would mean challenging the principles of a free
society. According to Friedman, the only way corporations should address social
issues is by making as much money as possible. Friedman emphasized this by saying,
management is “to make as much money as possible, while conforming to the basic
rules of society, both those embodied in the law and those embodied in ethical
custom” (Friedman, 1970, p. 17).
While earlier research was mainly focused on the question, if CSR should exist, the
emphasis began to shift to why CSR exists and its effect on the economy (Kitzmüller
& Shimshack, 2012). This had a profound effect on the more recent definitions
of CSR by including contemporary social and environmental issues by “incorpo-
rating social characteristics or features into products and manufacturing processes
(e.g., aerosol products with no fluorocarbons or using environment-friendly technolo-
gies), adopting progressive human resource management practices (e.g., promoting
employee empowerment), achieving higher levels of environmental performance
through recycling and pollution abatement (e.g., adopting an aggressive stance
towards reducing emissions)” (McWilliams, Siegel, & Wright, 2005, p. 3) into the
definition of CSR. Rahman (2011) demonstrating this transformation defines CSR
of the 1950s as an obligation to society, while CSR of the twenty-first century has a
more specific definition, including a wider array of social and environmental issues as
opposed to the rather vague definition of the 1950s. Benabou & Tirole (2009) posit
that businesses have to sacrifice profits for the interests of society on a voluntary
basis. In their definition of CSR, sacrificing profits means transcending obligations
required by law and contracts. By going beyond these obligations, the definition
would include good causes, inter alia supporting the arts and universities. Lantos
(2001) describes three types of CSR: ethical, altruistic, and strategic. According to
this categorization, ethical CSR encompasses avoiding harm to society and is oblig-
atory for organizations. Specifically, it is stated that altruistic CSR, which means
doing good deeds at the expense to shareholders, is not legitimate for publicly held
businesses. In addition to this, companies’ philanthropic activities should be confined
to strategic CSR, which means doing good deeds, that are beneficial to society as
well as the business (Lantos, 2001).
80 R. Vivekananthan
As the definition of CSR has evolved over the years, the perception of CSR in
the public’s mind has also changed. A survey found that 52% of the questioned
individuals look for company’s CSR records using the Internet (Fleishman-Hillard
& National Consumers League, 2007). A poll conducted by Mori (2003) showed
that more than half of American customers are influenced by a company’s social
reputation when purchasing a product and 70% of U.K. customers responded that
they would pay more for a product, which they see as ethically superior. Both
surveys demonstrate how CSR has gained importance in the general population.
While various definitions have been postulated since the 1950s, Carroll’s pyramid
of corporate social responsibility continues to be a reference point for CSR research
(Carroll, 2016).
5.2.2 Impact of Carroll’s Pyramid of Corporate Social

Responsibility
The Pyramid model, which was designed by Carroll (1991), is seen as a positive and
appropriate definition of the concept of CSR. Since its publication, it has served as a
popular reference and definition for CSR research purposes (Carroll, 2016). McGuire
defined CSR as corporations having “not only economic and legal obligations but also
certain responsibilities to society, which extend beyond these obligations” (McGuire,
1963, p. 144). A major advantage over the previous definition was that with his
pyramid model Carroll names and defines more precisely what corporations’ “certain
responsibilities” are (McGuire, 1963, p. 144). He incorporated these responsibilities
in his pyramid model in a plain and graphic way, in order to bring together all
the components in a context and in ascending sequence of importance (Carroll &
Shabana, 2010).
Carroll named the individual building blocks of the pyramid, economic, legal,
ethical, and philanthropical responsibilities (Carroll, 1991). The economic responsi-
bility, in other words, the financial profit, is discerned as the foundation upon which
the other three responsibilities rest. And therefore, Carroll described the economic
responsibilities as “required” (Carroll & Shabana, 2010, p. 90). Legal responsibilities
are to be obeyed by the business because “the law is society’s codification of accept-
able and unacceptable behavior” and therefore, just like economic responsibilities, it
was described as being “required” (Carroll, 1991, p. 42). Ethical responsibilities mean
in their basic definition to do what is “right, just, and fair and to avoid and minimize
harm to stakeholders (employees, consumers, the environment, and others)” (Carroll,
1991, p. 42). Carroll described ethical responsibilities as “expected” of corpora-
tions and businesses (Carroll & Shabana, 2010, p. 90). Philanthropic responsibilities
are defined as being a good corporate citizen, more specifically, “wherein business
is expected to contribute financial and human resources to the community and to
improve the quality of life” (Carroll, 1991, p. 42). The difference between philan-
thropic and ethical responsibilities is that philanthropic responsibility is not expected
in an ethical or moral sense. Because society does not expect but hope for businesses
to act in a philanthropic way; philanthropic responsibilities are described as being
“desired” (Carroll & Shabana, 2010, p. 90). The realization of philanthropic respon-
sibilities through social initiatives is not just restricted to businesses and corporations,
but also applies to educational institutions (Shawyun, 2012). Although classical defi-
nitions of CSR such as Carroll’s Pyramid of CSR continued to serve as an important
reference for CSR research purposes, more recent, innovative, and unorthodox defi-
nitions of CSR have been brought forward by academics, most notably, Michael
Porter and Mark Kramer.
5.2.3 Contemporary Approach to CSR
Michael Porter and Mark Kramer, calling Friedman’s view of capitalism “old” (Porter
& Kramer, 2011, p. 6) and “narrow” (Porter & Kramer, 2011, p. 6), argue in their paper
Creating Shared Value that it is this perspective, which has influenced the thinking
among business and management leadership during 1990s and 2000s. According
to Porter and Kramer (2011), most businesses see societal concerns as a peripheral
social responsibility and do not see the issues as being at the core of their policy-
making. In order to counteract this development, Porter and Kramer formulated a
more modern approach to businesses’ responsibility toward society, calling it shared
value. Claiming that the concept of shared value has the power to unleash a wave
of global growth, Porter and Kramer (2011) define the concept, as the connection
between societal and economic progress by addressing the needs and challenges
that society faces and thereby creating economic and societal value. To reconnect
economic success with societal progress and to address society’s concerns, three key
ways are identified: (1) To reconceive products and materials; (2) To redefine produc-
tivity in the value chain; and (3) to enable local cluster development. Furthermore,
Porter and Kramer (2011) declare that the creation of shared value would be the best
opportunity to present business in the proper light in the eyes of the society again.
5.2.4 Understanding University Social Responsibility (USR)
University Social Responsibility is a new management thought that results in the

renaissance of social involvement of universities, facilitating innovative solutions
to the challenges of university teaching in the context of a globalized world, yet
based on unsustainable development. Other views see the concept of Social Respon-
sibility as a creation born out of the corporate world, but that it is also applicable to
universities because of an increasing number of higher education institutions recog-
nizing the importance of a strong relationship with the society in which they operate
(Pompeu, Marques, & Braga, 2015). Nagy and Robb argue that universities increas-
ingly “operate like corporations” (Nagy & Robb, 2008, p. 1414), while at the same
82 R. Vivekananthan
time stating that these institutions have “more obvious historically based obliga-
tions to society” (Nagy & Robb, 2008, p. 1414) compared to businesses. This is
to mean that while universities are starting to emulate corporations in the way they
operate, through, e.g., changes in the way they are administrated, they still have an
evident interconnectedness with society. This, despite the mentioned corporatization,
obligates these institutions to consider societal issues and address them. Shawyun
(2012) takes the same line stating that universities are vital for human development
and therefore should be socially responsible toward their human product and stake-
holders, both of which affect business and society. When CSR and USR take shape
in the form of social initiatives, Social Capital and Human Capital play a vital role.
5.2.5 Social Capital
Social capital influences society, organizations, social groups, small to medium-

sized enterprises, and other corporations, which act collectively, in numerous ways.
The term social capital in its essence is used to describe networks of interpersonal
relationships within a society. These networks serving as foundations for shared
values, action, research trust, and cooperation among the members of the community
and the resulting drive, which are useful for economic and social development, are
described as social capital (Loury, 1976). Diop, Pascot, and Mbibi (2013) postulate
that social capital is made up of internal and external social relations. Internal social
relations refer to the bonding ties within a collective network, while external social
relations mean the bridging ties between networks. The development of social capital
creates the optimal structural, relational, and cognitive preconditions that minimize
hindering factors to facilitate the self-development of individuals (Diop et al. 2013).
A conceptual framework formulated by Diop et al. (2013) shows how social capital
influences human capital via knowledge transfer and absorption capacity. It describes
social capital in three different types, namely (1) structural social capital, (2) rela-
tional social capital, and (3) cognitive social capital. The common understanding
of structural social capital is that it refers to social relations among individuals and
communities. The qualitative characteristics of a social network are described as
relational social capital. In specific, the term refers to the interpersonal aspects of
social relations within a network. The third component of social capital is the cogni-
tive social capital. Cognitive social capital refers to all the resources of a network,
which facilitate collective extending of knowledge, the structure purporting insti-
tutions among members of a social network. Knowledge transfer is the sharing of
knowledge between the individual members of a network, the acquisition of new
knowledge and skills as well as the sharing of existing knowledge. The acquisition,
exchange, and integration of knowledge, skills, and information are influenced by the
absorption capacity (Diop et al., 2013). In precise terms, the absorption capacity is the
ability of a network to acquire, assimilate, transform, and use knowledge, skills, and
information for its own development (Zahra & George, 2002). Knowledge transfer
and absorption capacity are mutually dependent, and the trust that is required for
transferring knowledge is built on transparency within the network. All three types
of social capital promote the development of human capital via knowledge transfer
and integration as well as absorption capacity (Diop et al., 2013).
5.2.6 Human Capital
Becker (1994) defined human capital as knowledge, skills, health, and values a human
being has, as it is not possible to separate a human from the aforementioned values. A
more recent definition was brought forward, describing human capital as the cumu-
lative tacit knowledge, competencies, experience, skills, leadership, management
skills, innovativeness, and talents (Wang, Hou, & Cullinane, 2015). Nahapiet and
Ghosal (1998) postulate that human capital refers to the skills and the abilities of
individuals or the stock of knowledge within an organization. Human capital as a
resource has a key role in organizations. It should also be noted that its function as a
crucial resource is continually gaining in importance, leading to several consequences
for the operation of modern organizations. The rising significance of information on
the value and structure of an organization’s human capital is one of the consequences
(Koziol, 2017).
According to Coleman, human capital differs from social capital, in that human
capital means the acquired skills, expertise, and knowledge of a human being, while
social capital refers to the interpersonal relations of members within a society. He
further states that one of the important characteristics of human capital is that it is
an important organizational resource (Coleman, 1988).
5.2.7 The Effect of CSR and USR on Social Capital

and Human Capital
Habisch and Moon (2006) state that in order for businesses to be successful it depends
on a functioning society in which it operates. The society should be built on trust and
confidence among the members of the society in question, organizations, institutions,
and the business’ stakeholders. These can be promoted by corporations being socially
involved through CSR initiatives and invest in social capital (Habisch & Moon, 2006).
Human capital as a resource has a key role in organization. It should also be
noted that its function as a crucial resource is continually gaining in importance,
leading to several consequences for the operation of modern organizations. The
rising significance of information on the value and structure of an organization’s
human capital is one of the consequences. (Koziol, 2017). Vallusova and Marasová
(2010) see the Human Resources Management as the important CSR component
toward human capital, in that it is the inner environment of the company where the
investment in its human capital is realized. However, the philanthropic component of
84 R. Vivekananthan
CSR, through philanthropic initiatives, is usually expressed in its financial impact or

volunteered hours, but not in the impact it has on society or on human capital. A way
for companies to develop human capital is through investing into community-building
programs and sending their own human capital to participate in such initiatives,
thereby developing their own human capital at the same time (Silva & Cooray,
2014). The interconnectedness of social capital and CSR also plays a vital role in the
development of human capital, as social capital increases the value of human capital
(Vveinhardt, Andriukaitiene, & Cunha, 2014).
The function of USR is expressed through the aim of higher education institu-
tions, namely, to spread and generate knowledge through the teaching, research,
and extension of the same. Through investment in human capital and providing
training by academic staff, who are aware of the Social Responsibility that comes
with their job position, universities help to strengthen democracy in societies.
The investment in human capital facilitates an improvement in self-esteem and
credibility in a community. By productive interaction and a network built on trust,
the development of social capital is encouraged between teachers, students, and
communities (Pompeu et al. 2015).
5.3 Research Methodology
Utilizing the survey method, a two-part interview and a poll were conducted in June
2018, and the information gathered from both were categorized into the subject
areas, named internal process operation and external perception of the project. The
information that was categorized into the subject area internal process perception
was used to analyze the internal ties and the production process of the project. The
information in the category of external perception was used to determine the project’s
external ties.
The first part of the interview consisted of a visit to the workshop, where the
brooms are produced and an explanation as well as a demonstration through the
inner workings was given. The analysis of the internal operation process required
a thorough examination of the workshop, particularly the workspace, production
process including a detailed explanation of the individual production steps, and the
storage area.
The second part of the interview was carried out with a community board member
of Dendê at the campus of the University of Fortaleza with the purpose of getting
an overview on, inter alia, how the project is seen from within the community,
information about the production process and team members’ views as usually the
existing project information, is based on an outside perspective. In order to get
this information, the questions were categorized into the following subject areas:
(1) general project information, (2) project background, (3) broom manufacturing
process operation, (4) the impact of the project, and (5) future prospect of the project.
The answers given for each of the categories were analyzed in closer detail to extract
information for the analysis of the production process operation as well as internal
ties of the project.
To determine the external perception, i.e., external ties of the project in the imme-
diate surroundings of Dendê, a poll was conducted using the information gathered
from the interview. One spot at the campus of the University of Fortaleza was chosen
and two consecutive weekdays in the middle of the week were selected. On each day,
the questions were asked during the peak times for two hours. Prior to performing the
poll, the target groups were determined by the external circumstances, e.g., the envi-
ronment. The target groups were from a variety of social backgrounds and included
employees of the university, lecturers, students as well as foreign students and were
between the age of 18 and 60 years. A total of 125 participants took part in the poll.
The participants were asked two questions: (1) Are you aware of the project POLO
DE PRODUÇÃO DE VASSOURAS COM GARRAFA PET? (2) Would you use the
product of the project POLO DE PRODUÇÃO DE VASSOURAS COM GARRAFA
PET? Depending on the answer given to the second question, the participants were
asked why they would not purchase the product.
5.4 Results
5.4.1 Production Site
The first part of the interview consisted of inter alia an analysis of the internal
operation process, which was carried out on the workshop itself, i.e., the actual
workspace and the storage area, in order to learn the inner workings of the project.
The workshop is relatively small, with the dimensions being 4 × 6 m, yet it has to
be used in a multifunctional way. The major part of the workshop is used for the
production process. In one corner of the workshop, the bottles to be used for the
production are stored in waste bags, and in the other corner, partly finished as well
as finished products are stored. In the workshop, there are four worktables in the
room, which are used as work surfaces or as an intermediate storage for objects and
materials. There are no fixed areas on the worktable that are defined as a work surface
or storage areas. The worktables are used for several purposes at the same time. It
is decided and used depending on the situation. While one half of the worktable is
used as a work surface, the other half is used to store materials, such as the prepared
bottles or bristles. The tools that are required for the manufacturing process were
assembled by the team members using simple equipment, such as cutting blades
attached to pieces of wood. The distinguishing characteristic of the tools is that they
do not require electricity to be used. Another positive aspect of the tools is that they
can be flexibly attached to and detached from the worktables.
86 R. Vivekananthan
5.4.2 Production Process
The first and second part of the interview was carried out to get an overview of
the workshop’s layout and gather information about the actual production process.
The workshop’s primary function is to serve as the production site for the brooms.
The production process of the brooms is carried out in individual manufacturing
steps, which are performed in a specific order at different spots of the workshop. The
multi-purpose utilization of the workshop with six team members simultaneously
carrying out the manufacturing steps leads to overlaps and waiting times during the
production process.
According to the interview statement, only a maximum of 30 brooms are produced
on a typical production day. Taking into account that the team consists of six team
members, this would mean that each team member produces an average of five
brooms per production day. It should be noted that no information could be gathered
of how many hours a production day consists of. When comparing the figure of
five brooms per employee on a production day to the information given during the
interview, it becomes clear that the production output is not at the stated capacity of
15 brooms per day for each team member, which would result in a total daily output
of 90 brooms.
Manufacturing takes place depending on sufficiently available raw material. To
expand the production capacity, a steady supply of raw materials is required. This, in
turn, proved to be difficult since a steady source of revenue is needed by establishing
a stable customer base. A steady customer base can be achieved through a wider
customer reach and increased production capacity. So, it can be said that the obstacles
to increase the production capacity are interrelated.
To address the issue of productivity, an improvement of the workspace around
the team members would boost productivity and the team’s satisfaction (Stallworth
& Kleiner, 1996). When improving the workspace according to the team members’
needs, it is expected that the increase in productivity should be at 5–10% according
to Brill’s (1992) estimation, while Clements-Croome & Li (2000) estimate the rise
in productivity at 4–10%.
5.4.3 External Perception of the Project
The outcome of the poll demonstrated that there prevails a great unawareness about
the project’s existence in the immediate vicinity of Dendê leading to the conclu-
sion that the external ties of the project is improvable. Out of the 125 interviewed
participants, 73% answered that they were unaware of the project’s existence. The
remaining 27% were aware of the project, many of whom, however, are either directly
or indirectly involved in the project. Then, the participants were asked the second
question, namely how likely it is that they would purchase the project’s product. After
briefly explaining the product and how it is manufactured, the participants were asked
whether they would use the product in their own household. To the second question, a
vast majority of 89% of the respondents answered that they “would buy” the product,
while 11% answered that they “would not buy” the product. The 11% of the partici-
pants who answered to the second question, that they would not buy the product, were
then asked the optional third question to understand the reasons for not purchasing
the product. Asking the question why they would not purchase the product, 36% said
they were not convinced of the products’ quality and 21% stated the convenience
of purchase as the reason for not purchasing the product. 29% found the idea of
producing brooms out of the plastic bottles peculiar, while 14% were not convinced
of the products’ effectiveness. The findings demonstrate that there is great unaware-
ness about the project’s existence and that its external ties can be improved. It should,
however, be taken into account that the project is a local development with mainly
members of the community of Dendê and employees and students of UNIFOR being
involved in the project, which could explain the unawareness about the project in the
immediate vicinity.
5.4.4 Optimization Ideas
For each of the subject areas, namely production site, production process, and
external perception of the project, appropriate optimization ideas were formulated
and described.
• Production site: When contrasting the findings of this paper with the research
done by Nyati, Sardar, and Jaybhaye (2017), it can be concluded that a modified
layout of the floor can bring about an improvement in productivity. The results
found that in the case of the workshop the multifunctional utilization leads to
an overlap of the individual tasks. Through a more efficient storage system that
uses the limited available space, a fixed production process can be achieved, by
using the freed-up space for regular, organized production steps. A proper storage
system would then use not just the length and width of the available space, but
also its height.
• Production process/productivity: Using the Six Sigma and Lean Management
methods to analyze and eliminate production steps that do not create value, as well
as stabilize the production process, the workflow can be newly designed so that the
individual production steps do not overlap and do not result in unnecessary pauses.
As a result of the modified workshop layout and the optimized production steps,
the productivity is estimated to increase by 5–10%, as Brill (1992) suggested.
When incorporating the concepts of Lean Management and Six Sigma into the
project’s production process, it is vital to consider whether both approaches are
mainly in use in larger production processes of corporations and businesses to
optimize productivity. For social projects such as the one in Dendê, both concepts
should be tailored accordingly.
88 R. Vivekananthan
To monitor the improvement in productivity, the introduction of regular working

hours, e.g., twice a week, for four hours daily, would make it possible to calculate the
effectiveness of the production, in order to keep track and continuously improve the
production’s performance. With these precise calculated figures, the selling prices
of the products can be optimized because, without a precise calculation, the selling
prices are randomly determined. Optimizing the prices of the products is important
because, with the revenue from the sales, the overhead costs from the project can be
covered.
Consequently, this would facilitate the realization of the projects desired objec-
tive, namely the introduction of the project’s product onto the market. The boosted
employee satisfaction would increase the likelihood of additional team members
staying part of the project for a longer time.
• External perception of the project: Through the use of social media, the external
perception of the project can be optimized and the potential for winning and
binding more customers can be tapped into. Berad (2011) suggests the use of
media, in order to create awareness about social responsibility projects among the
general public. In his paper, he analyzed the obstacles that CSR initiatives face in
India. Yet, the suggestion of using media to spread awareness about social respon-
sibility projects can also be applied to the project of this paper. Further, Berad
identified, among others, a lack of community participation in CSR activities of
companies as a hindering factor to their wider reach. He attributes this to improv-
able knowledge about CSR. This has also been found to be true for the community
and project in Dendê. Ali, Bicho, and Jimenez-Zarco (2015) collected data from
Pakistan, and their analysis found social media to be important in spreading the
awareness about CSR activities. To increase the knowledge about CSR and the
project’s level of awareness, social media would be of great benefit, as it is cost-
effective, and in relation to the relatively low cost, it has a huge reach far beyond
local and municipal levels. In specific, social media would have a greatly benefi-
cial effect on the project’s social capital-improving performance, as it would help
to build a social network that would not just be limited to the community of Dendê
and surrounding districts. The results of this paper are in line with the findings of
Berad (2011) and Ali et al. (2015), namely that one of the important obstacles for
social responsibility initiatives to be achieving their objectives is the improvable
public awareness about it. The research of this paper also agrees with both that to
improve public awareness about CSR media or social media would be a solution.
To name specific applications (apps), there are WhatsApp, Facebook, and Insta-
gram. These apps were randomly chosen because all three apps support the prolif-
eration of information and have several other functions, e.g., the options to create
groups for specific target audiences and themes, dissemination of information about
activities as well as online polls. While a further inquiry may be needed to establish
the accessibility of the local population to the mentioned social media, however, it
can be assumed that in a digitalized world most of the local population would be
connected to the named Social media applications, in one way or another.
5.5 Discussion and Conclusion
By bringing the members of the community together, social relations are opti-
mized, and community members acquire the benefit of a social network (Nahapiet &
Ghoshal, 1998). The bonding between members of the community through collective
work is the relational part of the three components of social capital. The key char-
acteristics of relational social capital, namely the level of trust, friendship, and the
forming of social relations, are improved through bonding between the community
members (Lee, Arnason, Nightingale, & Shucksmith, 2005). The collective work also
affects the cognitive social capital, by promoting a common understanding among
the individuals. The common understanding and communication enable the sharing
and exchanging of knowledge among the members of the community, resulting in
the improvement of human capital (Lee, Arnason, Nightingale, & Shucksmith, 2005;
Diop et al. 2013). As a result of the improvement of human capital, in other words,
the self-improvement that team members can experience and notice on themselves
and the benefits of the project can be realized and this too, in addition to the building
of external social ties, can contribute to the improvement of the project’s appeal.
This again can result in additional team members being won and committing their
long-term involvement to the project. Other community members may then see the
benefits the project has to offer to them and are more likely to become team members
themselves.
The development of trust, value systems, and social ties facilitates individual
actions, leading to the development of human capital. Through newly made contacts,
which are enabled by the project, the acquisition and exchange of knowledge are
made possible (Nahapiet & Ghoshal, 1998). Human Capital is not just improved via
the knowledge acquisition and transfer within the community through “bonding”
or in other words internal social ties, but community members are also given the
opportunity to build and expand their own network outside of their community,
defined as external social ties or “bridging.” The building of external social ties
to other social networks-other communities, institutions, and social projects-would
enable community members to acquire knowledge and the exchange thereof through
new social conduits. The interview also revealed that another hindering factor to
the further development of the project is the reach of the project beyond Dendê and
undeveloped network, respectively. This was affirmed during the execution of the
poll, demonstrating that the project was not particularly known even in the immediate
vicinity of Dendê.
To expand the customer base, it is vital to improve the knowledge about the project
in the immediate vicinity of Dendê and in the long term beyond that, which would then
allow for a stable source of revenue. It was discerned that insufficient revenues cause
a compromised production process, which by extension also affects the productivity.
Specifically, insufficient funds also make it more difficult to cover the costs for the
materials, which are necessary for the production. This, in addition to the improvable
work environment, was found out to affect the team members’ motivation; because
due to the compromised production process, they have less work to do. This fact
90 R. Vivekananthan
was reinforced by the answers given during the interview, suggesting that increased
revenue from the sales of the product could be used to cover the overhead costs
of the project and thus being an optimizing factor to the compromised production
process. Furthermore, during the interview, it was found that the group discerns
financial issues as the main problem and said that a solution to this would be to win
new team members, increase the production volume, and facilitate more sales of the
product, generating finance to stabilize the revenue for the materials. Eventually, it is
to be expected that when new team members are willing to stay part of the team and
the community members of Dendê recognize the social and economic opportunities
the project is able to open up to them, a stable customer base and thus a steady
source of revenue would make it possible in the future, for the community to take
the initiative and learn to help themselves and consequently gain greater autonomy
in the socioeconomic development of their own community. While an autonomous
development is ultimately one of the objectives, at the same time, the importance of
leadership should not be disregarded.
During the two-part interview with a board member, it became clear that lead-
ership is a characteristic of human capital (Wang et al. 2015). The reason for the
ability to motivate the team can be explained by optimal social capital, which is built
on trust, shared values, and collective action. Motivation is an important factor in
recruiting and keeping new team members. Motivated employees influence the work
atmosphere in a positive manner and a lack of motivation compromises the atmo-
sphere, especially when it comes to volunteer work. A positive work atmosphere is
crucial for recruiting new team members. The appeal of the project on the community
of Dendê and the attraction of new team members are capable of improvement. To
win and keep additional team members for the long term, motivation and a positive
work atmosphere play a key role. Besides motivation and a positive work atmo-
sphere, optimal internal ties are vital to strengthen the cohesion within the team
as well as in the community. The presence of these characteristics leads to social
and economic development via the improvement of social capital. The progress of
the social and economic status quo, in turn, leads to an increase in motivation and
productivity (Loury, 1976). The betterment of the economic and social status quo
would not only lead to an increase in motivation and productivity, but it would also
strengthen the project’s appeal on the community and this, in turn, would lead to the
attraction of additional team members. This interaction of social capital, motivation,
and productivity can be discerned from the answers given by the board member.
Specifically, the finding suggests that in order for the project to attract more team
members and increase its production volume, the promotion of both social capital
and human capital would be of significant importance. A newly structured work-
shop would improve the human capital of the project, through a more structured and
coordinated production process. This would have two crucial effects, namely, on the
one hand, the team members would increase their production volume due to simpli-
fied and standardized process steps. On the other hand, the increased production
volume would expand the project’s level of awareness and thereby attract more team
members. In a structured work environment, new team members are more likely to
become permanent members of the project, than in an unstructured work environ-

ment. The project members’ desire is that the project’s development should have a
positive effect on Dendê and that many community members should benefit from
it. While the main goal of the project is to improve the social conditions in Dendê,
it was also stated that it is also an aspiration of theirs to be a signpost for other
socioeconomically challenged communities, with the intention for them to adopt the
project’s concept for their own community’s benefit.
When the factor of improvable appeal of the project is addressed, it is equally
important to find a solution to the accommodation of additional team members. This
was learned during the internal operation analysis of the workshop, namely, that the
workspace of the workshop can be used in a better optimized way. To tackle this
obstacle to accommodating new team members, as well as optimizing the produc-
tivity, a Lean Management approach and a Six Sigma thought should be implemented.
This would allow for better use of the available workspace. The Lean Management
approach is meant to eliminate unnecessary production steps (Kobus & Westner,
2015), while the Six Sigma approach can analyze the process steps and eliminate
process defects and thereby stabilize the production process (Takao, Woldt, & Bento
da Silva, 2017). Lean Management in tandem with Six Sigma can warrant an opti-
mized production process. The application of the methods of Six sigma and Lean
management solely applies to the actual production process. A direct connection to
the development of human capital and social capital is not intended. However, the
implementation of both concepts can give the team members a common denominator
on which they can jointly work and thereby strengthen the internal ties. In the ideal
conception, the team members, through their direct participation in the improvement
of the project, will learn to be more proactive and become autonomous. More impor-
tantly, the layout of the workshop can be restructured around the team members’
needs, while carrying out the process steps, so that the productivity and the team
members’ satisfaction are maximized (Stallworth & Kleiner, 1996). Having said
that, a prerequisite for these suggestions to be applicable is the consideration of the
conditions of a socioeconomically challenged community in an emerging economy.
Research on social projects such as the one presented in this paper is scarce,
especially in the context of developing countries. The thorough research done by
Berad (2011) analyzed social responsibility activities in another emerging economy,
namely in India and can therefore be applied to conditions in Brazil to a certain extent.
Previous studies by Dobers and Halme (2009) demonstrated that research on CSR,
which is mostly based on Western notions, may not always be compatible with local
circumstances of developing countries. As opposed to the research done by Dobers
and Halme, which examines Social Responsibility in developing countries from the
businesses’ point of view, this paper looks at it from the community’s and the actual
project’s viewpoint. Similarly, Ward, Fox, Wilson, and Zarsky (2008) found that
there is not a single predefined approach to social responsibility around the world
and rather should be adapted to local preconditions. Therefore, the circumstances
in Dendê should be taken into account when considering and implementing the
identified optimization proposals of this paper.
92 R. Vivekananthan
If the suggested optimization ideas were to be integrated into the project, while
tailoring them to the circumstances in Dendê, it could lead to a 5–10% increase in
employee productivity (Brill, 1992) or to a 4–10% increase (Clements-Croome and
Li, 2000), in addition to an increase in public awareness about the project.
To conclude, an optimized work environment and the implementation of new
ideas facilitate the self-improvement of the involved individuals. Since socioeconom-
ically challenged communities and regions tend to have a high population density,
minor development steps could have major impact and lead to a real and perceivable
development in the living conditions and result in the improvement of the Human
Development Index.
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Chapter 6
The Theory of Attachment in Contexts
of Public and Social Marketing: Study
of the Program “Portugal Sou Eu”
Ana Cardoso and Bruno Sousa
Abstract The brand has an identifying function since it allows to differentiate the
products and/or services existing in the market, through a name, term, sign, and
symbol, or a combination of all these elements. The identity of the brand can be
adapted according to the needs and desires of its target audience, in order to foster
recognition and create an emotional link with it. This cognitive and affective bond
is called the attachment theory, and it is defined by the attachment between an indi-
vidual and a brand, in such a way that, when the connection is strong, it will see
it as an extension of itself, being part of its characterization. In the context of this
study, we will also analyze public and social marketing focusing on the “Portugal
Sou Eu” program, an initiative of the Ministry of Economy. This initiative aims to
support and stimulate the national supply, aiming to promote the informed consump-
tion and valorization of Portuguese products and services, with the aim of increasing
competitiveness and job creation in Portuguese companies, especially in small and
medium-sized enterprises. Based on a totally qualitative approach, this study intends
to analyze the influence of the theory of attachment at the time of purchase, noting
if there is predisposition of the sample to consume products of Portuguese brands
adhering to the program, instead of others of different origin. For this proposed, was
realized a focus group (10 participants) with portuguese consumers, three face-to-
face interviews with affiliated companies (Minhofumeiro, Life in a Bag and Marsil),
another by e-mail (Nacional) and an interview with the entity responsible for coor-
dinating the program (Associação Empresarial de Portugal). The results suggest that
there is low recognition of the brand “Portugal Sou Eu” and, consequently, the affec-
tive bond, by the consumers, proved to be weak, with a prioritization of the price.
The business fabric pointed to the lack of bet on strategies of dissemination that fit
the type of business of each company and allow an increase of its notoriety, as for
example, the lack of presence in international fairs.
A. Cardoso (B) · B. Sousa

Polytechnic Institute of Cavado and Ave, CiTUR and UNIAG research member, Barcelos, Portugal
e-mail: anacardoso_5258@hotmail.com
B. Sousa
e-mail: bsousa@ipca.pt
https://doi.org/10.1007/978-981-15-6366-9_6
96 A. Cardaso and B. Sousa
Keywords Attachment · Brand · Public and social marketing · Recognition
6.1 Introduction
Portugal and its economy are currently experiencing a phase of re-emerge from
a serious economic crisis that has shaken not only this country, but also most
European countries. The markets resented this negative phase, causing the popu-
lation to lose some purchasing power, especially in Portugal. Due to the decrease in
purchasing power, the price sensitivity of consumers increased significantly, meaning
that concerns about the valuation of domestic production were in the background.
However, we have seen, mainly in the last year, a recovery of the markets and,
consequently, a slight increase in purchasing power. As such, the motivation for
choosing this theme finds its justification on this point. The aim is to understand
the role of affectivity in Portuguese products by studying the possibility that the
Portuguese are currently willing to spend a higher monetary value in exchange for
national products and/or services covered by the “Portugal Sou Eu” program.
Thus, it is intended to understand the attachment phenomenon in a context of
public and social marketing, analyzing the affectivity to the previously mentioned
program, having as reference that, as Thomson et al. (2005), cited by Malär et al.
(2011), the feelings that a brand has the ability to generate may be decisive to
differentiate it from another competitor.
This study intends, in a general way, to understand the affectivity to Portuguese
products, studying the decision process of purchase through the study of the case of
the national program “Portugal Sou Eu.”
Considering that the research problem of this study is defined by the research
question: “What is the role of attachment theory in the purchasing decision process
in public and social marketing strategies: ‘Portugal Sou Eu’ program?” The following
are the detailed objectives guiding the research:
• Understand the role of attachment theory in public and social marketing strategies,
such as the strategies implemented in the “Portugal Sou Eu” program.
• Understand the role of attachment theory in increasing affectivity to Portuguese
products, as well as the possible effects on the intention to purchase products
covered by the above-mentioned program.
• Analyze consumers’ perception of the “Portugal Sou Eu” program (recognition,
notoriety) and, consequently, their predisposition to consume products of the
program’s brands.
• Understand the view of member companies in relation to the program, taking into
account their experience.
• Understand how the promotion and dissemination of the program, carried out by
the responsible entity, is considered.
6 The Theory of Attachment in Contexts of Public … 97
6.2 Literature Review
6.2.1 The Brand
The evolution of marketing also brought with it the development of the brand concept,
whose interest lies in perceiving ways to influence consumer behavior, as Ruão (2017)
states.
“According to the American Marketing Association (AMA), a brand is a name,
term, sign, symbol, or design, or combination thereof, for the purpose of identifying
the goods and services of a seller or group of sellers and differentiate them from those
of competition”. Ghodeswar also enhances the identification function by stating that
a trademark “is a distinctive name and/or symbol (such as a logo, trademark or
packaging design) with the intention of identifying the goods or services of a seller
or a group of sellers, and to differentiate those products or services from competitors”
(2008, p. 4).
As Wood (2000) points out, the brand adapts its identity or image according to
the needs and desires detected in its target audience, using, for this purpose, the mix
and marketing: product, price, distribution, and promotion. The author adds that the
degree of brand loyalty will be determined by the success or failure of the strategy
adopted. To be efficient and to deliver positive results, a brand identity must be in
tune with its customers, differentiate the brand from competitors, and represent what
the organization can do and effectively do over time (Ghodeswar, 2008; Aaker &
Joachimsthaler, 2012). In this way, it becomes necessary to understand the process of
identification by the consumers, more specifically the process of insertion in certain
social groups. Thus, according to Morales et al., there are three main components:
1. Individual processes;
2. Group processes;
3. Macro-social processes.
Individual processes are defined as personal motivation and the importance given
by individuals to inclusion in a specific group. In turn, the group processes result
from the comparison, on the part of the individuals, between different groups, in view
of a positive social differentiation. As far as macro-social processes are concerned,
these refer to the social context in which people are involved, a context that makes
possible the realization of the comparisons mentioned above.
This way, it is possible to affirm that “people feel a need for a social identity”,
preferably positive. This same social identity is related to the emotional ties, that is,
the individuals are inserted in social groups in which they intend to develop these
affective bonds (Heere & James, 2007; Kuenzel & Halliday, 2008; Lisjak et al.,
2012). However, the social identity of people can change, being flexible according
to their evolution in personal and professional terms. According to several authors,
social identity may change in relation to four perspectives (Wann & Branscombre,
1993; Brewer & Hewstone, 2004). They are
1. Intensity/value of individuals’ participation in a group over time;
2. Valuing the participation of a particular group;

3. Importance of being part of a particular group;
4. Changing the role of people in groups.
Therefore, there are four dimensions, described below, which stand out in order
to understand the process of demonstrating identification with the brand.
1. Cognitive structure
2. Affective element
3. Evaluation aspect
4. Behavioral aspect
The cognitive dimension refers to individuals’ knowledge about a brand, resulting
from their own experience or from others (Underwood et al., 2001). This knowledge
derives from the experiences of individuals with the brand, the way they identify it, the
image they have of it, the reading of their values, and the perception of the influence
it exerts on their lives (Burgess & Harris, 1999; Brewer & Hewstone, 2004). In the
case of the affective dimension, we combine the rational and emotional elements that,
together, direct the entire buying process. According to Escalas & Bettman (2005),
consumers build links between the brands they choose and the definition of their self-
concept. These connections develop through the affinity between consumer identity
and brand elements, as referred to in Sirgy’s theory of self-congruence (1982, 1986).
Regarding the evaluation, according to Ashmore et al. (2004, 83), this aspect refers to
the “positive or negative attitude that a person has in the social direction in question.”
This attitude can be influenced by two distinct judgments: the private and the public.
In the case of the former, it is a question of how the individual sees himself and, in
turn, the latter relates to how others understand the individual (Heere & James, 2007).
The evaluation has the capacity to reinforce the recognition and social identification
of the individual. Regarding the fourth dimension, the behavioral aspect refers to the
“level at which a person engages in actions that directly imply the identity of the group
of the category in question,” according to Ashmore et al. (2004, p. 83). Thus, this
dimension is related to individuals’ interests, as well as their ability to differentiate
between brands and their willingness to express the level of involvement with a brand
(Burgess & Harris, 1999).
In his work, Kapferer (1991, p. 55) states that “any brand acquires through the
accumulation of its communications a history, a culture, a personality, a reflection.”
So, after the strategy diagnosis of a company is made, it becomes possible to deter-
mine the identity of a brand by constructing its identity prism. This type of diagnosis
came about through the “Brand Identity Prism” model created by Kapferer, which
has six facets: physics, personality, relationship, culture, reflex, and self-image. This
model has helped in the recognition of human characteristics to brands, a process
that can be explained by the fact that, as Aaker points out, consumers often absorb
the marks and their symbolic meaning when they present traits of human personality.
Vieira shares as well the same perspective, stating that the brand is seen and treated as
if it were really a human being, which is conferred human traits and characteristics.
The prism under study, which demonstrates the characteristics that a brand must
consider to be able to construct and manage its identity, is being analyzed below:
• The physical characteristic refers to the physical, tangible elements of the marks.
According to Kapferer (2008), this is the basis from which brands should develop.
• All brands have a personality, adopting characteristics, and personality traits that
are typically human.
• The relationship is built through the interaction between brands and consumers.
• Brands have a culture, that is, they behave through certain principles and values.
• Brands should reflect the characteristics appreciated by their consumers, trans-
lating into the image they intend to use when using the same brands.
• The concept of self-image refers to how consumers feel when they are in contact
with brands, that is, how they see themselves by using certain brands.
Regarding brand architecture, it is equally relevant to analyze the concept of brand
positioning. So, as Ruão (2017, p. 44) mentions the “brand positioning corresponds
to that part of the identity that must be actively communicated to audiences.” Castro
refers to the positioning as being “the distinctive perception of the brand that we seek
to create in the consumer spirit.” In the same sense of this perspective, the positioning
is related to “how the brand is intended to be known” form Once a position has been
put in place, a brand must be able to execute it and, as Aaker (1996, p. 186) states, it
is necessary “a brilliantly executed communication program opens the way, hitting,
entertaining or involving the audience.”
The image of the brand is another element of great importance, also referring to the
architecture of the brand, according to Sousa & Vasconcelos who consider the image
as “one of the most important and influential instruments of branding, representing
the association that it makes to the product” (2018, p. 7). According to Leão & Mello,
the image translates the perspective on the value of brands that, in turn, is oriented
toward the consumer. In this sequence, when the brand is able to engage consumers
and create an emotional relationship, it becomes important to realize the value of
the brand, taking into account that these brands “are considered as links between
products/companies and their customers” (Brito, 2010, p. 49). These connections
come from building a culture driven by a lifelong commitment to mentoring and a
way of life that requires time, planning, and persistence. This process will bring the
desired value that the brand seeks, resulting in increased customer satisfaction and
loyalty, less price sensitivity, fewer customer dropouts, increased customer base, and
brand referrals. (Ghodeswar, 2008, Baumgarth & Schmidt, 2010).
Thus, with the awareness of the importance that the reach of the value represents
for both the brands and the consumers, it is advisable to deepen the concept of
brand equity. According to Aaker (1996), brand value, or brand equity as already
mentioned, is defined as “a set of assets and liabilities associated with a brand,
its name and symbol, which are added or subtracted from the value provided by a
product or service to a company and/or its customers” (1991, p. 15). In this regard,
and considering that the assets and liabilities referred to may vary depending on the
context, the author has grouped them into five categories:
1. Brand Loyalty
2. Awareness of the name
3. Perceived/recognized quality
4. Brand associations other than perceived/recognized quality

5. Other brand-owned assets—patents and trademarks.
Looking more closely, with regard to brand loyalty, Aaker (1996) states that,
whatever the business area, it is more costly to win new customers than to keep
existing ones, “especially when existing customers are satisfied with—or even like—
the brand” (1991, p. 19). The loyalty to a brand is defined by the preference that
consumers demonstrate for that brand to the detriment of competing brands. Also
considering Jung & Sung’s (2008) perspective, brand loyalty from the consumer point
of view is the dimension that most positively influences the intention to purchase a
particular brand. As for awareness of the brand’s name and symbols, the importance
of familiarity is emphasized, because, according to Aaker, “people often buy a family
brand because they are comfortable with the relative” (1991, 19). Indeed, brand
awareness can be measured by the consumer’s recall of the brand (Pike et al., 2010).
Regarding the perceived quality factor, this concept influences not only loyalty to
the brand, but also in the moment of the purchase decision and, similarly, helps in
the acceptance of a premium price. In addition, quality recognition may be “the
basis for brand extension,” because it is assumed that if a brand succeeds in one
context, then it will also avenge in another related context (Aaker, 1996, p. 19).
From the point of view of consumers, Pappu et al. (2005) and Low & Lamb (2000)
consider that the perception of quality adds value to these, as it allows them to create
differentiations between brands, as well as to define reasons to choose to decide for
a specific brand. The value of a brand may also be linked to the associations made
to it since a strong association may form the basis for a brand extension. Brand
associations are decisive in the process of brand enhancement since, in terms of
the brand, they help it to differentiate, to define its position and can form a solid,
previously mentioned, extensions. On the other hand, from a brand’s point of view,
a positive image can contribute to generating trust and, consequently, a positive
attitude (Delgado-Ballester, 2004). The strength, exclusivity, type, and positivity of
the associations in question make it possible to differentiate between brands (Keller,
1993).
In the case of the fifth category, branded assets, such as patents and trademarks,
“will be more valuable if they inhibit or prevent competitors from eroding their
customer base and loyalty” (Aaker, 1996, p. 21).
6.3 Attachment
The attachment theory has been studied by several authors. The author Bowlby
(1982), in a pioneering research on parent-child bonding, has defined attachment as
a bond of emotion between an individual and a specific object. This bond can differ
in strength, with some individuals likely to exhibit a weak bond with one object and
others, in turn, may exhibit a strong bond.
Many authors point out that consumers can create a connection and feel affection
for offers (Mick & DeMoss, 1990), collection articles, places of residence (Hill &
Stamey, 1990), and even brands (Schouten & McAlexander, 1995). Belk (1988) and
Fournier (1998) also point out that in the context of marketing people can maintain
emotional links with brands, complementing also that the brand attachment consists
of the affective bond that connects the consumer to brand, nourishing feelings for it.
Thus, starting from the existence of an emotional connection between individuals
with a brand, the attachment is defined as being the strength of the cognitive and
affective bond between the brand and the individual. We are faced with a concept
that, according to Park et al. (2008), may mean when the affective and cognitive bond
is strong, the brand is perceived as an extension of the individual’s self, forming part of
its own characterization. According to Malär et al. (2011), the more the brand reflects
the ‘I’ of the consumer and the greater the emotional connection felt between the ‘I’
and the brand, the stronger the link and the more affection it will feel for the brand.
This strong link between the individual’s brand and “self” leads him to want to display
the brand and, also, wants to be part of consumer communities that demonstrate the
same emotional connection to the brand.
It should be noted, according to Park, et al. (2008), that these behaviors of
emotional connection between the consumers and the brands must be analyzed with
attention by the marketers since they look for results of interest for the brands, as for
example, the loyalty to the mark, the willingness to pay more price, mouth-to-mouth
advertising, and willingness to forgive the brand for possible setbacks. These compo-
nents are positively related to the high value of a brand and may even be decisive
so that it can, for example, practice a premium price. Thus, according to Scales and
Sprott et al. (2009), the greater the level of identification as evidenced by consumers
in relation to a brand, the more favorable their attitudes will be, the more attention
they will give to the information disclosed, and the greater the commitment made in
relation to it.
Through the research of Malär et al. (2011), there are four factors to be considered
by marketers when attempting to increase brand affectivity. They are (1) to include
consumer interests in brand decisions, (2) to highlight the authentic brand charac-
teristic, (3) to reassess the diffusion of aspirations, and (4) to individualize brand
promotion and communication efforts, based on the consumer’s perspective. These
authors demonstrate that brand managers must now bet on the construction of the
personality of brands so that it is compatible with the ‘I’ of the consumers, as they
will show similarities between themselves and the brand making it easier to creating
a strong emotional link. They also stress that brands should not raise aspirations
too much, as it can be considered as lack of authenticity, leading to a decrease in
affectivity by parts of consumers. They also point out the importance of collabora-
tive branding, allowing consumers to contribute to building a brand personality that
matches their ‘I’.
Therefore, it is now important to understand its cause. At this stage, it is important
to understand the process that leads a person to feel affectively connected with a
brand and/or product, gaining a place in their memory. Thus, according to Park, et al.
(2008), there are three resources that can lead to the construction of affection and
the emotional link, and they are the hedonic, social, and functional resource. The
same can be used simultaneously, always with the objective of complementing the
‘I’ of the consumer. Effectively, a brand can make use of aesthetic/hedonic elements
with the objective of generating satisfaction and pleasure, being able to immediately
change the mood of the consumers, through a combination of sensorial experiences,
as pointed out by Park, et al. (2008). The authors also point out that brands that possess
this ability can divert negative thoughts and external incentives to the consumer’s
self and to their enjoyment, and that the coordination of the sensory elements of a
brand is particularly important to evoke an emotional connection between the ‘I’ of
the consumer and the same. It is also exposed by the authors, another possibility
that involves the enrichment of the ‘I’ of the consumer, by the brand, through the
symbolic representation of the past, present, and future idealized by it. In relation
to the past, brands can promote a sense of security and comfort by representing
the consumer’s past, acting as a kind of anchor. Park, et al. (2008) report that these
brands can evoke feelings such as nostalgia and satisfaction while maintaining a
sense of continuity. Next, the present also has its role, and the brands can represent
the consumer’s current self, reflecting who he is and what he believes. As far as the
future is concerned, brands will be able to portray the consumer’s future ‘I’, reflecting
their future aspirations and hopes. Following the exposition of the hypotheses, the
authors also affirm that emotional attachment can be achieved by the ability of the
brand to create a sense of efficacy in the consumer, in such a way that the consumer
has control over the environment that surrounds him, leading him to achieve the
desired objectives. Finally, the authors believe that for brand attachment to exist, it
is crucial that consumers perceive the brand as being reliable and believe that it is
sensitive to their needs, allowing it to be perceived as an extension of the consumers’
self.
To conclude, Frasquet et al. (2017) show that the brand attachment, because of its
strong emotional connections that define it, can predict the intention and willingness
of a consumer to get involved with a specific brand. The confidence increases the
affective bond, discouraging the consumer from abandoning the relationship with the
brand and increasing the consumers’ willingness to pay a premium price (Thomson
et al., 2005).
6.4 Public and Social Marketing
Social marketing directs your concerns to society. According to Kotler, it is defined

as the design, implementation, and control of programs that aim to increase the
acceptance of an idea and/or social project in a target group. Through a study by
Araújo (2011, p. 79), it is also possible to define social marketing as a way of
strategically managing support for social change in the cause of relevance in the
public sphere, seeking to realize the rights of citizens, “from the ethical practice of
conduits appropriate for themselves and with others.”
However, Andreasen (1994) points out three problems with the above definition.
In the first place, he argues that choosing the term “social marketing” could lead
people to confuse with societal marketing. Societal marketing, as opposed to social
marketing, seeks to protect individuals through market control, and thus does not
deal with actions for behavioral changes, as in the case of social marketing. Then, as
Andreasen (1994) points out, in relation to the second problem, there was a discussion
in order to make it clear if the practice of social marketing would be limited, or not,
to the public sector and to non-profit organizations. The third problem was that the
definition limited the purpose of social marketing simply to the acceptability of social
ideas.
Andreasen (1994) proposes a new definition of social marketing in which he
argues that social marketing is based on the adoption and adaptation of commercial
marketing technologies to programs designed to influence voluntary behaviors of its
target audience, in order to improve their own welfare and the society of which they
are a part. It should be noted that Andreasen (1994) stresses that the concern and
purpose of social marketing is behavior change.
Combined with the concept of social marketing, there is the idea of social respon-
sibility. Levek et al. (2002) goes further and even considers social marketing as a
consequence of social responsibility, arguing that “they depend intrinsically on each
other” (p. 23). Social responsibility is defined as the “duty and commitment of the
company to assume a transparent, responsible, and ethical attitude” in the relations
that it maintains with its target group. Mohr et al. (2001) argue that social responsi-
bility actions have positive effects not only for companies, but also for individuals
who benefit from them. According to several authors, the company’s sponsorship
of certain social actions positively stimulates the purchase decision (Andrews et al.,
2014; Sen & Bhattacharya, 2001) to invest in companies (Sen et al., 2006), posture in
relation to firms (Zdravkovic et al., 2010) and word of mouth (Skarmeas & Leonidou,
2013).
Thus, considering the consumers’ point of view, as supported by Kamiya et al.
(2018), when they identify with the social cause sponsored by a brand, their will
and intention to participate and help increases. It is also noted that many people find
these products more convincing than their competitors who do not support any social
cause (Levek et al., 2002).
However, as pointed out by Becker-Olsen et al. (2006), social responsibility
actions can also have negative consequences. Consequences that, according to
Vlachos et al. (2009), may be due to the fact that consumers do not understand
the reciprocity character associated with social responsibility actions and associate
the involvement of companies in these actions for opportunistic purposes.
Public marketing, as its name implies, is related to public entities, strategically
used by governments. Within public marketing and its strategies, all initiatives aim
to promote programs/initiatives/causes in favor of civil society. It can be considered
that the target public is the population in general since its purpose is to serve the
purposes of the same. In a broader sense, public marketing is defined as a public
sector strategy whose objective is to ensure that the public receives the attention it
deserves, as Epstein points out. However, it is possible to define this practice more
narrowly. Thus, according to Velas & Bocigas, public marketing includes a variety
of techniques that are used by central, regional, or local administration with the aim
of getting citizens to adopt a certain behavior.
In summary, synthesizing the concept, public marketing deals with activities,
carried out by organizations that constitute the Public Administration, that aim to
satisfy social needs. (Santesmases, 2004).
6.5 Program “Portugal Sou Eu”
6.5.1 Contextualization and Mission
The program “Portugal Sou Eu” is an initiative of the Ministry of Economy, approved
by the Resolution of the Council of Ministers 56/2011, designed to be particularly
addressed to SMEs, and aims to boost and enhance the national offer through an active
brand that represents the national production. The main objective of this program
is to increase informed consumption and foster the valorization of national supply
through the involvement of all civil societies, increasing competitiveness and job
creation in Portuguese companies, especially Small and Medium-sized Enterprises
(SMEs).
The “Portugal Sou Eu” initiative is available to any citizen and/or entity, and
there are various forms of participation, broken down on the program’s website. The
project under study is intended for all end consumers and needs to be sensitized by
promoting and identifying the origin of products and services, providing informed
and sustainable choice of consumption. It is also important to include SMEs in the
primary, secondary, retail, and catering sectors, as for them there are advantages and
benefits of joining the “Portugal Sou Eu” network of companies. Finally, the program
in question also includes large companies and large retailers and institutional buyers.
These are sensitized to the promotion of supply and demand platforms that facilitate
interaction with national SMEs.
Always aiming at enhancing national identity, promoting conscious consumption,
and fostering the competitiveness of Portuguese companies, the program has strategic
and operational objectives.
Regarding the strategy, the “Portugal Sou Eu” program was designed to stimulate
the economic recovery of the economic fabric, making it more competitive, always
with a view to enhancing the national supply. By boosting the market, it is intended
to assist companies so that they are able to increase their export potential.
Nowadays, this program has been gaining more importance, as exemplified by
the two agreements reached between Associação Empresarial de Portugal (AEP),
the coordinating entity, Makro and the SONAE MC group. These two agreements
aim to include products with the “Portugal Sou Eu” seal, in order to encourage
consumers to buy them. Still in relation to the context, through contact with the
company Nacional, another company whose adhesion to the program is also recent,
there are advantages related to the reinforcement of portugality provided by the seal
acquired in the adhesion.
6.5.2 Initiatives
Thus, through the website of the program under study, the initiatives related to the
member companies refer to their mobilization, using various activities of member
mobilization such as visits, meetings, workshops, and seminars, in order to clarify
the companies about membership of the “Portugal Sou Eu” seal and its requirements.
Focusing now on initiatives aimed at consumers, the program under analysis also
develops several actions that favor the adhesion to “Portugal Sou Eu.” Therefore, the
first initiative concerns the dissemination of information through the portugalsoueu.pt
portal. In this portal, the qualified products and services “Portugal Sou Eu” are
disseminated and on social networks and through smartphones, shows in each place
where the same products, services, and participating establishments can be found.
Another initiative relates to the use of prescribers in the promotion of “Portugal Sou
Eu.” In other words, some personalities from the most different spheres of society,
designated as “Portugal Sou Eu” ambassadors, are used, who contribute publicly
to boost the brand, promoting the initiative and promoting the informed choice of
products and services that adhere to their activities.
6.6 Methodology
This project will follow a qualitative approach that, according to Godoy (1995), is
essentially concerned with the study of the analysis of the empirical world in its
natural environment, being that the researcher comes in direct and prolonged contact
with the environment and the problem under study. In the case of qualitative research,
it is sought to study the process, understanding how a certain phenomenon manifests
itself in daily activities, through “the perspective of the participants,” as Godoy (1995,
p. 63) states. In the same line of thought, De Ruyter & Scholl (1998) also emphasize
the importance of understanding how the participants’ thoughts on a given subject
are processed and why they think so. Thus, in the case of the developing project, it
is considered that the qualitative research is the most adequate option, in relation to
the quantitative research since it is intended to understand the possible role of the
attachment in the purchasing decision process of the participants, and not to evaluate
or measure how many people are influenced. Based on Malhotra et al. (2013), this
type of research studies small samples, characterized by not being structured and has
an exploratory nature.
In relation to the sample used in qualitative studies, according to De Ruyter &
Scholl (1998), it is characterized by being small. The authors consider that a qualita-
tive research does not seek representativeness, but rather offers insight into questions
that aim to understand how people think about a particular topic and why they do
so, not answering questions that involve knowing how many people share the same
opinion. Thus, the goal is to achieve the representativeness of the results according
to the theme under study, not the sample participating in the investigation. Having
said that, the sample of this study was then chosen non-probabilistically.
6.6.1 Paradigm
The research has an exploratory character following the constructivism (or interpre-
tive) paradigm since reality is an individual construct and will never be independent
of the researcher’s conscience, considering it is socially constructed and perceived as
a mental construct, intangible, socially, and experientially based, predicting the exis-
tence of multiple realities (Denzin & Lincoln, 2000). In the constructivist paradigm,
the analysis is performed using the narrative to describe detailed and specific reports
about the social reality that is being studied, which, according to Neuman, is called
the idiographic approach.
6.6.2 Collection Instruments
Data were collected through semi-structured interviews with partners and members
of the “Portugal Sou Eu” program and the representative (on behalf of the Ministry
of Economy) of this program. The sample of the interviews conducted was non-
probabilistically chosen; Wahyuni (2012) mentions that this predetermined selection-
based method is known as case selection/organization, so respondents were chosen
based on the criterion convenience to the theme under study.
6.6.3 Focus Group
The focus group method has some advantages, as described by the author Malhotra.
Therefore, the first concerns the synergy created between the participants, resulting
in greater information production. Secondly, there is the advantage of creating the
snowball effect, which is the triggering of reactions and comments from other partic-
ipants after one participant intervenes. Next, flexibility is pointed out, as it is possible
to treat different topics in greater depth. Combined with this, the characteristic spon-
taneity of focus groups is revealed, because participants are free to respond freely
and spontaneously. Finally, the production of innovative ideas is praised since good
ideas are born more quickly in a group conversation than in an individual interview.
In this study, the participants in the focus group were selected, considering the
particular context of the research, concentrating on the criterion that they should be
Portuguese consumers, combining a variety of professional areas, which offered a

more diverse view of the topics addressed, and different age groups.
The script of the conversation was designed according to the objectives of the
research, aiming to discuss the crucial points of the research, but was given freedom
for the participants to talk to each other, which resulted in some changes in the order
of questions and the inclusion of new topics.
6.7 General Conclusions of the Study
The coordinating entity has shown that it is developing a dissemination work in

order to reach the largest number of consumers leading them to join, even registering
an increase in the purchase of Portuguese products frequently between 2014 and
2017, through a study. However, through data collection and subsequent analysis, it
is clear that the same work is still not enough and is not reaching consumers because
consumers, studied in this qualitative research, revealed, for the most part, unaware
of the program, concluding that there is still a need to develop and bet more, by
the bodies responsible for “Portugal Sou Eu,” in the dissemination and creation of
relationship with consumers.
It was concluded that the greatest benefits of the existence of the program and,
consequently, of the work developed so far, as is the case of fairs, events, or even
the use of the seal, are mainly directed to the member companies. This means that
it has not yet been reflected in the attitudes of Portuguese consumers, in order to
make them prioritize the consumption of products with “Portugal Sou Eu” seal at
the moment of choice.
In addition to the need for increased dissemination, consumers pointed to the lack
of identification of Portuguese products in general, for example, in large retailers
and, in particular, of the brands that hold the adhesion seal.
The data collection led to the conclusion that the support provided by the enti-
ties managing the “Portugal Sou Eu” program could be greater. More precisely,
through the interviews conducted, it was found that support should be directed toward
bringing adhering brands into foreign markets and thus increasing their visibility and
possibly their exports through new contacts.
The sample indicated that the events held by the entities responsible for the
program may not be effective since the products are placed in the same stand, mixing,
not giving great visibility to each of the brands and their corresponding products.
There is a lack of bet on the program ambassadors under study. Throughout the
data collection, it was apparent that they should be more active and more frequently
advertise the products and services of the acceding brands, for example, on their
social networks.
In summary, through the study performed, it is possible to realize that the theory of
attachment has no influence, at this time, on the choice, by the Portuguese consumers,
for national products and/or services of brands that adhere to the program under
study by Portuguese consumers. This program needs greater investment by public
authorities in order to reach as many consumers as possible, making them more aware
of the importance of valuing national production. Further recognition of this program
is crucial, for example, including the appointed ambassadors. Their recognition and
public exposure should be enjoyed through publications on their social networks
about the program “Portugal Sou Eu,” for example. Considering the adhering brands,
it can be concluded that there is a need for more support in order to make them able
to increase their exports and gather more contacts abroad, increasing their visibility.
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Part II
Developing Sustainability in the Public
Sector
Chapter 7
Sustainability and Corporate Social
Responsibility in the Perspective of Social
Economy Entities: A Bibliometric Study
Brízida Tomé, Ana Maria Bandeira, Graça Azevedo, and Alberto J. Costa
Abstract We start from the conceptual interconnection between Sustainability and

Corporate Social Responsibility, which, although continuously subject to contro-
versy, both within the scope of its definition and in its performance, advocate, as
the ultimate goal, human development and of the society in general, promoting the
interests of the Communities on a permanent, long-term basis and without compro-
mising the options of the future generations. In this context, we cannot fail to draw
a parallel with the entities that constitute the Social Economy Sector. The activities
they carry out are of economic and social nature and must be pursued in the general
interest of their members, users and beneficiaries, thus in the general interest of the
Community. These institutions also reveal concerns about the sustainability in all the
dimensions involved (economic, social and environmental), in which the organiza-
tional performance is particularly important, as it becomes imperative to guarantee
their continuity, fostering and promoting their social action. We will, therefore, start
by framing what is meant by Sustainability, Corporate Social Responsibility and
Social Economy, with a particular focus on the current requirements of stakeholders
regarding the socially responsible behaviour of the institutions as these, in turn, will
entail the adoption of more comprehensive management tools, also more efficient and
transparent concerning all dimensions (economic, financial and social). It is within
this framework that a project called “TFA—TheoFrameAccountability—Theoret-
ical framework for the promotion of accountability in the social economy sector:
The IPSS case” emerges, being promoted by the University of Aveiro, with the
participation of National Confederation of Solidarity Institutions (CNIS—acronym
in Portuguese), and the Polytechnic Institutes of Coimbra and Porto. This project
aims to promote the accountability of the social economy sector (economic, financial
and social aspects), in the Private Social Solidarity Institutions (IPSS—acronym in
B. Tomé · A. M. Bandeira
Polytechnic Institute of Porto, Porto, Portugal
G. Azevedo (B) · A. J. Costa
Research Centre on Accounting and Taxation, Higher Institute for Accountancy and
Administration of Aveiro University, Aveiro, Portugal
e-mail: graca.azevedo@ua.pt
https://doi.org/10.1007/978-981-15-6366-9_7
114 B. Tomé et al.
Portuguese), assisting them not only in fulfilling their legal obligations, but also facil-
itating the reporting of results of activities carried out in a more effective manner and
promoting transfer of knowledge (for the IPSS and also for the academic community),
thus contributing to the development and sustainability of these institutions. Thus, we
develop an exploratory and descriptive analysis, of a quantitative-qualitative nature,
in which the procedures of data collection determine the result of the search strategy
by the defined descriptors. For this purpose, the analysis will focus on the following
variables: number of articles published per year; methodologies used; theories of
support; identification by sector/area of activity; countries of origin; more represen-
tative institutions; authors who publish more and journals with the largest number of
publications. The main results indicate a growing concern about sustainability and a
growing publication in this area. This paper presents a bibliometric study to evaluate
the main trends of current research on sustainability and on corporate social respon-
sibility, thus contributing to the construction of the theoretical basis underlying the
“TFA—TheoFrameAccountability” project.
Keywords Corporate social responsibility · Governance · IPSS · Social economy

entities · Sustainability · Sustainable development
7.1 Introduction
This work emerges from the new challenges that are posed to the social economy
entities, in particular the “IPSS” (acronym in Portuguese for Private Social Solidarity
Institutions) which, in Portugal, can take on various legal forms, from Associations,
Mutualist Associations, Foundations to Mercies (Portuguese Basic Law of Social
Economy—LBES, 2013).
These entities have great relevance in the national economy, as they develop
relevant social and economic actions, supplying needs not met by either the State
or the Second Sector (LBES, 2013). Their mission is to perform a social function
in the general interest, providing welfare to the community in which they operate,
thus denoting the social responsibility that is an integral part of their genesis (Meira,
2011, 2012).
In the current context, among many of the demands placed on them, these entities
are faced with the issue of sustainability that cannot be neglected, so that they can
continue to carry out their mission properly.
We will begin by giving a brief theoretical framework on the concepts and
definitions of Social Economy, Corporate Social Responsibility and Sustainability.
Nowadays, the demands on IPSS, both in terms of compliance with legal
obligations and Accountability are extremely high.
The duty of transparency required by the State, their main funding source, as by
many other stakeholders with whom they are related (patrons, partners, suppliers,
clients, users/beneficiaries, among others) leads them to have to act proactively and
7 Sustainability and Corporate Social Responsibility … 115
to include all stakeholders in decision-making processes and to disclose their perfor-

mance not only at economic and financial, but also social and environmental levels,
highlighting their socially responsible behaviour (Oliveira & Gouvêa, 2011; Souza
& Costa, 2012).
On the other hand, they face enormous challenges in terms of management and
capacity of the social governing bodies to achieve sustainable development in all
aspects (economic, social and environmental).
Thus, these entities must pursue strategic planning processes, drawing sustain-
able development goals in line with those set at national and international levels,
improving their performance and disclosure in order to promote, ultimately, their
sustainability.
It is in this context that the TFA project arises. The TFA project—“TFA—
TheoFrameAccountability—Theoretical framework for promotion of accountability
in the social economy sector: The IPSS case” is promoted by the University of Aveiro,
with the participation of CNIS (acronym in Portuguese for National Confederation
of Solidarity Institutions) and of the Polytechnic Institutes of Coimbra and Porto.
This project aims to promote the accountability (economic, financial and social) of
the social economy sector, in particular the IPSS—Private Social Solidarity Institu-
tions—assisting them in fulfilling their legal obligations, facilitating a more effective
disclosure of results of activities developed and promoting knowledge transfer (to
the IPSS and also to the academic community), thus contributing to the development
and sustainability of these institutions.
This project proposal is to (i) Facilitate a means for online dissemination of legally
required information and voluntary information covering social and economic and
financial aspects of its activities; (ii) Conceptualize a framework that allows stake-
holders to make this assessment; (iii) Start a yearbook to evaluate the impact of the
performance of the IPSS.
Finally, we carry out a bibliometric analysis in order to evaluate the main trends
of current research on sustainability and on corporate social responsibility in the
social economy sector, thus contributing to the construction of the theoretical basis
underlying the project “TFA—TheoFrameAccountability”.
7.2 Concepts
We start by analyzing the definitions of each of the three major themes of this study,
Social Economy, Corporate Social Responsibility and Sustainability, in order to
establish comparisons and interconnections between them, and place us among the
controversies that exist in these domains.
The definition of the Social Economy, established by no. 1 of article 2 of the
Portuguese Basic Law of Social Economy (LBES, 2013), is that of a “set of activi-
ties freely carried out by social economy entities: Cooperatives, Mercies, Mutualist
116 B. Tomé et al.
Associations, Foundations, IPSS, among others, pursued in the general interest”.1

This law was able to consolidate the concept of the social economy, surpassing
existing controversies (Meira, 2011).
The Corporate Social Responsibility (CSR) was initially defined by the Commis-
sion of the European Communities, on the Green Paper (2001) as “companies
that decide on a voluntary basis to contribute to a fairer society and a cleaner
environment”.
Regarding Sustainability, conceptualized by the UN, in the World Commis-
sion of Environment and Development (UN, 1987), by the Brundtland Report,
“Our Common Future”, is seen as the development that “promotes the satisfac-
tion of the needs of the present generation, without compromising options of future
generations”.
These wide concepts, which are in constant evolution, seem somehow to be inter-
connected, sometimes intersected or, on the contrary, very distant one from each
other, effectively generating difficulties of concise definition or knowledge or, we
would even say, recognition.
Although the concept of Economy has been linked to concerns of citizenship and
common welfare since Antiquity, Social Economy arises in more adverse circum-
stances or extreme crises surroundings, such as the Industrial Revolution, World War
II or several rises of market failures, as the great scandals that occurred in the 90s and
early twenty-first century, among other facts. It should be noted that Portugal’s first
Mercy was founded in the fifteenth century, in Lisbon, to minimize social problems
resulting from the Discoveries, and the first consumer cooperative, was founded in
1844 in Rochdale, England, due to the externalities of the aforementioned Industrial
Revolution. Therefore, one might think that the Economy was becoming something
merely “economic”, focusing only on pecuniary value and could have lost its social
character over time.
In this context, it can be concluded that the associations emerged to fulfil growing
social needs. The main concern of these non-profit associations was the general
interest of the most disadvantaged people, characteristic which shaped the above-
mentioned concept of social economy. They arose because states were neither effi-
cient nor effective enough to develop this “welfare” role, and because the other actors
in society, the companies, had a distinct purpose that focused solely on profit.
In this regard, the activities developed by the social economy entities should pursue
the general interest, and their mission is therefore outlined, essentially focused on
this social object or general purpose (LBES, 2013).
The association between the concept of social economy and the general interest
binds mandatory social economy entities to the adoption of socially responsible
behaviours (Meira, 2011).
The mode of organization and functioning of social economy entities is a reflection
of their guiding principles, designated in LBES (2013): (i) Primacy of people and
social objects; (ii) Free and voluntary membership and participation; (iii) Democratic
control; (iv) Conciliation of interests and (v) Respect for several values: Solidarity,
1 Entities designed on article no. 4 of LBES.

Equality, Social Cohesion, Justice and Equity, Transparency, Social Responsibility,

Autonomous and independent management, Allocation of surpluses to the pursuit of
social economy purposes.
However, these entities simultaneously pursue business and social objectives, on a
complementary perspective (Meira, 2011, 2012), which brings us to the prominence
of business performance, aiming to achieve the goals set in a sustainable manner.
According to Cases—Cooperativa António Sergio para a Economia Social (2019)
“this sector has contributed to social cohesion, combating unemployment, labour
instability, as well as social exclusion among the most vulnerable groups, through
the development of various activities. The social utility of these entities also derives
from their values and principles, based on the promotion of the human person and
the communities, through practices of cooperation, solidarity and social justice”.
The concept of Corporate Social Responsibility (CSR) is also not static and could
not be more comprehensive. It does not ignore any aspect in which CSR may be exer-
cised (social, economic and/or environmental). Hence this concept, Triple Bottom
Line (TBL) (Elkington, 1997) refers to organizations that promote environmen-
tally sound, socially fair and economically viable behaviours, with the resulting
consequences for the conception of the company’s role in today’s economy.
By incorporating in its definition the purpose of contributing to a fairer society
and a cleaner environment, the concept of CSR is highlighting the social and
environmental aspects, although it is now seen from an organizational perspective
(Meira, 2011).
This change of business paradigm—the company open to its external surround-
ings—implies a need for convergence of transparent, responsible and ethical
attitudes, beyond shareholder profit.
Many theories have emerged over time, outlining the company’s role, such as
the Shareholders theory, which aims exclusively at maximizing shareholder profit
(Friedman, 1970), the Institutional theory, which pursues the reconciliation of the
parties’ interests, through mimetic and/or philanthropic actions, still aiming at
the legitimation of the company (Meyer & Rowan, 1977; Dimaggio & Powell,
1983), the Stakeholder theory, reinforcing the growing need for the legitimation
of the company with these interest groups, but introducing social and environmental
concerns (Freeman, 1984) or even the theory of Shared Value Creation, promoting
cooperation and value creation for mutual benefit (Porter & Kramer, 2011).
The great variability of objectives and purposes of CSR, its scope of action or the
many possible modalities for its pursuit generates great controversy. Several authors
argue that the company can exercise CSR in order to pursue sustainability goals and
business success, albeit in a different way.
CSR can be developed at the level of its internal or external environment, as the
company seeks only to improve its organizational culture, or if it intends to improve
intangible values such as reputation and brand, respectively, while aligning these
objectives with the concern to achieve a “socially correct” status (Neto & Froes,
1999).
The social function of the company becomes more prominent through a growing
interrelation with the social, economic and environmental environment and the
118 B. Tomé et al.
company must become socially responsible in all areas of its activity, including the
decision-making process (Torre, 2005; Velasco, 2005).
Another very critical approach, from Heal (2005), claims that many compa-
nies view CSR from a purely economic perspective, focusing solely on increasing
notoriety and legitimacy, as a reinforcement of competitive advantage and financial
return.
Returning to the great variability of objectives and company’s positioning towards
CSR, Jamali and Mirshak (2006) and Branco (2006) agree with the hierarchical levels
of action proposed in Caroll’s (1979) conceptual model: from the economic, legal,
ethical levels to the discretionary level. However, they stress that companies will
make strategic choices about their CSR program, developing it more proactively or
reactively, more accommodatingly or defensively.
Beyond all controversies, it seems consensual that the practice of CSR is not based
on compliance with regulatory and coercive conventions. Companies that voluntarily
undertake it, promoting management strategies that consider the interests of all parties
and, above all aim at quality and sustainable development, are positioned at a high
level of demand for social development, environmental protection and defence of
fundamental rights.
Therefore, being socially responsible can affect stakeholder’s decision-making.
CSR has important impacts on the company, as it is a factor valued by stake-
holders, differentiates business performance (affecting decision-making), shows a
great leverage capacity, conditioning the results, raises the requirements at managers’
skills and at the degree of achievement of the objectives (Velasco, 2005; Roque,
2010).
Regarding the objectives of CSR outlined in the social policy of the European
Union (European Commission, 2013), they are based on a supportive strategy for
sustainable development and respect for European values, i.e.: (i) Human rights
and labour protection; (ii) Continuous learning and employability of workers with
inclusion of disadvantaged groups; (iii) Environmental protection; (iv) Reduction
of pollution; (v) Rational use of natural resources; (vi) Social and environmental
innovation and (vii) Improvement of public health.
As far as CSR development is concerned, we find the work of several national
and global organizations, such as the Business Council for Sustainable Development
Portugal (BSCD Portugal) and the World Business Council for Sustainable Devel-
opment (WBCSD), namely the “Action 2020” (BCSD, 2013a, b) and the “Vision
2050” (WBCSD, 2013a, b, 2019).
Based on the above-mentioned CSR core values, these two players develop
specific programs that materialize the priorities of various key areas such as social
development, economy, natural capital, energy, cities and infrastructure, as well
as industry and materials, in order to promote “meeting the needs of the present
generation without compromising future generations’ options”.
We are, therefore, talking about Sustainability, understood as the set of human
actions and activities that aim to supply the current needs of human beings, without
compromising the future of the next generations. Sustainability is related to economic
development and based on the principles of respect for the environment and the
rational use of natural resources, from a triple bottom line perspective, in order to
ensure sustainable development.
In conceptual terms, some questions are raised at this stage: Are human activ-
ities carried out to solve people’s needs developed in all sectors that make up the
Portuguese institutional sectors (State/second sector/social economy)? Can CSR be
confused with Sustainability? Is the latter an evolutionary extension of the former?
Are the concepts of Sustainability and Sustainable Development equal or similar?
From the conceptual analysis of the terms sustainability and sustainable develop-
ment we find numerous controversies, ranging from reports of a lack of clear, uncon-
cise definition, misunderstanding and misconception, inconsistent interpretation and
application, to a fashion accessory, to common sense or even being considered as a
populist slogan (Sartori, Silva & Campos, 2014).
Sustainability, according to Sartori et al. (2014), citing Dovers and Handmer
(1992), is defined as “the ability of a human system, natural or mixed, to resist or
adapt to an endogenous or exogenous change indefinitely”. However, they define
sustainable development as the “intentional and evolutionary change that increases
or maintains this system attribute, meeting the needs of the population”. From this
perspective, sustainability is a long-term goal.
However, the same authors emphasize the existence of other approaches, such
as that of Elkington (1997), according to which sustainability is not the goal to
be achieved, but the process to reach sustainable development: sustainability arises
from the recognition of the need of stable markets, from the ability/competence
in the technical, financial and management fields that will enable the transition to
sustainable development. Elkington, in 1997, was the creator of the term Triple
Bottom Line (TBL), considering sustainability as the balance between the three
pillars: environmental, economic and social.
Further to Sartori et al. (2014), the lack of consensus between the definitions of
sustainable development and sustainability lies in the fact that the term sustainability
is based on processes and/or activities while sustainable development has as its focus
on the persons and their well-being.
Following the opinion of these authors, sustainability entails a variety of topics
from different areas of knowledge, with different frameworks. They conclude that
sustainability requires, (i) The balance between the Triple Bottom Line strands; (ii)
Indices and/or indicators for long-term sustainability monitoring; (iii) Alignment
between objectives and identified indicators.
Stahel and Cendra (2011) emphasize the evolution of ethical and moral issues, as
“scale limits” have been exceeded at many levels (socioeconomic, environmental,
technological, cultural, ethical and political). In their opinion, the crisis of legitimacy
gave rise to the sustainability/sustainable development paradigm, whereby an attempt
has been made to propose an alternative development model that ensures the basic
conditions for the well-being of present and future generations. It is about answering
a political and ethical question: “How do we want to live as individuals and society
today and in the future”? These authors make a sustainability analysis, which they
foresee through several principles, presented in Table 7.1.
120 B. Tomé et al.
Table 7.1 Sustainability principles

Sustainability principles Involvement
Long-term phenomenon Implying future generations, hence long-term
policies
Qualitative and relational phenomenon Fundamental the quality and type of
relationships between elements; organization
of interests and their relations with external
environment through self-regulation
It is measured by the achievement of an ethical Sustainability is evaluated by the achievement
and aesthetic objective of the objectives and not through the
preservation of a given system. Fundamental is
not the resilience of the model, but the ability
to generate well-being with inter and
transgenerational equity (the core of
sustainability)
Technical/economic progress helps to achieve
the goal, but it is a means, not an end.
Sustainability should be assessed, not the
development elements (economic/technical),
which are subordinate to ethical/aesthetic
objectives
They do not consider sustainable development
as a goal, but as a means to an end
(individual/collective well-being)
Sustainability is dynamic rather than static Development is the process and sustainability
is the ability to conserve/preserve certain
elements
The essence of sustainability is the
achievement of certain objectives and not the
preservation of the development model itself,
which may change in favour of sustainability
Phenomenon emerging from an organizational Sustainability is the emergent property of a
process whole and not a characteristic that can be
attributed to individual elements
The elements of development are the result of
the system organization (as a whole and not
separated), appearing as a result of the quantity
and quality of established relationships
There are organizational models that favour (or
not) the sustainability of the system (not
sustainable separate elements). The elements
of development are the result of the system
organization (as a whole and not separated),
appearing as a result of the quantity and quality
of established relationships
There are organizational models that favour (or
not) the sustainability of the system (not
sustainable separate elements)
(continued)

Sustainability principles Involvement
Sustainability requires participatory Dynamic/complex systems, such as
self-organization sustainability and development, are based on
the elements of participatory organization
(inside-out/bottom-up process).
Decentralization autonomy predominates over
centralized enforcement, in order to avoid lack
of relevant information and gain the ability to
change behaviours
Sustainability is holistic and total Implying the set of principles that define it and
not some separately. This notion “The whole is
greater than the sum of its parts” applies to the
concept/definition of sustainability
Source Stahel and Cendra (2011)
Calleros (2012) also draws the attention to the multifaceted socio-economic and
environmental challenges that require the adoption of multidisciplinary scientific
approaches in their assessment.
Besides that, Bansal and Desjardine (2014) also view sustainability in a time-based
logic. They see sustainability as a system that should respond to current needs without
compromising future needs from the perspective of a long-term system. Sustainability
lies in the ability to trade indefinitely and timelessly and will be jeopardized by short-
termism if strategic management omits the time factor. They, in fact, consider time
to be central to the distinction of sustainability from other concepts such as CSR and
TBL, which they claim only to operate in the short term.
They argue that sustainability has to go hand in hand with strategy, making it
essential to analyze organizational issues, concepts and theories: (i) At different
levels of analysis (“to get the big picture”); and (ii) Through performance evaluation
indicators to promote integration and capture the value generated over the long term.
Strand, Freeman and Hockers (2015) comparatively address the concepts and
evolution of CSR, sustainability and sustainable development. They emphasize that
sustainable development is people-focused (UN—Brundtland Report, 1987) while
in the CSR perspective the focus is on stakeholder engagement (EU, 2001); a decade
later at the World Economic Forum (2013),2 CSR was associated with sustainability:
the company is now responsible for the impacts on society, as we have seen in the
historical evolution of CSR presented above.
In Scandinavia, according to those authors, there is a paradigm shift from “business
in society” to “business and society”, simultaneously promoting the interests of the
parties.
These changes from implicit CSR, what they call “walking to walk” (to do!) to
explicit CSR, i.e. “talking to talk”, determine the on-going change, no longer based
2 The Sustainable Adjusted Global Competitiveness Index (GCI) is created, reflecting a set of insti-
tutions, policies and factors that make a nation stay productive over time while ensuring social and
environmental sustainability.
122 B. Tomé et al.
on traditions, values, norms and rules to be supported on corporate strategies and

business policies that will promote responsible articulation of community interests.
Furthermore, considering the new requirements for CSR implementation and for
the pursuit of sustainability and Sustainable Development Goals (SDGs), Strand et al.
(2015) highlight the need to take into account various cultural and institutional influ-
encing factors for these changes to be successful, such as democratic management,
ethical behaviour, mandatory worker representation on governing boards, and the
promotion of long-term stakeholder relations.
In short, these authors understand sustainability as a set of principles to be
respected, with relations of reciprocal interdependence, from where a development
model can emerge to equitably meet the well-being of present and future generations.
Schaltegger, Hansen and Freunde (2016) also propose sustainability-oriented
business models, which should be imbued with structural and cultural attributes
such as (i) The development of team/community spirit; (ii) Increasing/enhancing
worker confidence and loyalty; (iii) Commitment to sustainability evaluation; (iv)
Disclosure to stakeholders.
In this respect, they argue that the organization’s mission and objectives should
have to be considered, not forgetting the performance evaluation approach, the need
to include all stakeholders and the way nature must be addressed. Sustainability
management must have an interdisciplinary character, integrating social, economic
and environmental aspects (TBL) to transform the organization and contribute to
sustainable development (Economy and Society).
7.3 The Social Economy in Portugal
Given that this study aims to establish a relationship between Corporate Social
Responsibility and Sustainability from the perspective of the Social Economy, we
cannot fail to make a brief presentation of this sector in Portugal.
The social economy shows a noteworthy performance in the national economy.
The figures presented in the Satellite Accounts 2016 (2019; CASES, 2019) report
that the entities of this sector contributed to the national GVA with 3.0%, having
increased 14.6%, in nominal terms, compared to 2013, growth well higher than that
of the economy as a whole (8.3%), in the same period, as shown in Fig. 7.1.
The social economy ascended to 5.3% of wages and total employment and 6.1%
of paid employment in the national economy. Compared with 2013, those two factors
increased by 8.8% and 8.5%, respectively, showing greater dynamism than the total
economy (7.3% and 5.8%, respectively).
By groups of social economy entities, Associations with altruistic purposes, which
include the IPSS, assumed special importance in a number of entities (92.9%), GVA
(60.1%), Remuneration (61.9%) and Paid employment (64.6%).
IPSS amounted to 5622un (7.8% of total sector entities), with a contribution of
44.2% to GVA, 51.5% to Remuneration and 63.1% to Remunerated Employment.
Fig. 7.1 Satellite accounts of Portuguese Social Economy 2016. Source CASES (2019)
Table 7.2 shows the comparison of the statistical values contained in the satellite
accounts for 2010, 2013 and 2016 (reported in 2013, 2016 and 2019, respectively),
showing that this sector of the Portuguese economy was in counter cycle with the
national economy, showing a strong resilience ability.
Comparing the three pillars referred to—Social Economy, Corporate Social
Responsibility and Sustainability—we might be tempted to establish a timeline,
in which the emergence of a concept seems to follow the previous one in an evolu-
tionary way. However, in our opinion, they do not fade or replace themselves, but
they complement each other or converge.
Sustainable development is an integral part of the social economy, as its end is the
common interest. Objectives other than for the common good and for the benefit of
Table 7.2 Satellite Accounts of the Portuguese Social Economy (2010, 2013, 2016)
Satellite accounts of the social economy in Portugal
Number of entities GBP (%) Paid employment (without volunteering) (%)
2010 55583 2.80 5.50
2013 61268 2.80 6.00
2016 71885 3.00 6.10
14.8% 6.7 1.6
Source INE—Adapted from Statistics Portugal (2013, 2016 and 2019)
124 B. Tomé et al.
the community and the planet cannot be set, nor can its actions be developed without
bearing in mind the interconnection with other societal sectors such as the State and
the Second sector and even civil society.
Social economy entities are stakeholders of companies in the second sector, as
they will establish programs, projects, partnerships, alliances and various actions to
develop their CSR programs. Both sectors converge in the objectives of contributing
to the development and well-being of the community in which they operate, in
a sustainable manner, and make commitments to each other, so that the viability,
credibility and transparency of the projected and developed actions are shared.
As far as the connection of social economy entities with the State is concerned,
recent legal frameworks have emerged in order to recognize the social economy as
an important stakeholder in the national context, regarding the development of the
Portuguese society (LBES, 2013). The State assumes a partner relationship with these
entities, in addition to its supervisory function. Indeed, both sectors share many of
their sustainable development goals. Thus, the State should foster and support social
economy entities that will achieve these objectives on the ground.
Another important role of LBES (2013) was to have driven the revision of
the legal frameworks of the different entities belonging to the Social Economy
sector. Revised codes gradually emerged, such as the Cooperative Code, the IPSS
Statute (EIPSS—acronym in Portuguese standing for Statute of the Private of Social
Solidarity Institutions) and the Mutualist Associations Code.
In particular, the EIPSS entails greater accountability of management social
bodies, especially in terms of oversight and transparency duty (Tomé, Meira &
Bandeira, 2016). This statute establishes a new model for the financial supervision
of IPSS.3
On the other hand, this Statute is very demanding and implies the need for specific
capacities of managers. They are required to have leadership and strategic vision
skills, ability to align the institution’s values and principles through the best gover-
nance practices and codes of conduct for fulfilling their Vision/Mission. They must
necessarily know the social economy sector and the area where the entity oper-
ates. It is also imperative to have experience in people management, legal knowl-
edge, finance and accounting, not forgetting that they should be motivated and have
personal availability to perform the function, in most cases on a volunteer basis.
Many of these capacities required for governing bodies of social economy
entities had already been identified and evaluated by several authors (Teixeira, 2005;
Velasco, 2005; Mulgan, Tucker Ali & Sanders, 2007; Azevedo & Couto, 2010;
Martins, 2010a, b; Meneses, 2010; OECD, 2010; Roque, 2010; Teixeira, 2010;
Vasconcelos, 2010), given that companies are also becoming more demanding
regarding the establishment of partnerships with social economy entities. The
3 The main purpose of accountability is to prepare and provide internal and external information
about the entity’s management and its equity situation. Failure to comply with the obligation to
present the accounts within the set deadlines has serious consequences for the entity (EIPSS—no.
5 of Article 14-A).
same is true for the international funds to which these institutions are increasingly
applying for, and whose management is required to be more professional.
Regarding transparency, it should be noted that social economy entities have an
added duty. Indeed, in Portugal, the public authorities have an obligation to promote
these entities, which are also defended by the Principle of protection of the coop-
erative and social sector (Constitution of the Portuguese Republic (article 80) and
LBES). On the other hand, being conditioned to the strict compliance of the general
interest and of the guiding principles, they must highlight their socially responsible
behaviour. In addition, as legal entities of public utility, they benefit from positive
discrimination (more favourable tax regime (Gonçalves, 2010), conditions of access
to credit, technical support), factors that lead to a greater need for accountability. Not
of minor importance is the need for regulation by the State guardianship, in order
to pursuit proper evaluation and monitoring over the efficiency and effectiveness of
public money’s use as well as over the actions’ contribution of these entities in the
development of the sector.
Transparency is also required and increasingly important for all stakeholders
(members, users, beneficiaries and third parties operating with the entity), and may
be a differentiating factor in the visibility and notoriety of institutions.
As we can see, all actors in the various national institutional sectors aim at sustain-
able development; their sustainability depends on how they manage their resources
to achieve these objectives.
In the context of sustainable development, we underline that the United Nations
(UN) has been setting the Sustainable Development Goals (SDGs) since 2015, which
“define global priorities and aspirations for 2030 and require global action by
governments, businesses and civil society, to eradicate poverty and create a life
with dignity and opportunity for all within the limits of the planet”.
For companies, in particular, the SDGs provide an opportunity to create and implement
solutions and technologies that address the greatest global challenges, helping to link business
strategies and global priorities (UN, 2019).
There are currently 17 SDGs outlined, assessed through 169 targets and 244 indi-
cators and spread across three levels. These should be implemented by all countries
around the world, until 2030 (Agenda 2030), thus seeking to mobilize global efforts
of a set of common goals and objectives, which we present in Fig. 7.2.
These objectives, in whole or in part, are contemplated in programs designed and
developed by the State, private sector companies and social economy entities.
In our opinion, certain conceptual differences will be overcome if everyone’s
perspective and focus are on the general interest and the common good, and if collab-
oration between all sectors becomes more transparent, with the necessary increase
of accountability, in order to promote the sustainability of all sectors involved.
It is in this context of change and need for accountability that the TFA project
arises. The TFA project (“The TheoFrameAccountability: Theoretical framework
for the promotion of accountability in the social economy sector: the IPSS case”)
is promoted by the University of Aveiro, with the participation of CNIS—National
126 B. Tomé et al.
Fig. 7.2 Sustainable development goals. Source INE—Statistics Portugal
Confederation of Solidarity Institutions—and the Polytechnic Institutes of Coimbra

and Porto.
This project aims to promote the accountability (economic, financial and social)
of the social economy sector, in particular the IPSS—Private Social Solidarity Insti-
tutions—but the problem is how to promote accountability (social, financial and
economic) in the social economy sector.
In this regard, there are a certain number of factors that will have to be evaluated,
such as (i) the level of satisfaction of those who benefit from IPSS’s activities; (ii)
the efficient use of their financial resources; (iii) the quality of their relationship with
the community; (iv) the insurance of greater transparency by the IPSS.
Thus, the objectives and expected outputs of the project are to (i) Conceptualize
of a framework, allowing stakeholders to assess accountability, in the social, finan-
cial and economic dimensions (ii) Provide an electronic platform for collection and
processing of necessary data, proper online dissemination of mandatory and volun-
tary IPSS’ information, covering the above dimensions; (iii) Initiate the publishing
of a yearbook, that allows IPSS performance evaluation.
The TFA is still on-going, and we’ve already performed some of the first stages,
as per Fig. 7.3.
Phase 1 (Literature review, to which this paper is also contributing) is almost
finished, as well as phases 2 and 3 (development of the technological platform and
1- Literature review
2 - Development of a technological plattform to:
• 2.1 Collect and publish the mandatory IPSS financial report
via the Internet;
• 2.2 Process information to study performance of social,
financial and economic performance of IPSS.
3 – Conceptualization of the framework
• 3.1 Set of indicators grouped by analysis dimensions;
• 3.2 Considers financial and non-financial information;
• 3.3 Satisfy the information needs of different stakeholders.
4 – Conducting a workshop and focus group
5 – Technological plattform validation
• ISO/IEC 25010:2011
6 – Data collection and processing
• 6.1 Per IPSS (mandatory and voluntary information);
• 6.2 Preparation of a report on IPSS performance (social,
financial and economic).
7 – Global analysis
Fig. 7.3 The TFA’s stages. Source Prepared by the authors
framework of indicators). The Focus group (stage 4), counted with the participation
of specialists on the social economy sector, academy and other related entities, has
been completed end of October 2019, and the set of indicators previously defined
and submitted to the invited opinion-makers are now being reformulated, having into
account the inputs collected.
The purpose of TFA project is to help IPSS, on the one hand, to fulfil their legal
obligations, facilitating a more effective disclosure of the results of the developed
activities and promoting knowledge transfer (to the IPSS and also to the academic
community).
We are most certain of the impact that the increased accountability may have
on these entities’ performance, and the positive way in which this growth will be
contributing to the development and sustainability of these institutions.
128 B. Tomé et al.
Table 7.3 SCOPUS search criteria

Words/expressions “Social economy” or “Third sector” and “Sustainability” or “Corporate
social responsibility”
Fields Article title, Abstract, Keywords
Subject area Business, Management and Accounting; Economics, Econometrics and
Finance; Social Sciences
Access type Open access and others
Year All available (1998—2019)
Publication stage Final
7.4 Bibliometric Analysis
7.4.1 Methodology
In order to make a bibliometric analysis on the theme of Sustainability and Corporate

Social Responsibility from the perspective of social economy entities, this study is
characterized as exploratory, since it intends to know what is being studied and
published on the subject.
Bibliometric analysis is a quantitative and statistical technique that measures the
indexes production and dissemination of knowledge, accompanies the development
of several scientific areas and the patterns of authorship, of publication and use of
research results (Lopes et al., 2012).
This bibliometric analysis focuses on research through the SCOPUS database of
scientific articles, having defined some search filters, which are described in Table 7.3.
Then, the data of the selected articles were analyzed, with a level of detail that
allows to reach the predefined objective, such as the name and number of the authors,
number of authors and co-authors per article, the title of the journal, the country of
affiliation of the authors, supporting theories, among others.
7.4.2 Results
This section presents the results obtained according to the analysis of the sample
data.
Based on the adopted criteria, our search results retrieved 145 documents: 120
articles, 10 book chapters, 7 books, 4 reviews, 3 conference papers and 1 editorial.
These documents span from 1998 through 2019 (Graphic 7.1). As we can see, the
publication rate was low until 2006, increasing dramatically after 2009; the year
2017 reached a maximum of 24 documents but we register a decline in 2018, and
2019 is still far from what we could expect in comparison (Graphic 7.1).
Graphic 7.1 Documents by year
Graphic 7.2 Documents per year by source
Graphic 7.3 Documents by author

130 B. Tomé et al.
Graphic 7.4 Documents by affiliation
Graphic 7.5 Documents by country or territory
The following graphic (Graphic 7.2) shows all documents per year and by source.
As we can see, Voluntas (International Journal of Voluntary and Non-profit Organi-
zations) gathers a total of 23 documents, considering all years, followed by CIRIEC–
España Revista de Economia Publica, Social y Cooperativa and REVESCO (Revista
de Estudios Cooperativo), both with 10 documents each. Again, it is clear that the
year 2017 was the most productive one.
Graphic 7.3 shows how prolific were the authors. There is a set of authors (nine)
responsible for two documents, and we also acknowledge Portuguese authors in this
list but in short number.
Regarding affiliation (Graphic 7.4), three Spanish Universities lead the ranking,
with four documents each and we also register documents from Portuguese
Universities.
Graphic 7.5 corroborates the perception that Spain contributes with a consid-
erable number of documents to this list (27 documents), followed by the United
Graphic 7.6 Documents by type
Graphic 7.7 Documents by subject area
Kingdom (20 documents) and The United States of America (19 documents).
Portugal contributes to four documents.
As said before, Graphic 7.6 shows that 120 documents are articles, representing
82.8% of the total. Portugal contributes to three articles and one book chapter.
Finally, Graphic 7.7 shows all documents by subject area. We have decided
to restrict the search to three main areas and managed to list 109 documents
in the “Social Sciences” area, 71 documents in the “Business, Management and
Accounting” area and 60 in the “Economics, Econometrics and Finance” area.
132 B. Tomé et al.
7.5 Conclusions
As it is well known, the concept of corporate social responsibility is related to the

concept of sustainability itself, which aims to reconcile the economic, social and
environmental aspects in the generation of a scenario compatible with continuity
and the expansion of the activities of the different entities in the present and in the
future. In this sense, the main conclusions of the present study are as follows:
1. Analysing the definitions and concepts of Sustainability, Corporate Social
Responsibility and Social Economy, in addition to many divergences and contro-
versies, we found a guiding line, which links the actors of the various Portuguese
institutional sectors (State, second sector companies and entities of the social
economy), as they seek sustainable development as their ultimate goal, to
strengthen the common good.
2. This common objective enables each sector to develop the actions it considers
strategically appropriate, relying on the most accredited partner to carry them
out and, simultaneously, contributing to their sustainability and that of all
stakeholders involved, in particular, of social economy entities.
3. From this permanent interconnection, we would even say of increasing trend,
results the assumption of more challenging and demanding roles by all parties:
(i) The State will have to position itself as a partner of social economy entities,
beyond its essential guardian function; (ii) Private for-profit companies will have
to develop CSR programs that effectively meet the needs of the community in
which they operate, which will certainly require greater planning and monitoring
capabilities, and should also collaborate more closely with social economy enti-
ties; (iii) Finally, these social economy entities will have to become more effec-
tive and efficient, open to their external environment, facilitating awareness of
their socially responsible behaviour, credibility and transparency in all aspects
(economic, social and environmental).
4. In this context of increased requirements for IPSS, the TFA project emerges to
help these institutions to plan and develop activities more effectively, to facilitate
monitoring and reporting of results and to support them in complying with legal
obligations, thus promoting their accountability.
5. The bibliometric study presented corroborated the importance of this theme, with
greater emphasis on studies by Spanish authors and with a higher incidence in
2017. However, we found that in Portugal these themes have been of greater
interest, believing that knowledge transfers and sharing between the academic
community and the IPSS is necessary and could contribute to the development
and sustainability of these institutions.
7.6 Further Considerations for Future Work
This project is still on-going. Some new indicators could be defined, and a large
number of participative IPSS could enter the project, improving its scalability.
In the future, hope the project could be replicated to other countries and other
sectors (e.g. public sector).
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Chapter 8
Emerging Trends
on Sustainability/Integrated Reporting:
Public and Private Perspectives
Sónia Monteiro, Verónica Ribeiro, and Kátia Lemos
Abstract There has been increasing voluntary integration of social and environ-
mental concerns into the organizations’ strategy and their interaction with other
stakeholders. The public sector, in particular, plays an important role, not only in
promoting social responsibility practices but also in its application to its own struc-
tures and should set an example to the private sectors and the citizens. In the context
of the strategy at the international level to the achievement of sustainable develop-
ment, it is increasingly recognized that the disclosure of information on matters of
social responsibility/sustainability is a key element in the transparency and account-
ability of organizations, both public and private. The objective of this paper is to
analyze the evolution in the reporting of organizations, namely the progress from
traditional financial information to non-financial information reporting, in partic-
ular, the sustainability report and the integrated report. We highlight the specifici-
ties of reporting in the public sector perspective. The main international reporting
frameworks (such as the Global Reporting Initiative and the International Integrated
Reporting Council) and recent developments in non-financial reporting within the
European Union (EU) are explored. Finally, the connection between the report and
the Sustainable Development Goals (SDGs) of Agenda 2030 is also analyzed.
Keywords Financial reporting · Non-financial reporting · Sustainability

reporting · Integrated reporting · Public sector
8.1 Introduction
One of the concepts that has emerged in the last decades is that of Corporate Social
Responsibility (CSR), in which the organizations commit themselves to voluntarily
S. Monteiro (B) · V. Ribeiro · K. Lemos

Polytechnic Institute of Cavado and Ave, Research Centre on Accounting and Taxation, Barcelos,
Portugal
e-mail: smonteiro@ipca.pt
https://doi.org/10.1007/978-981-15-6366-9_8
138 S. Monteiro et al.
link with the purpose of contributing to a more just society and in favor of sustainable
development.
Social Responsibility has been integrating the companies’ strategy due to concerns
about the increase in social disparities and inequalities that exist in society, which
leads them to reflect on their economic, social and environmental development,
and the attempt of a more responsible management (Frey, Marcuzzo, & Oliveira,
2008). On the other hand, it has, has been increasing citizens awareness of the
need for economic growth to be accompanied by social and environmental sustain-
able development (Aerts, Cormier, & Magnan, 2006), and the stakeholders pressure
organizations to adopt sustainable practices.
In this sense, the public sector has also taken an active role in promoting socially
responsible practices and should be a “driver” of CSR (Moon, 2004). According to
Navarro Espigares and Hernández Torres (2005), the public sector plays an important
role, not only in the diffusion of socially responsible initiatives and policies but also
in its application to its own structures.
The global challenge of Sustainable Development impels organizations to think
and manage in a socially and environmentally responsible way and to disclose to
different stakeholders, their behavior in this field. Thus, the development of infor-
mation systems to assess and communicate organizations’ social responsibility (for
example, through social, environmental and sustainability reporting and/or integrated
reporting) is one of the ways that organizations can inform stakeholders of the impacts
that the development of its activities has, not only economically but also socially and
environmentally. Over time, several terms have been used to refer to the non-financial
reporting, from social accounting, social and environmental reporting, sustainability
reporting or integrated reporting (Guthrie, Manes-Rossi, & Orelli, 2017).
The objective of this work is to analyze the evolution in the reporting of organi-
zations, be they public or private, in particular, the advances that have occurred from
the traditional financial information to the reporting of non-financial information, in
particular, the sustainability report and the integrated report. The main international
reporting frameworks (such as those of the Global Reporting Initiative and the Inter-
national Integrated Reporting Council) will be explored, as will recent developments
in non-financial reporting within the European Union (EU).
The connection between the report and the Sustainable Development Goals
(SDGs) of Agenda 2030 will also be explored. We will seek, whenever possible,
to highlight possible differences in reporting from the public sector perspective.
In light of the above, this work is structured in three parts: the first one dedicated
to the analysis of the evolution of the concepts of sustainable development and social
responsibility, in the context of the private sector and the public sector; the second
part describes the evolution of traditional financial reporting to integrated reporting;
and the third part presents a brief reflection on the linkage between reporting and the
sustainable development goals of Agenda 2030. Finally, the main conclusions are
drawn.
8 Emerging Trends on Sustainability/Integrated Reporting … 139
8.2 Sustainable Development and Corporate Social

Responsibility (CSR): Evolution of Concepts
The concept of Social Responsibility (SR) is closely related to the concept of Sustain-
ability/Sustainable Development (SD), which integrates the economic, social and
environmental aspects that interact and relate to each other.
As Ramos and Abrantes (2008) suggest, SR and SD concepts are concepts that
are confused. Although they have different starting points: the SR focuses on the
issues related to the behavior of companies vis-à-vis their stakeholders while the SD
starts from environmental and economic issues, both come to the same conclusion:
a socially responsible company has to be governed by the principles of SD and vice
versa.
According to Cueto Cedillo (2010), the concepts of SR and Sustainability are
presented as “spark and ashes”, “starting point and result”, because they consider
that SR expresses the foundation of the organization’s behavior, the set of values and
principles that motivate actions, and that sustainability represents the goal of such
behavior.
The most well-known and quoted definition of SD is that of the Brundtland Report
which defines SD as “one that meets the needs of present generations without compro-
mising the ability of future generations to meet their own needs” (World Commission
on the Environment and Development, 1987: 16).
From the United Nations Conference on Environment and Development
(UNCED)—ECO92 or Rio Summit (1992), some structural documents have emerged
from a sustainable approach to development, notably Agenda 21, which consolidates
the SD strategy and its concept. The European Union (EU) was present at ECO92
and endorsed its declaration of principles for the SD.
In the European context, the EU Strategy for Corporate Social Responsibility
(2011–2014) recognizes that the dissemination of information in this area is a key
element in transparency and accountability, leading to the publication of Directive
2014/95/EU, of October 22, 2014, on the provision of non-financial information with
regard to social, environmental and corporate governance areas by companies.
The European Directive marks the beginning of a new stage in the reporting of
large public and private companies toward the non-financial reporting. However,
within the EU, “The next steps toward a sustainable European future” are already
being considered (COM, 2016). Based on the disclosure requirements of Direc-
tive 2014/95/EU, the guidelines proposed in that document make an important
contribution to the Sustainable Development Goals (SDGs) of Agenda 2030.
Agenda 2030 for Sustainable Development covers all areas and sectors of any
country. It represents an opportunity for the improvement of public management, the
relationship between the private sector and others, and the articulation and consoli-
dation of public policies with SDGs. Thus, organizations will need to know how to
assess their impact on SDGs and review their strategies, accordingly, necessitating
the collection and reporting of new data, as well as how they relate.
8.3 Advances in Traditional Financial Reporting

to Non-financial Reporting
Traditionally, the report and accounts referred exclusively to financial information.

The report and accounts are a mandatory drafting dossier, which includes the financial
statements of the reporting entities, their management reports and other documents of
accountability. This is the primary means used by the different stakeholders, to meet
the economic and financial performance of organizations. There was a time when
corporate responsibility information was considered strictly “non-financial” and was
not relevant to include in the annual financial reports. However, increasing awareness
and concern, both by the business sector and the public sector, regarding social and
environmental issues, led Accounting as the main information system to follow this
trend. The annual financial report is no longer seen as a dissemination tool capable
of meeting the new demands of stakeholders. This stagnation of financial reporting
has led to the dissatisfaction of its information needs, namely external factors (such
as political, environmental and social), risk management, business models, among
others, that allow for a well-informed decision-making process (PWC, 2013).
8.3.1 The Environmental Financial Reporting
The various accounting standardization bodies have been working to integrate

information and reports on corporate social and environmental responsibility into
their reports and accounts, either through the creation of specific standards (such
as Portugal, with NCRF 26—Environmental Matters) or by means of provisions
dispersed in different regulations.
As in the case of Portugal, many other countries, such as USA, Canada, Norway,
Spain, Belgium, France, the United Kingdom, Sweden and Denmark, among others,
have accounting regulations that require recognition of social and environmental
matters in financial reporting (Ribeiro & Monteiro, 2015).
The growing accounting regulations for these matters (particularly environmental
matters) mean that currently more than three quarters of the world’s 250 largest
companies include at least some “non-financial” information in their annual financial
reports (KPMG, 2017). In the public sector, this accounting regulation of environ-
mental and social matters was not as felt as in the private sector. This is the case
of Portugal, where, in our opinion, the opportunity to create a standard similar to
NCRF 26, applicable to public entities within the scope of the SNC-AP, was wasted
(Ribeiro & Monteiro, 2018).
8.3.2 The Autonomous Social and/or Environmental

Reporting
Although the report and accounts of companies have included information of a

social and environmental nature, other forms of disclosure of information on social
responsibility have appeared, generally in the form of autonomous documents such
as Corporate Social Responsibility Reports, Social Balance Sheets, Sustainability
Reports and Environmental and Social Reports.
In fact, society increasingly demands responsible and transparent action by orga-
nizations, based on the paradigm of a more inclusive society and a more sustainable
economy. And it is in this context that we have witnessed an international orientation
to increase the reporting of non-financial information.
As a first step, the need for companies to demonstrate the conformity of their labor
practices with the Universal Declaration of Human Rights led to the emergence of
the first social reports. However, the concept of corporate social responsibility (CSR)
has led to social and environmental reporting, although some organizations choose
to autonomize social reporting of environmental reports. These independent reports
on social and/or environmental issues are generally sought to meet the information
needs of certain stakeholder groups, which are not fully met by the information
provided in the annual accounts.
The European Commission has continuously issued a number of docu-
ments/communications to foster CSR, which describes corporate social responsi-
bility as the voluntary integration of social and environmental concerns by compa-
nies into their operations and in interaction with other parties (stakeholders). The
evolution of concepts such as CSR and Sustainability has led to the inclusion of
these themes in the information to be disseminated to the stakeholders, as a result of
the proliferation of Sustainability Reports as a general rule elaborated according to
the Global Reporting Initiative (GRI) guidelines.
Regarding independent reports or statements, reference should again be made to
Directive 2014/95/EU, on the dissemination of non-financial information and diver-
sity information by certain large companies and groups. This directive requires certain
companies to include in the annual management report, a non-financial statement or,
alternatively, prepare a separate report containing the information required for the
non-financial statement.
This Directive had to be transposed into the legislation of the various EU Member
States by the end of 2016, applying to large companies which are public interest enti-
ties or to large groups which, at the date of closure of their balance sheet (individual
or consolidated, respectively), have an average of more than 500 employees. It is
regretted that in the scope of application of the directive only the public companies
are covered, not contemplating the public sector in general.
The transposition of Directive 2014/95/EU was made to the Portuguese legal
system by Decree-Law No. 89/2017, of July 28. The diploma creates two non-
financial reporting obligations, one related to environmental, social and labor aspects,
and the other is centered on the diversity policies of members of higher corporate
bodies.
Specifically, Decree-Law (DL) No. 89/2017 stipulates that companies must
present a non-financial statement, as a general rule included in the management
report, as from 2018, with reference to the financial year 2017, but it may be presented
in a separate report (either as an annex to the management report or thereafter, not
later than 6 months after the balance sheet closure date). The information requested
in this non-financial statement includes a description of the business model, policies,
risks, environmental and social performance, as well as measures aimed at workers,
respect for human rights, gender equality, and anti-corruption and bribery.
The question that arises is: on what models or on what good practices should
organizations rely to prepare this non-financial statement? The DL suggests that
companies can use national, EU or international systems, and the system used must be
specified. It refers to the Community Eco-Management and Audit Scheme, or to inter-
national systems, such as the United Nations Global Compact, the Organization for
Economic Co-operation and Development guidelines for multinational enterprises,
the ISO 26,000 Social Responsibility standard of the International Organization for
Standardization, the Global Reporting Initiative (GRI) on Sustainability Reporting
or other recognized international frameworks (such as the Integrated Reporting) and
the methodological reporting guidelines developed by the European Commission.
8.3.3 The Sustainability Reporting
Regarding sustainability reporting (based on the social, economic and environmental

dimensions), since 1999, GRI has published a set of guidelines for the preparation
of Sustainability Reports, based on principles and contents that, regardless of the
characteristics of each company, can be implemented when preparing the respective
sustainability reports. These guidelines enable a better understanding and manage-
ment of the impacts of sustainability on the organization’s activities and strategy,
through a diverse range of performance indicators.
In a logic of continuous improvement, several versions of the GRI guidelines (in
2000, 2002 and 2006) have already been published, and the G4 version, published
in 2013, intended to give the report a higher level of information concentration and
relevance. The G4 version of the guidelines brings to the use of the indicators a new
perspective that, in addition to using them as complex information communication
tools, reflects the importance of an annual comparative analysis of the organiza-
tion’s performance. In this version, the GRI Guidelines help companies to iden-
tify and report on issues that significantly influence the assessment and decision of
their stakeholders and which represent relevant economic, environmental or social
impacts.
More recently GRI Standards have been introduced in 2016, representing the tran-
sition to a set of global standards that have replaced the G4 version since July 2018.
The GRI Standard is a global standard for the disclosure of economic, environmental
and social information, which is designed to be used as a set, presenting a flexible

and interrelated modular structure. It is basically a restructuring of the G4 into a new
Standards architecture with the aim of making the content clearer and more logical,
in a more flexible and easily adaptable structure over time.
With regard to the public sector, Lamprinidi and Kubo (2008) consider that the
reasons that lead private and public entities to disseminate sustainability information
are similar, among which we highlight the following: (i) The need to demonstrate
efforts to combat climate change and other sustainability issues; (ii) increased interest
in transparency and accountability; and (iii) Showing leadership in the sector.
In this context, GRI developed sectoral supplements of the Guidelines in order
to capture relevant and essential issues in the development of sustainability reports
for a specific sector in question. Thus, prior to the publication of the G3 Guidelines
in 2006, GRI began to develop a sectoral supplement for the public sector. The pilot
version of the Sector Supplement for Public Sector (SSPA) was published in 2005
and can be applied at different levels of government: regional, central, federal and
local. Although some studies have shown that the use of the supplement was minimal
and that organizations use the general structure of the GRI guidelines (Tort, 2010;
Navarro, Ortiz, & Alcaraz, 2016), we believe that the supplement is still relevant and
useful for organization disseminators of the public sector.
The KPMG study (2015) states that GRI guidelines continue to be the most popular
voluntary reporting framework worldwide but notes that GRI usage has fallen among
the largest companies in the world. This decline may be related to the introduction
of the GRI G4 structure, because it is considered more complex than the previous
GRI structure, or because the companies have started to make integrated reports.
This idea is reinforced in the KPMG study (2017), whereby some countries seem
to be embracing the concept of integrated financial and “non-financial” reporting,
in many cases driven by stock market regulation/guidance. South Africa stands out
as the pioneer country, by imposing the King’s Code, to require the preparation and
publication of the Integrated Report to companies listed on the Johannesburg Stock
Exchange.
8.3.4 On the Road to the Integrated Reporting
Although the sustainability report has acquired great importance in the last decades,
as a result of the work developed by the GRI, the information disclosed in the sustain-
ability reports is not always presented in a business model context or an organizational
strategy, making it difficult for the stakeholders understand how sustainability (social,
economic or environmental) can affect the value creation process of an organization
(Eccles & Serafeim, 2015).
This idea is in line with the broader concept of CSR in the Communication of
the European Commission (COM, 2011): social responsibility is now taken as the
conceptual platform that integrates not only environmental and social issues but also
human rights, consumer issues and ethics. CSR has to be at the heart of business
strategy and based on shared value creation.
Traditionally, companies have been publishing separate financial reports and
sustainability reports because the strategic link between them was not recognized.
In this context, the concept of Integrated Report emerges as a model that values the
reporting of financial and non-financial information, under duly defined parameters,
interconnecting investment decisions with the strategic and operational options and
the conduct of the organization.
In this context, in 2013 the International Integrated Reporting Council (IIRC)
published the guidelines for the elaboration of an Integrated Report, entitled “The
International <IR> Framework”, which aims to increase the relevance, consistency
and comparability of information, adding in the same report all the components
(“Capitals”) that contribute effectively to business success and to value creation, not
only in the short but also in the medium and long term.
The integrated reporting enables organizations to think in an integrated way about
their strategy, facilitating more informed decision-making, good risk management,
increasing the confidence of the various stakeholders, with the main objective of
improving the performance of the organization as a whole (Guthrie et al., 2017).
This report is the next step in the organizational report, complementing the report
on sustainability, being perfectly applicable also to the public sector. According to
the CIMA report (2016), integrated reporting in public entities promotes a better
understanding of the impact of decisions on the value creation process, taking into
account a comprehensive range of factors relevant to the process and not just financial
considerations of short term. In this way, better decision-making processes, greater
transparency and long-term perspectives are promoted, crucial to the sustainability
of public services.
There have been a number of public entities at the international level that have
successfully implemented the Integrated Report, such as the City of London Corpo-
ration, Welsh Government, Crown Estate and other government departments in the
United Kingdom, as well as other public entities from Africa, Russia, New Zealand,
Singapore, etc. Oprisor, Tiron-Tudor, and Nistor (2016) consider that the Integrated
Report has been gaining momentum in the public sector, but progress is still rather
slow.
According to Ernest and Young (2014), GRI conducted a market study concluding
that the release of Integrated Reports is still a minority practice and only about one-
third of these reports combine sustainability and financial information, once that the
majority consists of two separate documents: A Financial Report and a Sustainability
Report.
8.4 Linking the Integrated Reporting with the SDGs
The year 2015 will go down in history by defining the 17 Sustainable Development
Goals (SDGs) at a UN summit that brought together world leaders to adopt an ambi-
tious agenda for poverty eradication and global economic, social and environmental
development by 2030, known as Agenda 2030 for Sustainable Development.
The 17 SDGs, adopted by almost all countries in the world, define the priorities
and aspirations of global sustainable development by 2030 Agenda and require global
action by governments, business and civil society to eradicate poverty and create a
life with dignity and opportunities for all, within the limits of the planet.
For organizations, whether public or private, SDGs provide an opportunity to
create and implement solutions and technologies that address the greatest global
challenges, helping to link organizational strategies and global priorities. It is, there-
fore, important at this point to assess how organizational practices can be developed
in order to meet the goals proposed in Agenda 2030, and how to articulate the orga-
nizations’ strategy and reporting with the SDGs. The report needs to evolve in order
to quantify, verify and effectively communicate the impact that companies have on
SDGs (KPMG, 2017).
In order to facilitate the integration of the Sustainable Development Goals in the
Organizational Report, the UN Global Compact Network together with the GRI have
developed two key1 documents that should be used together as part of the business
reporting cycle. It is not intended to create a new reporting structure, but to help
companies to highlight their contribution to SDGs and provide relevant information
to stakeholders through qualitative and quantitative disclosures for the SDGs’ targets
that are likely to be relevant to business, regardless of the size, sector or location of
operations. Organizations can use these documents to disclose their impacts and
contributions to the SDGs, for example, reporting according to GRI standards and/or
the 10 principles of the UN Global Compact.
Given the above, major challenges are faced by companies and public entities
in identifying priority SDGs for their operations/activities and stakeholders, incor-
porating them into their strategy, setting goals for their success, and measuring and
reporting on their progress. Integrate the SDGs assessment into corporate reporting
implies to disclosure to stakeholders the effective company performance, using the
emerging nonfinancial reporting models. Whether through sustainability reports or
integrated reports, we believe that what is important is to align these reports with
the structure and scope of the SDGs and should, therefore, be a research area to be
favored in the future.
1 UN Global Compact Network and GRI, “Integrating the Sustainable Development Goals
into Corporate Reporting: A Practical Guide”, http://globalcompact.pt/images/pdf/Practical_
Guide_SDG_Reporting_08_2018.pdf e “Business Reporting the SDGs “Analysis of the
Goals and Targets https://www.globalreporting.org/resourcelibrary/GRI_UNGC_Business-Report
ing-on-SDGs_Analysis-of-Goals-and-Targets.pdf.
8.5 Conclusion
Sustainability issues have deserved a prominent role on the agenda of many govern-
ments and have therefore aroused the interest of society, in particular, the various
institutions, businesses and citizens. In companies, CSR is already seen as a business
opportunity and a booster of benefits, both in terms of competitive advantages and
legitimacy and for the company’s own long-term survival. In the public entities, SR
is inherent to its own competencies and thus implicit in the actions that these entities
develop. It also highlights their role as promoters of SR through public policies.
But not least, it should be noted that they should set an example by following SR
practices in their own organizations thus influencing companies to adopt them. Both
in the private sector and in the public sector, media scrutiny and societal pressures
have required greater efficiency and transparency on the part of organizations.
CSR creates new needs and information requirements for stakeholders. As the
main information system, Accounting has been responding, in particular, to the
reporting process. In this sense, there is a growing accounting regulation in these
matters, published by the main standardizing bodies, both internationally and nation-
ally, and rules and provisions have been created for the accounting treatment and
disclosure of social and environmental issues. Reference should be made to the
EU recommendation on the recognition, measurement and dissemination of envi-
ronmental information in the annual accounts and management report of European
companies. These regulations were the main drivers of accounting regulations in
Portugal, namely NCRF 26—Environmental Matters.
Thus, the Annual Reports and Accounts of the entities already show some social
and environmental information, although for the most part regarding the financial
aspects of environmental responsibility and mandatory disclosure. However, these
documents may also make some non-financial reference to environmental and social
issues, especially in the management report.
The evolution of concepts such as CSR and Sustainability has led to the inclu-
sion of these themes in the information to be disclosed to stakeholders, witnessing
the proliferation of CSR reporting and/or reporting sustainability, based on social,
economic and environmental dimensions.
Traditional financial statements disclose financial information to stakeholders,
while social responsibility reports/sustainability reports provide non-financial infor-
mation on the social/environmental and governance impacts of organizations.
Both the traditional financial reporting and the SR/sustainability reports should
disclose relevant information, and SR reports respond to the growing demand for
transparency and accountability by stakeholders, as well as provide information
related to risks and opportunities not evidenced in the traditional financial reporting
(KPMG, 2008).
With regard to normative, accounting and legal aspects, several non-governmental
organizations, such as the GRI and the UN, have taken initiatives to promote corporate
social responsibility and its communication to stakeholders. The standards developed
by GRI, of voluntary adoption, are an important instrument of CSR and are pointed
out as the main reference, worldwide recognized, for the reporting of sustainability.
Its aim is to harmonize the information disclosure practices in these three areas:
economic, social and environmental (triple bottom line), which led to the prolifera-
tion of autonomous and independent documents of the Annual Report, such as the
Sustainability Reporting.
It should be noted that non-financial reporting is voluntary for most companies but
has become mandatory for certain large EU companies as a result of the publication
of Directive 2014/95/EU. In Portugal, the transposition made by Decree-Law No.
89/2017 constitutes a challenge for companies that are covered by this law, taking
into account that it is already applicable since 2017, i.e. the reports published in
2018. This law may imply for some companies the need to deepen some areas, such
as the identification and management of risks and the formalization and monitoring
of policies.
The need for a non-financial reporting is already clearly identified, and the studies
developed by KPMG (2008, 2015, 2017) show that more and more companies publish
specific reports on sustainability issues, presenting information that is not governed
by principles or standards accounting policies. However, this type of reporting does
not allow a comprehensive and integrated analysis of the organization’s performance.
Thus, it is only possible to add value when integrating all the organizational informa-
tion, relating the strategy, risks and opportunities with the organization’s governance,
and the management of economic, financial, social and environmental performance.
Investors and other stakeholders have been gradually pressing for the existence
of an Integrated Report, the purpose of which is to report financial and non-financial
information under duly defined parameters. This type of report encompasses the
activities carried out by the entity and its impacts in a more holistic perspective, by
aggregating financial and non-financial information, in order to understand not only
how companies, manage economic and financial performance but also the themes of
sustainability and social responsibility (Triple Bottom Line).
In sum, the integrated report aims at improving the quality of information and
the comprehensiveness of management responsibilities at the level of “capitals”
and the interdependencies between them; the diffusion of a more cohesive and effi-
cient approach to corporate reporting; and cooperation in the adoption of integrated
thinking in decision-making that will enable value creation in the short, medium and
long term (IIRC, 2011).
Two years have passed since the definition of the United Nations SDGs under
Agenda 2030, with business and government/public sector playing a key role in
helping to achieve SDGs. In this sense, it is important to align the organizations’
strategy and the organizational report with the SDGs, giving the stakeholders the
current level of commitment to these objectives.
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Chapter 9
CSR and Nation Building Agenda
in India: An Accounting Framework
for “Multiplier” Effect of Corporate
Social Responsibility
Taral Pathak and Ruchi Tewari
Abstract Corporate Social Responsibility (CSR) goes through various stages of

evolution and integration which is researched and detailed by Visser (Journal of
Business Systems, Governance and Ethics 5:7, 2010), and according to this frame-
work different kinds of values are generated for a target group of stakeholders; this
should find a reflection in the way CSR is accounted for. The current study is based
in India and proposes to do the same to ensure CSR implementation, and its cost
and benefits are being fairly represented in books of accounts. Recent research on
CSR confirms the existence of the “social impact hypothesis” (Waddock and Graves
in Strategic Management Journal 18:1–34, 1997) suggesting that better and sincere
CSR performance results in not only fulfilling stakeholders’ expectations but also
building stakeholder’s trust (Verma and Singh in IIM Kozhikode Society & Manage-
ment Review 5:1–13, 2016), which in turn may lead to an enhanced reputation and
superior financial performance for the organizations. The latter half of the chain
effect, i.e. stakeholder trust leading to enhanced reputation which in turn leads to
superior financial performance is defined by the authors as the “multiplier effect”
of CSR activities. Law and accounting standards play an important role in estab-
lishing a framework for corporate commitment and management discipline toward
CSR activities (Aras and Crowther in global perspectives on corporate governance
and CSR, Gower publishing, 2009). According to Krstic and Dordevic (Economics
and Organization 7:335-348, 2010)), no longer can the accounting profession afford
to be a mere witness to the core changes happening in modern companies. The main
argument in legislating CSR activities for Indian companies is the recognition of a
vital role by corporates in Nation Building. Therefore, any outflow of funds incurred
during the “multiplier phase” of CSR activities should not by default be expensed
in the profit and loss statement. The current paper recommends the measurement of
intangible assets arising out of nation building activities by corporates during the
multiplier phase.
T. Pathak · R. Tewari (B)

MICA-the School of Ideas, Ahmedabad 380058, Gujarat, India
e-mail: ruchi.tewari@micamail.in
https://doi.org/10.1007/978-981-15-6366-9_9
152 T. Pathak and R. Tewari
Keywords Corporate social responsibility (CSR) · Nation building · Phases of

CSR · Intangible CSR assets · Accounting framework and Conceptual model
9.1 Introduction
Nation building, as a field of study, draws from various disciplines like political
science, sociology, economics, psychology, etc. because it entails a socio-politico
function which has distinct implications on the human psyche and well-being. Alesina
and Reich (2015) defined nation building as, “as a process which leads to the forma-
tion of countries in which the citizens feel a sufficient amount of commonality of
interests, goals and preferences so that they do not wish to separate from each other”
while Lowe (1970) mentioned that popular support for rapid change is imperative
for nation building. One of the popular means to bring in change and build a nation
is the public policy (Mulligan et al. 2004). Internationally, evidences from the polit-
ical history of France, Italy, etc. reflect the use of public policy in the domains of
education, military, tax impositions, etc. for the purpose of nation building. Very
recently, the government of India (GoI) amended the Companies Law, 2013, and
made corporate social responsibility (CSR) mandatory and stated that, “The ratio-
nale behind CSR legislation is not to generate financial resources for social and
human development since the resource gap, if any, for such development or social
infrastructure could have been met by levying additional taxes/cess on these corpo-
rates. Therefore, CSR should not be interpreted as a source of financing the gap in
inclusive growth. Use of corporate innovation and management skills in the delivery
of ‘public goods’ is at the core of CSR implementation by the companies” (Ministry
of Corporate Affairs 2015). Under the circumstances, it is obvious that corporates
are not expected to pursue defensive or mere compliance-oriented CSR. However,
only strategic, systemic (Visser 2010) and internalized CSR can lead to sustainable
development and contribute to nation building over the long term. Hollender and
Breen (2010) stated that most CSR activities presently being conducted by firms fall
into the category of doing “less bad” rather than “doing good” and therefore, Visser
(2010) suggested that a shift in CSR at both the meta level and micro level will
take place and the entire Western concept of CSR will give way to a more culturally
diverse concept.
The cultural heritage of India is reflected in the Sanskrit term “Vasudhaiva Kutum-
bakam” which means “the entire world is one family”. This concept is at the heart of
the proposed “Internalized CSR” approach. The Gandhian vision of respect for all
forms of life, nonviolent conflict resolution and holistic development is an extension
of the concept of Vasudhaiva Kutumbakam. If Indian firms believe that the entire
world is one family and thus inculcate CSR in their DNA, then they would move
beyond Visser’s last stage. “Internalized CSR” starts where “Systemic CSR” ends
and it proposes to go beyond innovating business models, processes, products and
services. When a corporate gets to the stage of Internalized CSR, it is assimilated
inside the company’s ethos, belief system, vision and mission, policies, processes,
9 CSR and Nation Building Agenda in India: An Accounting … 153
products and services, and its conduct with the rest of the world. The global move
to create a sustainable global order is also based on a similar ideology, and to see
a sustainable world, it is imperative that corporate and business entities begin to
internalize CSR and accept their larger role in the frame of business and society.
Long-standing ethical companies like “Ford”, “Rockfeller”, “Tata”, etc. are real-life
examples of good corporate citizenship. But the question at the heart of this issue is,
why is this attitude to CSR limited to a few companies and what best can be done to
find a solution such that CSR can be employed as a tool to create a win-win for the
business and society.
Internalized CSR will result in nation building and through the multiplier effect,
the organization experiences social as well as financial benefits of “Internalized
CSR”. Al-tuwaijri et al. (2004), Burnett and Hansen, (2008), Erhemjamts et al. (2013)
and Rodgers et al. (2013) reported a positive relationship between CSR and Financial
Performance (FP) which provides grounds in the stakeholder theory (Freeman, 1984).
This relationship leads to two hypotheses—“slack-resource hypothesis” (Preston and
O’Bannon 1997) indicating that better FP leads to the availability of extra resources
which can be channelized into CSR while “social impact hypothesis” (Waddock and
Graves 1997) suggests that better performance across the various dimensions of CSR
indicates fulfilling stakeholders’ expectations which in turn leads to an enhanced
reputation and reflects as better FP of the companies and vice versa. This view
furthers into positive synergy hypothesis which supposes that improved CSR leads
to enhanced FP which finds a cyclical channel into CSR activities (Allouche and
Laroche, 2005), and, therefore loops the social impact hypothesis and the slack
resources hypothesis which as Waddock and Graves (1997) put, “form a simultaneous
and interactive positive relation between CSP and FP, forming a virtuous circle”.
Given the fact that the multiplier phase can result in future economic benefits, the
accounting system needs to have adequate provisions for the recognition of tangible
or intangible assets generated as a result of CSR activities.
The Guidance Note on Accounting for Expenditure on CSR Activities, issued by
ICAI on 15th of May, 2015, states that a company may decide to undertake its CSR
activities in the following three ways:
1. Making a contribution to the funds as specified in Schedule VII to the Act; or
2. Through a registered trust or a registered society or a company established under
Sect. 8 of the Act by the company; or
3. In any other way in accordance with the CSR Policy Companies Rules, 2014.
The third point above basically means that the company carries out the CSR
activities on its own. It is this approach that is central to the idea of the multiplier
phase. When the company itself carries out CSR activities, the chance of a random,
residual approach to CSR diminishes since a lot more is at stake. The CSR definition
used by European Commission states that “CSR stands for responsible business
practices in the respective company’s actual core business” (National Strategy for
Corporate Social Responsibility—Action plan for CSR—of the German Federal
Government). Therefore, unless the company on its own carries out CSR activities,
it would fail to reflect in its DNA and each and every business process, decision-
making and stakeholder engagement activity. Godfrey et al. (2009) states that CSR
has an insurance-like property and in case of a negative event, the goodwill generated
as a result of the CSR activities has a tendency to absorb the negative impact. It is
during this multiplier phase that the outflows of CSR activities should be capitalized
in the Balance Sheet and not expensed in the Profit and Loss (P&L) statement while
in the currently available system, CSR is still booked under the P&L on account of
which organizations clearly see CSR as an expense than an asset. The current paper
makes an attempt to present a conceptual framework for CSR.
9.2 CSR in a Global Context
The role, concept and impact of CSR have sharpened over a period of time. Friedman
(1970) considered CSR as a cost according to the shareholder theory. On the other
hand, Freeman (1984) considered it to be a strategic tool under the stakeholder theory.
The earliest imprints of CSR can be traced back to the 1800 s with the dawn of
Industrial Revolution. During these days, CSR was mainly carried out through phil-
anthropic activities for the purpose of engaging with external stakeholders (Carroll,
2008). Over a period of time, firms have moved beyond compliance-based CSR to
strategic CSR, which involves integrating CSR with the firms’ core business, devel-
opment of CSR policy, crafting strategic activities that create competitive advantage,
implementation, reporting and auditing. All of this taken together improves the firms’
reputation, brand awareness and goodwill. (Alcaniz et al. 2010; Hur et al., 2014;
Walsh et al., 2003).
Frederick (2008) described CSR at the macro- and micro levels and emphasized
the need to integrate the two levels. According to him, CSR evolved in a series of
stages as summarized in Table 9.1. The common observation across all the stages is
that CSR started at the macro level, i.e. top-level managers and moved toward the
micro, i.e. people level, i.e. child care, meals, health care for families and individuals.
Visser (2010) argues that CSR as a governance system has failed unless it rein-
carnates itself in the form of Systemic CSR or radical CSR or CSR 2.0. Systemic
CSR is based on the concepts of creativity, scalability, responsiveness, glocality and
circularity. This new CSR built around the four elements of value creation, good
governance, societal contribution and environmental integrity is likely to put to rest
the argument that the purpose of businesses is to earn profits and serve shareholders.
The historical progress of CSR summed up by Visser is given in Table 9.2.
9.3 CSR in India
The Brundtland Commission—World Conference on Environment and Development

in, 1987 and the United Nations Conference on Environment and Development in
Table 9.1 Stages of CSR

Guiding CSR Main CSR action CSR drivers CSR policy
principle instruments
CSR-1 Corporate Corporate Executive Philanthropy and
(1950s–1960s) managers are philanthropy conscience and public relations
corporate social public trustees company
stewardship and social reputation
stewards
CSR-2 Corporations Interact with Stakeholder Stakeholder
(196s–1970s) should respond stakeholders and pressures and negotiations and
corporate social to legitimate comply with government regulatory
responsiveness social demands public policies regulations compliance
CSR-3 Create and Treat all Human rights Mission
(1980s–1990s) maintain an stakeholders with and statements, ethics,
corporate/business ethical respect and religious-ethnic codes and social
ethics corporate dignity values contracts
culture
CSR-4 Accept Adopt and Globalization International code
(1990s–2000s) responsibility implement global disruptions of compliance,
for corporate sustainability economy and sustainability
global impacts programmes environment policy
Source Frederick (2008)
Table 9.2 Stages of CSR and key enables

Economic age Stage of CSR Modus operandi Key Enabler Stakeholder
target
Greed Defensive Ad hoc interventions Investments Shareholders,
government and
employees
Philanthropy Charitable Charitable programmes Projects Communities
Marketing Promotional Public relations Media General public
Management Strategic Management systems Codes Shareholders and
NGOs/CSOs
Responsibility Systemic Business models Products Regulators and
customers
Source Visser (2010)
1992 have put a spotlight on Governments around the world as a result of which they
have adopted sustainable development as a national goal. An emergent debate is the
role of business in contributing to this objective. The Government of India (GoI)
mandated corporates, which fell under the ambit of section 135 of the Companies
Act 2013, to spend at least 2% of average net profits every financial year toward CSR
activities as defined in Schedule VI of the Companies Act. The primary objective
behind legislating CSR activities of corporates is to ensure Nation Building through
their ability to innovate, engage and manage CSR activities. CSR is not a substitute
for political action. For India, CSR offers a solution to social challenges, which could
not have been achieved through Government action alone. Historically, India has a
tradition of “daan”, “seva” and “zakat”. Philanthropy has been the major tool through
which wealthy individuals and business houses have reached out to the lower sections
of society. The private sector was also involved in India’s freedom struggle, funding
of the freedom movement is still considered as one of the biggest Nation Building
investments made by the private sector then. Big business houses like the Tata group
embraced the concept of CSR 150 years ago when formal government guidelines
were nonexistent. A brief history of the CSR landscape in India is available below
(Table 9.3).
Four years have gone by since it was made compulsory for corporates to undertake
CSR activities. The total CSR spend by Indian corporates has reached Rs. 7,536. 30
crores (around $1 billion) for the financial year ended March 2018. The spend by
top Indian companies in 2018 is 47% higher than in 2014. Health care and education
received over 50% allocation out of the total CSR spend by companies. The Graph 9.1
below gives a breakup of the CSR spend of Indian companies.
However, at the same time, the number of companies which haven’t spent the
mandatory 2% spend has also increased. Companies have cited reasons like not
being able to identify the right projects, not being able to set up necessary teams
to implement the project as well as not being able to execute the projects internally
or through third parties for not spending the mandatory amount. The GoI plans to
revisit the CSR provisions in 2019 with a view to making them more effective. Now
is the right time to review the nature of CSR expenditures incurred, the manner in
which they are incurred and whether the CSR activities are aligned to the larger goal
of Nation Building.
Table 9.3 History of CSR India

Time period Economic currents State role Corporate CSR
1850–1914 Industrialisation Colonial, extraction Dynastic charity
1914–1947 Trade barriers for new Colonial, exploitative Support freedom
industries struggle
1947–960 Socialism, protectionism Five year plans Support new state;
launch own rural
initiatives
3960–1990 Heavy regulations Licence raj; development Corporate trusts
failures
1991–2013 Liberalisation Shrinking in production; Family trusts,
expanding in social private-public
provision partnerships, NGO
sponsorship
2013–present Globalisation Need to manage Introduction of
inequality; new reforms to mandatory 2% rule
liberalise further
Source https://www.gatewayhouse.in/a-brief-history-of-indian-csr/
Graph 9.1 Source https://www.theatlas.com/charts/H1FwtAZbE
Over the last 3 years, two countries of the European Union (EU)—Denmark
and Italy—have made CSR disclosure mandatory, and though limited studies have
been done Balluchi et al. (2019), work reflects a positive impact of mandatory CSR
disclosure and a larger number of companies communicating CSR and a growing
CSR funds which has helped the Italy as a nation.
9.4 Accounting, CSR and Nation Building
Accounting has played an important role in holding corporates accountable vis-a-vis

their interactions with society. Social accounting was first heard of with the social
responsibility movement of the 1960 s (Drucker 1965). Subsequently, Corporate
Social Reporting (CSR) came into the reckoning to be followed by Social and Envi-
ronmental Accounting (SEA). The triple bottom line approach (Planet, People and
Profit) proposed by Elkington captured the essence of the sustainability of a business.
More recently, the popularity of the Global Reporting Initiative (GRI) framework
for reporting of social, environmental and governance information is a testimony
to the importance and changing role of social accounting. Milne (1996) introduced
a framework of analytical approaches to environmental resources within which to
view existing and future accounting developments. Atkinson (2000) suggested the
full cost accounting (FCA) method to calculate “green profits” or “green value added”
to judge its impact on the external environment. Figge and Hahn (2004) proposed
a sustainable value-added statement, which simultaneously considered economic,

environmental and social aspects of a business.
Gray et al. (2010) stated that social accounting is not a precise or definable concept
but a “complex, diverse, amorphous and constantly changing craft”. On the other
hand, Lehman (2006) suggests that “accounting is a practice which moves in a space
of reason” and in it “attempts to create social change through rational assumptions
perpetuate a strategy that remains caught within the confines of the present”. There-
fore, the question to ask is how does accounting contribute toward taking good
decisions? Or avoiding bad decisions?
The majority of the body of work in accounting revolves around social accounting,
which proposes additional methods and reporting frameworks on a firm’s social
impact. However, the need is to bring CSR activities into the mainstream by changing
financial accounting norms, which affect the financial statements, viz., the Income
statement and Balance Sheet. Once corporates see that the “real” financial state-
ments are impacted as a result of their CSR activities, a considerable change in their
approach to CSR activities can be expected.
To assist with the accounting of the CSR expenditure, the Institute of Chartered
Accountants of India (ICAI) issued a guidance note on accounting for expenditure
on CSR. It states that if CSR expenditure were incurred by making a contribution
to specified funds under Schedule VII of the Act or through a registered trust or a
society, the same would be treated as an expense and charged to the Statement of
Profit and Loss. In case the company incurred the expenditure on its own, the same
should also be charged as an expense to the Statement of Profit and Loss.
It specifically mentions that “In case the expenditure incurred by the company is of
such nature which may give rise to an ‘asset’, the company needs to analyze whether
the expenditure qualifies the definition of the term ‘asset’ as per the Framework i.e.
whether it has control over the asset, derives future economic benefits from it and can
be identified separately.” However, the guidance note discourages the recognition
of an asset due to CSR activities and also advises against recognizing any income
generated from such assets. When the guidance note provisions are read together
with Accounting Standard 26 issued by ICAI on “Intangible Assets”, it seems it is
highly improbable for corporates to recognize any internally generated CSR asset,
as a result of sustained CSR activities. The current accounting stand negates and
contradicts the basic spirit of mandating CSR by the Government of India (GOI)
for the purpose of Nation Building. Contribution toward Nation Building has to
be considered as an investment and not an expenditure. It is very clear from the
GoI mandate that sporadic, one-time expenses under the head of CSR will not be
considered as “valid CSR expenditure”. However, a sustained investment, which is
incurred in line with the CSR policy of the company and as per the recommendations
of the CSR committee, is desirable. In the next section, the paper clearly lays down
the proposed accounting techniques in line with the CSR framework adapted from
Visser (2010).
9.5 CSR-Multiplier Framework
The CSR multiplier framework proposed by the authors builds on the CSR stages
proposed by Visser (2010). It breaks up the CSR journey of an organization into
two distinct phases. The non-multiplier stage consists of Defensive CSR, Charitable
CSR and Promotional CSR. During this stage, the company is not likely to reap
any positive benefits of the CSR activities conducted, and therefore the proposed
accounting treatment is in line with the proposals of ICAI which recommends
charging the CSR expenditure to Profit and Loss statement. The Multiplier stage
consists of Strategic CSR, Systemic CSR and Internalized CSR. It is during this
stage that businesses start making positive contributions to society, where businesses
move away from profitability and move toward value creation for the “world-family”.
The accounting of CSR expenditure during this stage needs to be revisited since
the suggested treatment by ICAI is definitely not in line with the intent of the
transactions undertaken. During this stage, the multiplier effect ensures that the
company starts reaping benefits (financial or nonfinancial) of the CSR activities.
Therefore, where CSR expenditures are non-revenue in nature, asset recognition for
tangible CSR assets should be allowed in the books of accounts. Representation of
business transactions on the face of the Balance Sheet raises stakes for the company
concerned. The effort and energy put into CSR expenditures are clearly different
than what they would be if the same transactions are routed through a trust or a third
party-operated fund. The asset recognition criteria given in the accounting standards
should be applied to such assets and any income generated through such assets may
still not be recorded and expensed immediately by creating a CSR reserve. However,
at the outset not allowing corporates to recognize an asset is self-defeating for GoI.
The last stage, which relates to Internalized CSR, calls for recognition of intangible
CSR assets. Since CSR as a concept has moved into the DNA of an organization,
the chances of the existence of a CSR brand, reputation or goodwill are very high.
Usually, the companies would take at least 5 years to move from the Strategic CSR
stage to the Internalized CSR stage and, therefore, tests should be applied for the
existence of intangible CSR assets. In case of super profits, brand premium, resilience
of brand during a negative event or clear evidence of a role in Nation Building are
witnessed, then the accounting fraternity should allow recognition of self-generated
CSR-based goodwill/brand. The valuation of such an asset should be done based on
Fair Value principles used in valuing long-term assets in accounting.
CSR multiplier framework
160
Business age Stage of CSR Phase of CSR Modus operandi Key enabler Implementation Stakeholder target Suggested
mechanism accounting
treatment
Greed Defensive CSR Non-multiplier Ad hoc Investments Sporadic Shareholders, Treated as an
stage interventions self-effort Government and expense and
projected outward Employees charged to Profit
and loss statement
Philanthropy Charitable CSR Community Projects Foundation, Communities Treated as an
programmes Trust, Chairman’s expense and
Fund charged to Profit
and Loss statement
Misdirection Promotional CSR Public relations Media Self-effort General Public Treated as an
through HR and expense and
marketing charged to Profit
departments and loss statement
or
foundation, trust,
chairman’s fund
Management Strategic CSR Multiplier stage Management Codes Self-effort Shareholders and Recognize CSR
systems through top NGOs/CSOs assets to the extent
management and of non-revenue
employees outflows incurred.
or Revenue outflows
foundation, trust, to be charged to
chairman’s fund Profit and Loss
statement
(continued)
T. Pathak and R. Tewari
(continued)
Business age Stage of CSR Phase of CSR Modus operandi Key enabler Implementation Stakeholder target Suggested
mechanism accounting
treatment
Responsibility Systemic CSR or Business models Products Self-effort Regulators and Recognize CSR
CSR 2.0 or through all levels customers assets to the extent
game-changing of management, of non-revenue
CSR employees and outflows incurred.
integration of Revenue outflows
different to be charged to
stakeholders profit and loss
statement
Assimilation Internalized CSR Social conscience Imbibing ethics Internalized by All stakeholders Recognize
(internalization*) embedded in management, including society intangible CSR
decision-making employees and all and environment assets based on
across the board stakeholders fair valuation
principles
Source Developed by the authors
* John Finley Scott (1971) defined Internalization as a metaphor in which something (i.e. an idea, concept and action) moves from outside the mind or personality
to a place inside of it. At this final stage of CSR, the organization practicing CSR becomes a torchbearer for not only its own industry but also for the corporate
9 CSR and Nation Building Agenda in India: An Accounting …
world at large. The practicing organization has a reputation in the market because of the multiplier effect
161
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Chapter 10
Why Some Public Accounting Reforms
Tend to Fail: Evidence from Belgian
Public Accounting Reform
Christos Tsatsis
Abstract In the past decade, public sector, in the strait idea of new public manage-
ment (Hood, 1991, 1995) many countries did undertake public accounting reform to
improve the performance of the public sector accounting. Our main research ques-
tion is therefore to find how public accounting reform in Belgium does improve the
performance of a public entity.
Political promoters drive the accounting reform, while, as a controlling entity, they
generally have only very imperfect information about the structure they controlled.
It is a perpetual case of information asymmetry.
This reform could be the change in public management that drives the content of
the accounting reform. Meanwhile the content of the reform points out the tool we
need for this accounting reform. While the tool used has an impact on the institution
and its organization and influences itself the organizational change.
Our research is based on neo-institutional theory of (Powell & DiMaggio, 1991)
while the other is based on the Agent-Principle theory (Broadbent, Dietrich, &
Laughlin, 1996; Mayston, 1993) and its rare case of market failure (Akerlof, 1970).
Unlike other countries (Caruana, 2014; Jorge, 2003), public accounting reforms
in Belgium took place in more than 30 years since the start point is 1991 (Moniteur
belge, 1991) and it is expected to be finished in 2021 (Moniteur belge, 2014a, 2014c).
The very long process reform is something very unusual which is mainly due to
the absence of a strong political commitment (Ghysels, Phan, & Tsatsis, 2011; IFAC,
2011, p. 14). This absence was also stressed out by the Court of Audit;
The government’s perspective was presented by Budget Minister Freya Van Den Bossche. It
expressed non-partisan support for the introduction of accrual accounting, mainly because
of the high costs associated with it, and argued for transaction-based budget accounting. The
legislation adopted and the possibilities offered by the Fedcom project do not, however, rule
out taking the step, in the future, towards a partially double accounting (Cour des comptes,
2007, p. 29).
C. Tsatsis (B)
Centre de Comptabilité et Contrôle, Universite Libre de Bruxelles, CP 102 Av. FD Roosevelt 50,
Brussels 1050, Belgium
e-mail: christos.tsatsis@ulb.be
https://doi.org/10.1007/978-981-15-6366-9_10
166 C. Tsatsis
Translated from French: «Le point de vue du gouvernement a été présenté par
madame Freya Van Den Bossche, ministre du Budget. Elle s’est déclarée non parti-
sane de l’introduction d’une comptabilité double, principalement en raison des coûts
élevés y associés, et a plaidé en faveur d’une comptabilité budgétaire sur la base des
transactions. La législation adoptée et les possibilités offertes par le projet Fedcom
n’excluent cependant pas de franchir le pas, à l’avenir, vers une comptabilité en
partie double» (Cour des comptes, 2007, p. 29).
This long period of uncertainty does create some conditions to deviate from initial
reform since time is provided to alter the initial conditions of the reform.
The aim of this paper is to underline why and how those who are in charge of
that particular reform implementation are likely to deviate from the initial reform.
Our final goal is to develop a model in order to test it with the main stake-
holders of this reform to understand why and how accounting has been shaped by
the environment and the rules and how “new accounting” shaped in turn the environ-
ment. As Littleton said a long time ago, “Accounting is relative and progressive. The
phenomena which form its subject matter are constantly changing. Older methods
become less effective under altered conditions; earlier ideas become irrelevant in the
face of new problems. Thus surrounding conditions generate fresh ideas and stim-
ulate the ingenious to advise new methods. And as such ideas and methods prove
successful they in turn begin to modify the surrounding conditions. The result we call
progress” (Littleton, 1933) quoted by (Napier, 2006, p. 451).
Keywords Public accounting · New public management · Agent principle
10.1 Introduction
Article 1 of the Belgian Constitution states that “Belgium is a federal state made up
of communities and regions” (Senat belge, 2019). This federal state with a double
layer of federalism which are communities and regions exists because unlike other
federal states like Germany or the United States of America, Belgians do not all
share the same official language. This means that in order to make all this work
the side of traditional regional level of authority, called regions, which have powers
for “‘territorial issues’, such as public works, agriculture, employment, town and
country planning and the environment”. Communities “are delimited on linguistic
grounds, relate to education, culture, youth support and certain aspects of health
policy” (Federal Public Service for Foreign Affairs & Federal Public Service for the
Chancellery of the Prime Minister, 2015, p. 4) are the second layer of this federal
state.
Working on the process of public accounting reform in Belgium since the early
2010s, the question, “Why some accounting public reforms tend to fail?” arise from
the experience of the process itself. I do have the chance to endeavor this question
10 Why Some Public Accounting Reforms … 167
from multiple points of view since my background permits me to do it.1 Unlike other
researchers who “generally speaking, the authors in our review mainly stick to their
academic background and seem to take a rather distant stance from practice” (Van
Helden, 2005, p. 114). My background permits me to tackle this question from a
practical point of view.
To be fair, it is wrong to state that the process failed. Littleton, by stating that
accounting is both relative and progressive (Littleton, 1933) finds out the true nature
of accounting. We should therefore reformulate failure as the lack to deliver the
expected result within the available time to do it.
The Belgian case is also very interesting since we are not speaking about the
accounting reform of one state but rather the accounting reform of nine states.2
This matter-of-fact permit to eliminate the bias of legislation in our analysis since
the reform is based on the same law. Belgium is, in the meantime, a case of good
and bad students since Belgian federal governments provide both a best-case and
worst-case scenario of the reform.
The idea of this research arises from a conference with Prof van Caille. While I
was enumerating my finding of some years of research, he points out in one hand my
big ambition to apply Luder’s model in a doctoral research (Lüder, 1992, 2002). In the
other hand that the results, I’ve found lack of theoretical background, which seems to
be a common statement in my field “public sector accounting research continues to
accommodate a very large proportion of work without any clear theoretical base
alongside studies explicitly mobilising a diverse set of theoretical perspectives”
(Modell, 2013, p. 100).
According to the first findings we had, it was proposed that neo-institutional theory
could be suitable to tackle the process of the reform while the problems identified
within the process should/could be used using Agent-Principle theory.
Questions raised from this perspective are complex and could be summarized
such as
1. The change in public management drives the content of the accounting reform.
2. The content of the reform points out the tool we need for this accounting reform.
3. The tool used has an impact on the institution and its organization and influences
itself the organizational change.
The scope of this early stage draft is to pick up theories suitable for the process
of Belgium to understand why and how the accounting processes itself. The goal
is to develop a framework within which we can ground our research for a better
understanding of why, within the same country, some public accounting reforms
were succeeded and why other public accounting reforms were wrong.
1I have a degree in accounting and a master’s in economics. In the meantime, I did realize few
missions as a consultant in public sector accounting working as management controller in a public
sector firm and be a teacher in the high education system.
2 One in federal level (Belgium), three communities (the Flemish Community, the French Commu-
nity and the Germans-peaking Community), three regions (the Brussels-Capital Region, the Flemish
Region, and the Walloon Region), and two community bodies within the Brussels-Capital Region
which are the only two language-speaking community.
168 C. Tsatsis
10.2 Background
Research in public sector management and public sector accounting is quite old, and
the first theories arise in the late 80s (Hood, 1991; Klaus Lüder, 1989). The first
literature review started in the meantime (Broadbent & Guthrie, 1992) and actual
scholars (Broadbent & Guthrie, 2008; Goddard, 2010) tend to prove that research in
public accounting is a “mature field of research” (Jacobs, 2012, p. 2).
Two theories we found suitable for our research is the Neo-Institutional theory
and the Agent-Principle theory. Thus, we found afterward that those two frameworks
are the most common framework in public accounting research. Van Helden (2005,
pp. 103 and 108) and Goddard (2010, pp. 78–80) point out some theories used. Jacobs,
in the paper of 2012 “map the theorisation in public sector accounting research. As
such, my aim was to identify what was happening” (Jacobs, 2013, p. 112) using the
framework developed by van Helden and Goddard in a large-scale analysis which
shows that from 758 papers. The main findings are that only 47% of the papers used
a ground theory and within them the two most popular theories are neo-institutional
theory for 25% and economic theory for 20% (Jacobs, 2012, p. 5) which tend to
reinforce the initial findings we had with Professor van Caille.
Classical Neo-institutional theory was used by (Covaleski, Dirsmith, &
Michelman, 1993), based on (DiMaggio & Powell, 1983; Meyer & Rowan, 1977)
they stress the importance of organizations conforming to societal norms of expected
practices in order to “express and demonstrate a conformity with institutionalized
rules and expectations” (Covaleski et al., 1993, p. 76). Furthermore “power condi-
tions the decoupling that may take place between external imagery and internal
social and technical operating processes” (Covaleski et al., 1993, p. 78).
This idea of “isomorphism” (DiMaggio & Powell, 1983, p. 149; Meyer & Rowan,
1977, p. 355) and “legitimacy” (DiMaggio & Powell, 1983, p. 150; Meyer & Rowan,
1977, p. 353) the main trend to multiple research in public accounting.
Increasing legitimacy is done by “incorporate the practices and procedures
defined by prevailing rationalized concepts of organizational work and institutional-
ized in society” (Meyer & Rowan, 1977, p. 340). “An organization that incorporates
in its formal structure practices and procedures that are institutionalized in society
increases its legitimacy and its survival prospects (…) Accounting practices and
personnel selection among other technical procedures ‘become taken-for-granted
means to accomplish organizational ends’and, as institutionalized techniques, they
‘establish an organization as appropriate, rational, and modern” (Gomes, Carnegie,
& Rodrigues, 2008, p. 1149).
This incorporation of non-binding rules creates what we call an isomorphism
(DiMaggio & Powell, 1983, p. 149). Isomorphism is “the constraining process that
forces one unit in a population to resemble other units that face the same set of
environmental conditions” (Gomes et al., 2008, p. 1150).
DiMaggio and Power identified three empirical forms of isomorphism: coercive,
mimetic, and normative. (DiMaggio & Powell, 1983, p. 150):
– “Coercive isomorphism results from formal and informal pressures exerted on

organizations by other organizations upon which they are dependent as well as
cultural expectations in the society in which organizations function” (DiMaggio &
Powell, 1983, p. 150). It came from political influence and legitimacy; therefore,
pressures may be attributed to government mandates, such as certain accounting
practices and practical procedures of international standards adoption (ISO 9001).
– Mimetic isomorphism emerges under uncertainty as a powerful force that encour-
ages imitation. Organizations will model themselves on similar organizations in
their field whose practices are considered to be legitimate.
– Normative isomorphism is derived from two key aspects of professionalization:
formal education and professional networks that span organizations and across
which new models and practices diffuse rapidly (DiMaggio & Powell, 1983,
p. 152).
These three forms of institutional pressures are useful categories for understanding
the actions of stakeholders and can be applied in public accounting today. More
especially, the questions we’ve raised before have already been theorized by neo-
institutional theory since “the role that organizational actors in their fields play
in interacting with the environment and interpreting the meanings of the contexts
to construct and re-construct their environment” (Robson, Humphrey, Khalifa, &
Jones, 2007, p. 415).
To sum up, Neo-Institutional theory states that organizational actors try to increase
legitimacy by increasing isomorphism. In accounting field this happens quite often
when, for instance, European Community passes the Regulation (EC) No 1606/2002
of the European Parliament and of the Council of July 19, 2002 on the application
of international accounting standards. This regulation decides to adopt international
accounting standards made by a private standard setter for all the listed companies.
This regulation does include coercive and mimetic isomorphism which we point out
in the following sentences:
"(2) In order to contribute to a better functioning of the internal market, publicly traded
companies must be required to apply a single set of high quality international accounting
standards for the preparation of their consolidated financial statements. Furthermore, it is
important that the financial reporting standards applied by Community companies partici-
pating in financial markets are accepted internationally and are truly global standards. This
implies an increasing convergence of accounting standards currently used internationally
with the ultimate objective of achieving a single set of global accounting standards.
(5) It is important for the competitiveness of Community capital markets to achieve
convergence of the standards used in Europe for preparing financial statements, with
international accounting standards that can be used globally, for cross-border transactions
or listing anywhere in the world
(6) On 13 June 2000, the Commission published its Communication on “EU Financial
Reporting Strategy: the way forward” in which it was proposed that all publicly traded
Community companies prepare their consolidated financial statements in accordance with
one single set of accounting standards, namely International Accounting Standards (IAS),
at the latest by 2005.
(7) International Accounting Standards (IASs) are developed by the International
Accounting Standards Committee (IASC), whose purpose is to develop a single set of
170 C. Tsatsis
global accounting standards. Further to the restructuring of the IASC, the new Board
on 1 April 2001, as one of its first decisions, renamed the IASC as the International
Accounting Standards Board (IASB) and, as far as future international accounting stan-
dards are concerned, renamed IAS as International Financial Reporting Standards (IFRS).
These standards should, wherever possible and provided that they ensure a high degree
of transparency and comparability for financial reporting in the Community, be made
obligatory for use by all publicly traded Community companies.” (European Parliament
and of the Council, 2002)
Agent-Principle theory takes the problem in the opposite way. Since Neo-
Institutional theory tries to identify how legitimacy can be increased, Agent-Principle
theory states how asymmetry information impeaches the market to work properly
and could lead to market failures.
Principle (P) hires an Agent (A) for a specific task but the asymmetry information
leads to the point that the principle cannot motivate the agent. The example of the
“traveller in an unknown area who cannot be sure a taxi driver takes the best route
to a destination” is the best example (Broadbent et al., 1996, p. 266).
Broadbent et al. (1996) argues that asymmetric information could be either hidden
information from the agent (known as adverse selection), either hidden action for
the agent (known as moral agent). Adverse selection is an ex-ante problem which
can be solved by the clear specification of the relationship between resource inputs
and outputs. Moral agent problem is an ex-post problem which according to authors
principal is uncertain ex-ante and requires the same utilities as ex-post.
In public sector accounting, the issues were more about accountability (Broadbent
et al., 1996; Mayston, 1985, 1993). Akerlof theory is used as well for healthcare
sector (Belarbi, El-Refae, & Abu-Rashed, 2012; Dassiou, Langham, Nancarrow,
Scharaschkin, & Ward, 2015). Akerlof, in the 70s, shows up that under certain
conditions of asymmetry market could collapse.3
This asymmetric information leads to the adverse section which occurs when the
seller does not disclose all the information to the buyer. Researchers tend to prove
that the threat of the end of business relationship thought reputation over the long
run dissuade the seller from selling inferior quality products (Allen, 1984; Kaplan,
Roush, & Thorne, 2007; Rogerson, 1983; Seal & Vincent-Jones, 1997; Shapiro,
1982). Akerlof model was then adapted for other markets such as Hotel Quality
(Fernández-Barcala, González-Díaz, & Prieto-Rodríguez, 2010), audit firms (Kaplan
3 (1)It states that this market could find four kinds of cars based on two kinds of categories, new or
used cars and “good” or “bad” cars (Akerlof, 1970, p. 488).
(2) The seller cannot know the quality of new cars just as the buyer; therefore, both hold the
same information. On contrarious, the quality of bad cars is well known by the seller which the
purchaser does not.
(3) The asymmetric information leads dishonest sellers to sell bad quality used cars (or lemons)
at good quality prices. Eventually, buyers of used cars who cannot distinguish between good and
bad quality cars use price by only offering a price as if the used car is of bad quality.
(4) This lead that lemons cars drive most of the good quality cars out of the marketplace since
sellers of good quality used cars are unwilling to accept the price of a bad quality used car and the
market for used cars fails.
et al., 2007). In public sector, Lane found this problem in the public enterprises
efficiency.4
10.3 Similarities and Convergence, First Insights
As it was shown by (Devos, Van Landeghem, & Deschoolmeester, 2011), the link
between Agency and Lemon Market theory is the information asymmetry, moral
hazard, and adverse selection.
Similarities between those three models (1) Agency theory and (2) Lemons Theory
(3) Institutional theory are straightforward:
First, they all use a two-actor relationship with an initiator and a recipient, a
sponsor, and a beneficiary. The initiator acts toward the recipient such as (1) “traveler
hiring taxi,” (2) “buyer buying a car,” and (3) “European commission imposing IFRS
to private firms to gain international legitimacy.”
The initiator is, respectively, (1) the principle, (2) the buyer, (3) institu-
tions/organizations while the recipient is (1) the agent, (2) the seller, (3) the
“institutional entrepreneur” (Maguire, Hardy, & Lawrence, 2004).
Second, the relationship is not equal. Agent and lemon theory are based on the
economic concept of asymmetric information which supposes that the lack of certain
information from the initiator. Institution theory used the concept of legitimacy which
should be conformity to values and social fact (Oliver, 1991, pp. 148–149). There-
fore, organizations tend to gain legitimacy which does support a leak of relationship
between the initiator and the recipient. This relationship is always on the advantage
to the recipient which holds more information/legitimacy.
The only difference is in the outcome of this strategy in the behavior and results
of the recipient in the face of the expectations of the recipient:
– Agent theory shows that results of the recipient are different or against the
expectations of the initiator.
– Lemon theory shows that in the long run recipient deviates that much which gives
the signal to the initiator that the “the game’s rigged.”
– Institutional theory shows that results of the recipients embrace and even exceed
the expectations of the initiator.
Therefore, the problem for the initiator is how to control that the action he
undertakes is understood and executed by the recipient.
4 “When public enterprises are transformed into joint-stock companies, it is vital that the positions
as managers be put up for bidding. Often the managers in place demand huge pay raises when
there is a switch from the one governance form to the other, but this is an example of opportunistic
behaviour, or self -interest seeking with guile. Actually, this is a version of the so-called lemons
problem” (Lane, 2000, p. 267).
172 C. Tsatsis
This is exactly the problem the Belgian legislator had with its eight recipients5
which could eventually overpower the will of the legislator. The next section will try
to identify some examples of this reform.
10.4 Two Opposite Examples if the Belgian History

of Accounting Reform
As stated before, Belgium is European federal country with regions and commu-
nities. This means that the federal Government gives the autonomy to regions and
communities to have their operational freedom. This operational freedom goes hand
in hand with the freedom to operate accounting in the way which seems suitable for
those entities.6
Besides, Belgium must report, as a single entity to supranational level, a bunch of
economic indicators which are derived either for national accounting systems (ESA
2010 (Eurostat, 2013))7 either for their accounting system (Six-Pack directive in
2011 (Council of EU, 2011; Moniteur belge, 2014b)).
Public accounting in Belgium from its creation until the beginning of this decade
was purely a budget accounting system. Even if in the notion of assets, balance
sheet, depreciation, have been defined since 1963 for the public accounting law
(Moniteur belge, 1963), the modernization of accounting has really started in 1991
(Moniteur belge, 1991) by creating the “Commission de normalisation de la compt-
abilité publique”8 which had to establish the chart of accounts which will allow the
integration of all budgetary, financial and patrimonial operations, and prepare the
subsequent legal rules.
5 (1)The Federal state, (2) Wallonia region, (3) Brussels region, (4) Flemish region, (5) French-
speaking community, (6) Dutch-speaking community, (7) German-speaking community, (8)
Brussels Agency of French community.
6 «The autonomy of the Communities and Regions in setting their budgetary and accounting rules
is enshrined in the special law of 16 January 1989, but it can only be exercised in compliance with
general provisions common to all entities, which must be laid down by law. Federal legislation will
also have to respect these general principles. Pending these principles are enacted, the provisions
of State accounting continue to apply to each of the entities and any modification must take into
account the repercussions for the Communities and the Regions» (La Chambre, 2003).
7 «The European Union expects Member States to provide comparable economic information,
including public interventions. This aspect is gaining even more importance in the framework of
Economic and Monetary Union, of which Belgium is a part. To achieve the desired uniformity, the
European Commission has developed an important system of accounting standards, the European
System of Accounts, the latest version of which dates from 1995 (ESA 95). An essential part of it is
devoted to the intervention of the public authorities» (La Chambre, 2003).
8 Which can be translated by “Regulatory Commission of Public Accountancy.”.
This work will end up in 2003 by the publication of three legal rules (Moni-
teur belge, 2003a, 2003b, 2003c) which will set the new national framework public
accounting rules in Belgium called FEDCOM.9 These laws were
– A general law with 19 key principles applicable to all eight public entities
(Moniteur belge, 2003a)
– A specific law for the Federal County which gives all the needed information to
run the federal state (Moniteur belge, 2003c)
– A specific regulation which modifies the power of the Cour de Comptes in
accordance with the new regulation (Moniteur belge, 2003b)
We should stress out that the eight federate entities passed their own regulations
in order to comply with the first regulation (Moniteur belge, 2003a) (see Annex 2).
Let’s take two examples of different paths taken by the legislator:
The federal state, due to a weak political support the reform was
delayed/postponed. Two ministers in charge of this project in 2004 and 2007 had
expressed large reserves about the opportunity of the project in the face of its cost.
(Khrouz, 2010, p. 250; Tsatsis, 2012). “The view of the Government was presented
by Ms. Freya Van Den Bossche, budget minister. She expressed the non-partisan
introduction of double bookkeeping, mainly because of high costs associated with
them and pleaded for budget accounts on a transaction basis” (Cour des comptes,
2007, p. 29).
In 2011, we already pinpoint that “(1) after the introduction, on January 1st, 2009,
within the five pilot departments, of the aforementioned law of May 22nd, 2003, this
same law as well as the related Fedcom IT project entered into force in only four
departments on January 1st. 2010, six years later; 2 since the launch of Fedcom, only
one decree of execution has been approved and published, whereas it is about twenty
decrees10 of execution which are awaited” (Ghysels, Phan-Thanh, & Tsatsis, 2011,
p. 12).
In a former publication, M. Alain Bouchat, general inspector of finance, recalls that
politicians have decided not to apply the reform in its entirety. «Indeed, the Council
of Ministers of 9 July 2004 opted for a limited solution focused on transaction-based
budget accounting, reporting in accordance with the international standards SEC
95 and COFOG 98, a management of debts and receivables as well as a analytical
9 As we quoted in 2009 (Khrouz & Tsatsis, 2009, p. 143) “The FEDCOM accounting reform of
the Belgian State aims to modernize the federal accounting and integrate into one computerized
accounting system (SAP). This new accounting system will be built in accordance with generally
accepted accounting principles and will meet both European accounting standards and interna-
tional standard IFRS and IPSAS. It will also make easier the financial analysis of annual accounts
and allow the establishment of a permanent internal control. With this new system, the state will now
have a new tool which will go beyond the traditional budgetary system of public accounting thanks
to the addition of an accounting system inspired by the private sector model. The federal accounting
system will include: (1) budgetary accounting for control purposes, (2) financial accounting for
stakeholders information through financial statements and (3) cost accounting in order to calculate
the cost of some services, probably according to activity-based cost management.”.
10 The list of those decrees is in Annex.
174 C. Tsatsis
component» (Bouchat, 2008, p. 27). Sir Bouchat deplore these delays: «The argu-
ments put forward and the delays, even the blockages noted in the implementation of
a reform so long prepared, however, give the impression that “history passes again
the same plots”. Indeed, the dissatisfaction of the leaders themselves with the state
budget and accounting management tools is not new (…)» (Bouchat, 2008, p. 28).
Mr. Bouchat indicates that this delay in the reform creates significant problems in the
information transmitted by the State to others: «In its 164th observation, the Court
of Auditors reports the results of the checks it has carried out on the general account
of the State (…) Examination of the accounts of changes in assets for the years
2004 and 2005 revealed that these accounts no longer give a true and fair view of
the State’s wealth situation. Property, plant and equipment recorded in the property
accounts do not consider significant changes, such as the sale of buildings. In the
absence of unambiguous calculation bases and reliable basic information, the recog-
nition of direct and indirect tax claims is imprecise. Successive postponements of the
entry into force of the new accounting law of 22 May 2003 are partly responsible
for this situation» (Bouchat, 2008, p. 35).
In 2013, the question has been raised again “we see that from year to year, the
federal level has each time had the concern to postpone the entry into force - specially
to avoid any obligation. How can we explain this lack of willingness to come to an
accountability that we did not hesitate to implement at the other levels of power?
Companies have been doing it for a very long time” (Christiaens et al., 2013, p. 22).
The latest report of Court of Auditors about federal-state accounts indicates that
not only the latest two sets of accounts don’t give a true picture of the accounts, but
furthermore, points out that the legislative framework is not yet completed while, in
the meantime, this body of Court of Accounts have to certify accounting from the
2020 accounts in accordance of the 2011/85/EU Directive.11
In the opposite way, the Region of Brussels, enforce the low very quickly. «The
Brussels-Capital Region and the German-speaking Community have already taken
the plunge» (Baumann, 2008a, p. 7).
11 “While the quality of the general administration’s annual accounts had gradually improved until
2016, the Court notes that it has deteriorated since then. For example, the first version of the 2018
Annual Accounts had gross errors that could have been detected by a front-line check and limited
analytical verification.
Moreover, the second version of these accounts still does not give a true picture of the financial
and wealth situation of the general administration. For some topics, many transactions are not
recorded in accounts or are incorrectly recorded. This is especially the case for tangible and
intangible assets, inventories, tax receivables and financial resources.
(…) Finally, the Court points out that the legislative and regulatory framework remains incom-
plete and that current internal control measures are insufficient, which is an obstacle to a structural
improvement in the quality of annual accounts. This improvement is, however, essential in view of
the Court’s certification of the annual federal government from fiscal year 2020, in accordance with
the law of May 22, 2003”.
The regional regulation goes further than the law since it not only organizes the
general accounts, the budget accounts, and subsidies but it takes support on this
accounting reform to completely also reorganize the whole mode of internal control
and specific accounting control in the respect the philosophy of the abolition of the
prior approval of the court of auditors. This ruling also goes further since it gives the
Court of Audit the role of the general account to attest, as does an external auditor
for a commercial company, that the accounts reflect the reality of operations.
The regulation is organized around a new computer tool. This choice is imposed by
the will to «better administrate public authorities can no longer be conceived without
the use of modern communication and information technologies» (Gruson, 2008,
p. 78). Then, «ERP software offers, (…) an extensive range of real-time integrated
features such as inventory and asset management, human resources management,
project management, cash management, workflow and authorizations (electronic
signature), internal control, information system, etc. (…) The ministry did not need
a new management system as it already had an ERP package. The choice of this
management system was confirmed by the evaluation made by a consulting firm:
SAP is the appropriate management system for the Ministry» (Gruson, 2008, p. 78).
As Mr. Gruson reminded members of the federal government in 2002 «At the tech-
nical level, for the implementation of the double-entry accounting system, the Region
of Brussels-Capital has already, since 1999 and after a global analysis, and while
remaining within the framework of the coordinated laws of 1991 on the accounting
of the State, the implementation of an ERP-based software package operating on this
principle, which entailed, in addition to the necessary training of users, the modifica-
tion of certain procedures and the introduction of a workflow system and electronic
approval, for example» (La Chambre, 2002, p. 14).
“A word of conclusion (…) what the Brussels-Capital Region did modestly should
inspire the federal and other regions. They started small, but still with SAP. Everything
was not perfect, but little by little, it improves. The federal government is backing
down because the cost of the inventory is going to be very high, because the computer
problems have not been solved yet. Because the fact of showing the assets and
management in accrual basis rather than in cash basis are all brakes that really
delay the entry into force”» (Christiaens et al., 2013, p. 27).
Last but not least, the latest set of accents of the Region of Brussels has not been
approved by the Court of Audits since several errors of reporting do exist. Although,
several subsidiaries (21 up to 23) of this Region have been approved either without
any note either with one or several notes.
176 C. Tsatsis
10.5 Discussion
This paper tries to explain the theoretical construction of the model which tries to
analyze how the outcome of a particular reform designed by an initiator could deviate
from the initial willpower of the initiator.
We have seen that existing theories help us to explain why the outcome may
be either better than expected (isomorphism), either worse than expected (agent
principal), or even completely sabotaged (market for lemons).
Our goal is to test and improve this model though a practical case which is
the public accounting reform in Belgium. Since Belgium is a federal state, public
accounting reform offers us nine different recipients of the same reform.
In this paper, we try to explain the evolution over time of the reform of two
extremes beneficiaries. The first one tries whether to postpone, or to reduce the
scope of the reform, while the second tries to go beyond this reform by implementing
the reform even before it exists.
We have seen that the national standard setter (initiator) is often obliged by the
European level to go beyond their initial willpower. This European sponsor seems to
have more coactive power to beneficiaries since the court of Audit seems to sound
the alarm of the non-conformity of a legal rule desired by Europe.
The main limitation of this example is that we deal with the legislator as a unique
consistent body ignoring that, from the time we started our retrospective until now,
more than four governments have been given the role of this standard setter.
The next step in this study is to propose a analysis grid. This analysis would
be made by exploring secondary date combined to interviews and trials in order to
fine-tune the analyses to the subject if this research. This research will normally take
place during 2020.
10.6 Conclusion
We are confident that by combining present theories, we can understand how and
why the outcome of a reform managed by a recipient could deviate from the initial
design made and asked by the initiator.
We want to test this hypothesis based on the Belgian public accounting reform
which offers a huge room for analysis. Thought, we are creating a analysis grid in
order to collect, compile, compute, and report findings.
Annexes (Mostly in French)
Annex 1: List of Royal Decrees Provided for in the Draft Law

on the Organization of the Budget and the Accounts
of the Federal State. Source: (La Chambre, 2003, p. 117, DOC
50 1870/004)
Article Sur proposition de Objet

5 Fixation du plan comptable
8 Ministre du Budget Modalités de la constatation des droits
14 Conditions auxquelles doivent répondre les
pièces justificatives Conditions de leur
conserva lion Conditions de leur mise à
disposition du contrôle interne et externe
15 Ministres des Finances et du Budget Modalité de tenue des livres et journaux
comptables
17 Budget Règles complémentaires de présentation
des comptes annuels
18 id Règles relatives à rétablissement et à la
publication du rapport annuel
24 id Dérogation par limite de somme, à la règle
qui interdit la notification des contrats et des
arrêtés de collations de subventions avant
leur imputation sur crédit d’engagement
29 id Règles applicables aux services ou aux
catégories de service en matière
d’organisation des opérations comptables et
budgétaires Définition des fonctions de
décision d’exécution, d’enregistrement, de
conservation et de surveillance
31 id Modalités d’organisation et d’intervention
de l’audit interne en matière de budget et de
comptabilité
33 Premier ministre et ministre du Budget Organisation du contrôle administratif,
budgétaire et de gestion
37 Finances et Budget Comptables justiciables de la Cour des
comptes PROJET TERMINE
48 Budget Conditions d’octroi des subsides
73 id Forme dans laquelle est établi le compte
d’exécution du budget de 1 administration
générale
78 id Règles de présentation du budget des
services administratifs à comptabilité
autonome
(continued)
178 C. Tsatsis
(continued)
Article Sur proposition de Objet
80 id Règles de paiement des dotations aux
services administratifs à comptabilité
autonome
organismes administratifs publics
87 id Date d’établissement du budget des
organismes administratifs publics et règles
de transmission aux autorités compétentes
89 id Modalités de blocage des versements des
interventions de l’Etat en faveur des
organismes administratifs publics en cas
d’absence de budget
entreprises d’État
101 Budget et Ministre dont l’entreprise Règles de contrôle administratif et
relève budgétaire de chaque entreprise d’État
107 id Conditions pour le paiement d’avances dans
une entreprise d’État
109 Finances et Ministre dont l’entreprise Intérêts pour les dettes et créances entre
relève l’État et une entreprise d’État
122 Budget Organisation et coordination des contrôles
sur place exercés sur l’emploi des
subventions
133 Budget et Finances Report de l’entrée en vigueur de la loi (au
plus tard 1e janvier 2005)
In the 1st of January of 2019, only the first decree has been passed.
Annex 2: Public Accounting in Belgian Communities

and Regions (Source: Ph.D. Thesis of the Author)
Entités Textes légaux Référentiels explicites Entrée en vigueur Composantesa Particularités
A B C D E
Région wallonne et Décret portant Loi du 16 mai 2003 01 janvier 2012 R R A A R Ont été modifiée en 2013
communauté française organisation du budget et – SEC 95 pour intégrer toute une
de la comptabilité des série de dispositions
Services du consécutives au «Traité
Gouvernement de la sur la stabilité, la
Communauté française coordination et la
Décret portant gouvernance au sein de
organisation du budget et l’Union économique et
de la comptabilité des monétaire»
Services du
Gouvernement wallon
Communauté flamande Décret du 8 juillet 2011 Loi du 16 mai 2003 - 1er janvier 2012 R R M P A Ce décret lui-même
10 Why Some Public Accounting Reforms …
réglant le budget, la SEC 95 remplace un décret plus

comptabilité, l’attribution ancien (7 mai 2004) qui
de subventions et le complète certaines
contrôle de leur matières
utilisation, et le contrôle Il y ajoute, notamment de
par la Cour des Comptes façon explicite la
référence aux SEC 95
Communauté Décret du 25 mai 2009 Loi du 16 mai 2003 - 1er janvier 2010 R R M A P Adaptation de la loi du 22
germanophone relatif au règlement Loi du 22 mai 2003 - mai 2003 en tenant
budgétaire de la SEC 95 compte des dispositions
Communauté du SEC95
germanophone
(continued)
179
(continued)
180
Entités Textes légaux Référentiels explicites Entrée en vigueur Composantesa Particularités

A B C D E
Région de Bruxelles Ordonnance organique du Loi du 16 mai 2003 - 1er janvier 2007 R R M M P Une des premières entités
Capitale. 23 février 2006 portant SEC 95 - COFOG à avoir mis en place la
les dispositions réforme. En pratique
applicables au budget, à composante analytique
la comptabilité et au embryonnaire, système
contrôle poussé de contrôle
(Gruson, 2009)
Commission Décret du 24 avril 2014 Loi du 16 mai 2003 - 1er janvier 2016 R R M M R Composante de contrôle
communautaire portant les dispositions SEC 95 – COFOG (interne, gestion, externe)
française applicables au budget, à – TFUE - Traité sur la prévue par le décret, qui,
la comptabilité et au stabilité (…) de puisqu’il est le plus récent,
contrôle des services l’UEMb intègre les dernières
administratifs de la exigences en matière de
Commission comptabilité publique
communautaire française
et des organismes
administratifs publics qui
en dépendent
a Les cinq colonnes correspondent à: A Comptabilité budgétaire; B Comptabilité générale; C Composante analytique; D Consolidation; E Certification des
comptes. Les sigles correspondant à P Présent; A Absent; R Présent et fait référence à la réglementation, S Présent sans référence à la réglementation (disparité);
M Mention (arrêté à prévoir)
b Traité sur la stabilité, la coordination et la gouvernance au sein de l’UEM
C. Tsatsis
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Part III
The Role of the University
Chapter 11
The Importance of Ethics and Values
for the Students in the Polytechnic
of Guarda—Portugal
Francisco Tomé and Ermelinda Oliveira
Abstract Ethics and values are increasingly important for the pursuit of any profes-
sion. The purpose of this study is to analyze the attitude of students of the accounting
degree of the first year of higher education and the existence of ethical values and
behaviors necessary for their professional future. It is intended to follow the evolu-
tion of ethical behavior throughout their academic career. The methodology used was
the elaboration of a questionnaire that evaluates to what extent the moral intensity,
and its several dimensions, are associated with the ethical decision-making. It was
then administered to 70 students of the Management and Accounting degrees of the
1st year of higher education in Polytechnic of Guarda. Guarda Polytechnic Institute
is located in a small town in the interior of Portugal. This study deals only with
the student’s opinions. In the next stage, the SPSS program provided a statistical
treatment of ethical and demographic variables (age and gender), in order to, detect
phenomena potentially associated with ethical behavior. The results obtained from
the statistical treatment are compared with similar studies and the underlying theo-
retical framework. The analysis of the results allowed to identify the practices most
used by the students, their level of seriousness, as well as to identify the inhibiting
factors of academic fraud. Finally, reflections on the implications of the practice of
fraud and ways to inhibit them are presented.
Keywords Fraud · Ethical decision-making · Moral intensity · Higher education
11.1 Introduction
Behaviors based on codes of ethics are common practice in most institutions and in
working life. Its application creates a solid organizational culture, avoids friction,
and promotes well-being in most organizations. The studies of Gama et al. (2013),
F. Tomé (B) · E. Oliveira

Insituto Politécnico da Guarda, Avenida Dr. Francisco Sá Carneiro, n. 50, 6300-559 Guarda,
Portugal
e-mail: tome@ipg.it
https://doi.org/10.1007/978-981-15-6366-9_11
188 F. Tomé and E. Oliveira
McCabe et al. (2001), and Witherpoon et al. (2012) demonstrate the importance
of training, values, and organizational culture as the key to the economic success
of most developed countries. The purpose of teaching is not limited to developing
technical skills but also ethical values and principles that develop strong human skills
essential to professional success. As higher education is the last step before entering
work, therefore, brief training in the area of ethical behavior should be given utmost
importance.
The main objective of this study is to learn about the perception of the students
of the Polytechnic Institute of Guarda about the frequency of fraud practices,
motivations, and inhibiting factors for fraudulent practices.
11.2 Empirical Studies Conducted on the Theme
Research on the topic of ethics and professionalism in organizations has been

presented. There are numerous published articles, for example, Bretag et al. (2011),
McCabe (1999), Donald et al. (1999), Hilbert (1987), etc., that have generated some
discussion and controversy, alerting to the impact on professional and social codes
of conduct (such as the sense of injustice for those students who are compliant with
the regulations), but also on reputation and quality of the higher education institu-
tions that confer the academic degrees where the frauds occur. In addition to these
effects, the impact on business life, the reputation of policy, and economic decision
makers and agents in a particular country (corruption, fraud, and tax evasion) cannot
be overlooked. Academic dishonesty also creates problems for teachers. Academic
dishonesty does not have a universal definition.
From the different readings, we found that the difficulty of defining the concept
of academic fraud is also associated with the different ways of quantifying it, which
obviously complicates the comparisons of the several studies carried out at an inter-
national level, as stated in Teixeira and Rocha study (2010). Along with these difficul-
ties, other authors such as Gama et al. (2013), criticize the reliability of respondents’
responses on a controversial, personal, and ethical issue.
Although these obstacles remain, a number of authors have indeed shown in their
results an increase in a fraudulent practice in assessments in a number of countries,
thanks to the widespread use of new communication technologies, and in particular,
to a decrease in students’ sense of responsibility and pride. This trend is particularly
evident in the countries of southern Europe and Brazil, as evidenced by McCabe et al.
(2001), Teixeira and Rocha (2010), and Crittenden et al. (2009), in their studies on
student academic fraud in higher education. We can say that the phenomenon of fraud
also has a cultural and social dimension associated with the context and the perception
of a greater permissiveness of parents and teachers, as well as a society towards
fraudulent attitudes. With regard to the type of practices most used, a predominance
of “plagiarism and copy in written tests” is clearly evident, as reported in the study
by Witherpoon et al. (2012).
11 The Importance of Ethics and Values … 189
Regarding the reasons that lead Portuguese students to commit fraud, from the
study mentioned above, the answers indicated as the most important are the “pursuit
of educational success” and “better grades” and as a practice of inhibiting fraud,
“a greater discussion and dissemination of the professional relevance of codes of
ethics”, as well as “greater proximity to teachers”.
11.3 Methodology
This study included the following steps: exploratory readings on the topic of profes-
sional ethics, preparation of the questionnaire, pretesting, information collection,
database creation, statistical treatment, data analysis, and conclusions. The statis-
tical program used was the SPSS program. In the statistical treatment, we used the
univariate and multivariate analysis of the variables, and also parametric tests and
factorial analysis.
Students from the courses of Accounting and Management participated in this
study, as it is in these degree courses where ethics and professional responsibility is
increasingly important for the practice of their professional functions. In addition, the
questionnaire was administered only to students who attend the first year of higher
education, because it is intended over the next few years to monitor the evolution of
these students during their academic path and to analyze their changes in ethical and
professional values during their stay in Guarda Polytechnic, in order to, compare it
with other studies carried out at a national level.
The students enrolled for the first time in the degrees of Management and
Accounting in the academic year 2017–18 (71 in the Management degree course and
44 in the Accounting degree course) participated in this study. Thus, we collected a
non-probabilistic sample of students who attended Financial Accounting classes on
April 10, 2018; (44 questionnaires) and 37.1% for the Accounting degree course (26
questionnaires).
As already mentioned, the questionnaire was prepared and adapted based on the
study carried out by Gama et al. (2013), for higher education at a national level
The questionnaire presents only closed questions, and some innovations related to
previous studies were introduced. In order to enhance the honesty and diversity of
responses, Likert scales were created with five evaluation levels. In question 12 of the
questionnaire, a level of intensity from 0 to 10 was created to assess the seriousness
of the fraud, and thus to express more realistically the diversity of opinions. In order
to value ethics and the importance of values, an additional question was created at
the end of the questionnaire (question 15) to evaluate and raise students’ awareness
about the importance of developing ethical values and human skills for professional
success.
This questionnaire is subdivided into three parts: the first one related to the
sociodemographic and academic characterization of the students; the second part
concerning the type of fraud practiced, the frequency and the degree of serious-
ness attributed to the students, and finally, the third part questioning students about
the reasons that determine academic fraud and actions that may best inhibit it, as
indicated by Malgwi and Rakovksi (2009).
The data collected through a non-stratified sample was performed in the classroom
after clarifying the doubts about the questions of the questionnaire and ensuring the
confidentiality and anonymity of the answers.
11.4 Data Analysis
The main purpose of the first part of the questions was to characterize the students
in academic terms, but also to know if they had knowledge of the school rules about
the ethics and values of the institution they attend.
The analysis of data referring to question 1, shows that the respondents present
an average age of 21.6 years, mode 19 years. Through question no. 2, it is found that
70% are female and 30% male; which is in line with the general trends of greater
participation of women in higher education. For 72.7% of the students, the course
was the first option of choice, while for 57.7% from Accounting it was only the first
option. Concerning question no. 5, it is verified that 45.8% of Accounting students
have already failed in a test held during the 1st semester, while only 34% of students
from Management failed.
From the analysis of question nº 7, it is possible to affirm that most students
know that there is a school regulation on ethics and values in the institution (87%
of the students surveyed attended Management and 72.7% of the students attended
Accounting). However, only 2 students (4.6%) from Management read the regu-
lations, while in the Accounting degree course the percentage who read these
regulations rises to 28%.
In the second part of the questionnaire, students were asked if they considered
academic fraud acceptable. From the data analysis it was verified that only 3 students
from Management, corresponding to 7.5% of the respondents, answered affirma-
tively; while the students from Accounting, who from the outset had greater knowl-
edge of the regulations, 30.4% answered that committing academic fraud is perfectly
acceptable. From data crossing, we observed that from those who read the regulations,
only one of them agrees with the academic fraud.
Regarding the types of fraud most committed by students, respondents reported
predominantly that they have already committed the following frauds: providing
answers to a colleague on the exam (64.3% admit having already done it), copying
answers by a colleague in the exam (52.9%), copying assignments from the internet
(45.7%), and consulting unauthorized material in a written test (45.7%).
Of the frauds indicated in the questionnaire, the least practiced by students are
the purchase of a work from a colleague (94.3% answered that they never did it), not
participating in a group work but benefiting from a collective grade (94.3%), as well
as presenting the same work in different disciplines (88.6%), and selling their own
work to colleagues (88.6%). These results are close to the conclusions of the study
carried out by Gama et al. (2013), that suggest the classic forms of fraud committed
during the most frequent tests.
Students were also asked how often they committed these types of fraud. The
data made it possible to conclude that frauds most often committed are copying
responses by a colleague in the exam, providing answers by a colleague in the exam,
and viewing unauthorized materials in a written test. This suggests the existence of
some complicity and mutual aid among students in tests and the existence of some
tolerance for this type of fraud.
A nonparametric Mann-Whitney test was used to investigate the existence of
significant differences in relation to the following variables: (1) gender, (2) course,
(3) failure, and (4) the reading of regulations. It was found that regarding these four
variables there are no significant differences, for a level of significance of 0.005.
When asked about severity level associated with the thirteen types of fraud studied
on a scale from 0 to 10, respondents consider it more serious: not to participate in
a work benefiting from the group grade (7.04), to invent data in a written work and
buy a work from colleagues (7.0), as shown in Table 11.1. They do not consider a
fraud to obtain the collaboration of a family member (4.7) and provide answers to a
colleague in an exam (5.34), as shown in Table 11.1, which suggests the legitimation
of this type of fraud.
In the third part of the questionnaire the reasons that lead students to commit
academic fraud, on a scale from 1-nothing important to 5-very important, were eval-
uated. The answers suggest that the most important reasons that lead them to commit
fraud derive first from the need for success in a discipline they have already failed
Table 11.1 Average related to the severity of academic fraud (Scale from 0—irrelevant to 10—very
severe)
Values from 0 to 10
Buying a work from a colleague 6.96
Consulting unauthorized materials in a written test 5.77
Getting family collaboration 4.77
Authorized plagiarism of a colleague’s work 5.66
Copying answers from a colleague in a written test 5.44
Copying assignments from the Internet 5.61
Not participating in group work, benefiting from the group grade 7.04
Inventing data in a written work 7.00
Presenting the same work in different disciplines 5.66
Selling to colleagues works carried out by themselves 6.89
Providing answers to a colleague in an exam 5.34
Lending colleague works done by themselves so that they present them 5.93
as theirs
Allowing a colleague to share the formal authorship of a work without 6.11
having participated in it
Table 11.2 Main reasons for academic fraud

Average (Values from 1 to 5)
Successful safety in a discipline where he has already failed 3.55
Academic workload 3.26
Insecurity about the ability to achieve success that would not 3.31
otherwise be possible
Successful safety in a discipline where he has already failed 2.62
Insecurity about the ability to achieve success that would not 2.91
otherwise be possible
Regularity of fraudulent practice between colleagues 2.68
Insufficient pedagogical competence of teachers 2.90
Passivity of teachers in situations of fraud 2.69
Perception that the penalty is insignificant when fraud is 2.84
detected
Lack of knowledge about what good academic behavior should 2.53
be
Lack of debate on the subject in class with teachers 2.60
Competitive pressure among colleagues 2.47
(average 3.55), secondly from the high academic workload (average of 3.26), and
third from the feeling of insecurity about their ability to achieve the success that
would not otherwise be possible (mean of 3.31), as shown in Table 11.2.
The data show that the most relevant reasons are related to the past experience
of the student, the difficulty in obtaining approval in the discipline, and the lack of
time to study, which apparently leads him/her to opt for fraud to succeed in the test.
Insecurity and lack of knowledge also motivate fraud as a way to succeed.
The least important reason, according to respondents, is the competitive pres-
sure among colleagues (average of 2.47) which is in line with other studies already
conducted for students from Economics and Management at a national level.
Regarding the three most important reasons, the Mann-Whitney test was used to
investigate the existence of significant differences in relation to the variables: (1)
gender, (2) course, (3) disapproval, and (4) the reading of regulations. It was verified
that in relation to these four variables there are no significant differences, for a level
of significance of 0.005.
Regarding the factors that may inhibit fraud (Table 11.3), students suggest a greater
involvement of students in the dissemination of good academic practices (average of
3.36), the existence of a close relationship between teachers and (average of 3.36)
the worsening of the penalties for fraudulent academic conduct (average of 3.03), as
shown in Table 11.3.
Although according to the opinion of the students, the worsening of the penalties
for fraud is a very important practice, the results also show a greater proximity of the
student with the teachers to discourage fraud, and more information and disclosure
Table 11.3 Averages concerning the importance of inhibitors of academic fraud

Academic fraud inhibitors Values from 1 to 5
Worsening of the penalties for fraudulent academic conduct 3.03
Existence of a close relationship between teachers and students 3.36
Involvement of students in the dissemination of good academic practices 3.36
Impediment of connected cell phones in the exam room 2.85
Use of surveillance mechanisms and electronic fraud detection 2.71
Attendance of academic competence development programs 3.00
Attendance of psycho-pedagogical support programs 2.88
Guarantee of anonymity in reporting fraudulent behavior of colleagues 2.78
Disclosure of a school code of conduct 2.83 2.83
Delivery of a declaration of authorship/originality of the papers submitted 2.64
for evaluation 2.64
Clarification sessions promoted by the school on good academic behavior 2.79
Attendance of subjects on ethics 2.59
Disclosure in the school environment of the names of students who 2.09
committed fraud
Existence of compulsory oral tests 2.32
of the institution’s code of ethics in order to reduce fraud in the future. This suggests
that more information can lead to more trust and loyalty.
The fraud inhibitors classified as least important in the opinion of the students are
the disclosure in the school environment of the name of the students who practiced
fraud (mean of 2.09), and the existence of compulsory oral tests (average of 2.32).
Disclosing the name of offenders and conducting oral tests are the mechanisms
that least please students to reduce fraud in academia. These results are in line
with the findings of the previously mentioned national study about Economics and
Management students.
In order to group the main reasons for fraud in categories, a factorial analysis of
the data was performed. From the analysis performed, three main components were
obtained, which explains 64.79% of the variance, as shown in Table 11.4.
From the information obtained, we can clearly identify three factors: the first
related to the student’s individual attitude towards fraud, centered on individual needs
for success (Factor 1), the second related to institution-installed routines (Factor 2),
and the third with institutional non-valuation with the fraud problem (Factor 3). Given
the small number of observations, we can only conclude that the factorial analysis
in this case is exploratory and not confirmatory.
These factors suggest the need for greater dissemination of the codes of ethics
among the students by the institution, lectures, and training actions to reduce
academic fraud. However individual and social factors are more difficult to change
in a short term.
Table 11.4 Reasons for academic fraud (Exploratory factor analysis)

Main components
1 2 3
Successful safety in a discipline you’ve ever failed 0.804
Insecurity about the ability to achieve success in another way 0.617
Modalities of evaluation 0.610
Little practical relevance attributed to curricular content 0.582
Insufficient pedagogical competence of teachers 0.687
Habit of fraudulent conduct since high school 0.862
Regularity of the fraudulent practice between colleagues 0.811
Perception that the penalty is insignificant when the fraud is discovered 0.653
Passivity of teachers in situations of fraud 0.756
Lack of knowledge about what good academic behavior should be 0.847
Lack of debate on the subject in class with teachers 0.652
Competitive pressure among colleagues 0.550
Nota KMO 0.787
Factor 1-Individual attitude—pressure to succeed;

Factor 2-Routines installed in the institution.
Factor 3-Institutional valorization with fraud problem.
Respondents were also asked about the competencies that they found most impor-
tant for their professional success. By analyzing the data, as expected, students are
aware of the importance of human and technical competencies for their profes-
sional success, given that 84.3% of students consider them both to be very important
(Table 11.5).
We can affirm that the role of the teacher to change ethical behaviors, as well
as the intrinsic motivation of students is quite limited, as confirmed by the study
of Sivrikaya Ahmet; “there is a low positive and significant correlation between
academic achievement score and extrinsic motivation interjected point” (Sivrikaya
2019). Some scholars contend that there are students who have a pathological urge
to cheat.
Table 11.5 Importance of

N Percentage (%)
technical and human skills
Technical skills 4 5.7
Human skills 2 2.9
Both (technical and human) 59 84.3
Total 66 94.3
11.5 Conclusion
The ethical perceptions regarding academic fraud of students in Management and

Accounting degrees of higher education sooner or later would have a great impact
and relevance on the business, social, and economic life of a country due to decisions
later taken by them and their mental code of values learned throughout his school
and personal life.
The analysis of the students’ answers allowed us to conclude that although the
majority of the students knew about the existence of school regulations in the insti-
tution, few read it curiously. In addition, while few students find fraud acceptable,
most of them end up with fraud in evaluations, in particular when consulting unau-
thorized materials, providing and receiving replies from colleagues, and copying
work over the Internet to obtain better grades. The less practiced frauds are related
to the purchase of work from colleagues, or to the benefit of a grade of a group work
in which they did not collaborate.
Regarding the level of severity attributed to each of the fraudulent tactics indicated
in the study, and since the students were already evaluated in the first semester, these
results suggest, the need to guarantee success in a discipline they have already failed,
so that their performance could be improved.
As for fraud-inhibiting practices, students suggest greater proximity to teachers
in disseminating good academic practice. However, they are against the disclosure
in the school environment of the names of students who have committed fraud and
they are against compulsory oral tests.
Finally, the exploratory factorial analysis allowed us to identify three explanatory
factors of fraud; the first focusing on the individual and personal attitude towards
risk, the second on the attitude towards institutional performance, and the third on
the interpersonal relationship.
We suggest that school regulations on values and ethics should be more widely
disseminated in the institution at the beginning of the academic year; the develop-
ment of activities to improve interaction and integration in the group, and a greater
proximity between students and teachers. On the other hand, we think that any type
of fraudulent practice should be penalized in such a way as to previously inhibit such
attitudes and foster a sense of justice, ethical values, and professionalism.
Generally, the teachers of this institution are in favor of the oral exams as they
allow to improve the student’s evaluation through direct and personal contact. On
the other hand, teachers are also against disclosing the names of students who have
committed fraud. As a way of inhibiting fraud, the teachers of this institution have
made efforts to get closer to the students through the practice of tutorial classes.
However, oral tests will have little effect on the behaviors acquired over the years.
Some professors may have little incentive to reduce cheating in their classes below a
point that would otherwise be obvious to outside observers, as they are rated by how
many research papers they publish and research grants they win for the college, and
not by how well they teach.
This study was very important for us, as teachers, because it allowed us to develop
some strategies that can be used in the classroom to motivate students.
First, we must promote a mindset of learning and ethical responsibility that
develops respectful relationships with students; second, make a constant effort to
integrate everyone’s diversity and create a real community in your classroom; third
establish trust relationships, and finally assess the merit in accordance with the clearly
established objectives. It can never be stressed enough that it is essential for a teacher
to be an excellent motivator and communicator.
This study allowed us to know the different types of fraud committed, the degree
of severity that the student attributes to the various types of fraud, as well as the
importance of inhibitors of academic fraud.
This study deals only with the student’s opinion, through an anonymous question-
naire, which could be improved in the future, comparing the results with the teacher’s
opinion on this subject.
Henceforth, better disclosure of internal standards and the code of ethics, greater
involvement of students with teachers, more training in this area, and greater rigor
and demanding compliance will be necessary.
Although this study focuses on the students of the Guarda Polytechnic, the lessons
learned from it are useful for other institutions, both national and international.
References
Bretag, T., et al. (2011). Core elements of exemplary academic integrity policy in Australian higher
education. International Journal for Educational Integrity, 7(2), 3–12.
Crittenden, V. L., Hanna, R. C., & Peterson, R. A. (2009). The cheating culture: A global societal
phenomenon. Business Horizons, 52(4), 337–346.
Donald, L. M. et al. (1999). Academic integrity in honor code and non-honor code environments:
A qualitative investigation. The Journal of Higher Education, 70(2), 213.
Gama, P., et al. (2013). A Ética dos alunos de Administração e de Economia no Ensino Superior.
Revista RAC, Rio de Janeiro, 17(5), 620–641.
Hilbert, G. (1987). Academic fraud: Prevalence, practices, and reasons. 3, 39–45. Elsevier.
Malgwi, C. A., & Rakovski, C. C. (2009). Combating academic fraud: Are students reticent about
uncovering the covert? Journal of Academic Ethics, 7(3), 207–221.
McCabe, D. (1999). Academic dishonesty among high school students. Adolescence, 139(34),
681–687.
McCabe, D. L., Trevino, L. K., & Buterfield, K. D. (2001). Cheating in academia institutions: A
decade of research. Ethics & Behaviour, II, 3, 219–232.
Sivirikaya, A. (2019). The relationship between academic motivation and academic achieve-
ment of the students. https://www.researchgate.net/publication/335763276_The_Relationship_
between_Academic_Motivation_and_Academic_Achievement_of_the_Students.
Teixeira, A. C., & Rocha, M. F. (2010). Cheating by economics and business undergraduate students:
An exploratory international assessment. High Education, 59(6), 663–701.
Witherpoon, M., Maldonado, N., & Lacey, C. (2012). Undergraduates and academic dishonesty.
Internacional Journal of Business and Social Science, 3(19), 77–86.
Chapter 12
Social Responsibility at the Polytechnic
Institute of Portalegre: From
the Experience Gained to the New
Challenges
Joaquim Mourato, João Alves, Francisco Morais, Isabel Mourato,

and Maria Maridalho
Abstract In carrying out its mission, the Polytechnic Institute of Portalegre (IPP),
addresses social concerns and ethical and transparent behavior, based on a system of
social responsibility management certified since 2011. The aim of this study is to eval-
uate the system and to understand what the new social concerns are, contributing to
the eventual redefinition of social responsibility programs and actions that support the
institution’s strategic objectives. The methodology followed was based on an online
questionnaire survey, aimed at stakeholders, namely teaching staff, nonteaching staff,
and students. As main results, it is highlighted that the stakeholders confirmed the
importance of the institution to have an SRMS, mainly for the attention it provides
to social inclusion, to the support in crisis situations resulting from social emergen-
cies and to the teaching of quality and excellence. Hence, stakeholders positively
evaluate the overall system as a whole, although 17% have considered whether it
can be revised. Among the proposed changes is the need for greater involvement
of stakeholders in the programs, renewal of some programs, and greater articula-
tion among them, as well as broadening the team under the system, and strengthen
the communication of programs and results. The main limitation of the study is the
difficulty of getting a response from a larger number of students and other external
partners. The interest that the results of this study may have in the strategy of other
higher education institutions is highlighted, given the development of the case study
and its originality.
Keywords Social responsibility · Quality · Higher education · Certification
J. Mourato (B) · J. Alves · F. Morais · I. Mourato · M. Maridalho

Instituto Politécnico de Portalegre, Centro de Investigação para Valorização dos Recursos
Endógenos (VALORIZA-IPP), Portalegre, Portugal
e-mail: amourato@ipportalegre.pt
https://doi.org/10.1007/978-981-15-6366-9_12
198 J. Mourato et al.
12.1 Introduction
Social responsibility in higher education institutions has been gaining centrality,

positioning itself as a strategic dimension. In Portugal, this theme gained expression
with the green paper on social responsibility and institutions of higher education and
with the creation of an observatory (Social Responsibility Observatory of the Higher
Education Institutions-ORSIES 2018). Scientific production in this field has grown
throughout the world, giving high responsibility to higher education institutions,
both in adopting it for its own management and in influencing the present and future
generations.
The Polytechnic Institute of Portalegre, for its mission and context, developed a
Social Responsibility Management System and was certified by NP-4469-1: 2008
to 2011, being the only public higher education institution to get such commitment
and distinction. The NP 4469-1:2008 is the Portuguese Standardization in Ethics
and Social Responsibility. This certification was the culmination of a process of
implementation of the Polytechnic of Portalegre strategy, which has always aimed
at integrating with the community and interacting with stakeholders, based on the
practice of social responsibility programs and actions.
Over the years, before and after certification, these practices are mainly based
on student integration and support; applied research and geared to the needs of the
region; in the promotion, with the interested parties, of several joint initiatives, of
scientific, cultural, and social scope.
In this context, because the system already has a decade of existence, bene-
fiting from countless experiences, feeling the need to redefine social responsibility
programs and actions that continue to support the institution’s strategic objectives,
we intend to develop a consultation and reflection work with the stakeholders about
their knowledge, involvement, and evaluation.
With this work we intend to identify new social concerns and also new forms of
response of the Social Responsibility Management System, assuring the increasing
involvement of the stakeholders and their appropriation of the methodologies,
organization, and objectives found.
12.2 Literature Review
It is important to clarify what is and how social responsibility in higher education

institutions is being considered and worked out. According to Chiavenato and Aaron
(2004, p. 332), “social responsibility means the degree of obligations that an organi-
zation assumes through actions that protect and improve the well-being of society as
it seeks to achieve its own interests”. Otherwise, we can say that organizations must
be accountable for the impacts that arise from their existence, trying to maximize
positives and minimize negatives. Thus, social responsibility is a complex issue,
12 Social Responsibility at the Polytechnic Institute … 199
combining several variables that must be considered (Zenisek 1979), being inter-
linked with the ethical principles adopted by organizations in their relationship with
employees, society, and other entities, as an instrument capable of improving quality
of life (Eells and Walton 1974). It is demonstrated that socially responsible prac-
tices stimulate employees at work, increasing motivation and productivity, confer-
ring organizational identity, and good external reputation (Dutton et al. 1994, cited
by Leal et al. 2007).
The European Union, together with the Green Paper (European Commis-
sion 2001), sought to broaden the debate on the promotion of corporate social
responsibility and to encourage the development of innovative practices.
In the scope of university social responsibility, Vallaeys et al. (2009), with a
reference work on this subject, emphasizes the fact that it is not accepted that there
are responsible actions in one area and not in others, and social responsibility must
cover all university processes. Institutional coherence must be ensured, which means
correspondence between action and institutional discourse and consistency between
all areas of the university. The same authors trace the process of social responsibility
in the university in four spheres: organizational, educational, knowledge, and social.
They also define a methodology based on four steps: commitment, self-diagnosis,
execution, and accountability.
With regard to the polytechnic higher education network, the impacts they produce
in regions and in society as a whole are evident. A study carried out by the Coordi-
nating Council of Portuguese Polytechnic Institutes concluded that the direct impact
of these institutions in their respective regions varies between 27 and 171 million
euros, and their average weight in GDP varies between 5 and 11% of the region
where they are inserted and are responsible for the employment of more than 12% of
the active population of the municipalities (Alves et al. 2014). Given these evidence,
social responsibility in the management of polytechnic institutions gains strength
and centrality.
Regarding Polytechnic of Portalegre, the study by Jorge et al. (2011), came to
highlight the Polytechnic of Portalegre for being the one where greater perceptions
of authentic climate, greater job satisfaction, and more social responsibility prac-
tices are observed. Mourato (2013), also demonstrated the evolution and continuous
improvement of the Social Responsibility Management System and its contribution
to the sustainability, reputation, and results of the Polytechnic of Portalegre.
In the case of an evolutionary process and continuous improvement, it is important
to apply the Plan-Do-Check-Act method, so that the dynamics and adaptation to new
realities happen naturally, guaranteeing the effectiveness of the systems (IPP 2018).
The Institute has a Code of Ethics (IPP 2017), inspired by the principles referred to
in NP 4460/1-2007 (IPP 2007), adopted as a code of honor, which seeks to go further
in the commitment to adopt very demanding ethical behavior.
12.3 The Social Responsibility Management System

at Polytechnic of Portalegre
In its development strategy, the Polytechnic of Portalegre integrates social and envi-
ronmental concerns, assuming ethical and transparent behavior and a strong rela-
tionship with the environment and the surrounding community, taking into account
the needs and expectations of its stakeholders.
As a natural consequence of this strategy, the opportunity arises for the implemen-
tation of a Social Responsibility Management System, which began in 2009, with a
very comprehensive and extended training for Polytechnic of Portalegre staff.
After identification of Interested Parties, both internal and external, which affect
and/or are affected by the performance of the Polytechnic of Portalegre, the respective
significance was assessed and the aspects of social responsibility that the Polytechnic
of Portalegre controls and/or influences related to the various activities, as well as
the most significant ones identified. The main stakeholders of the Polytechnic are
academic partners, students, teachers, government, companies, unions, and student
associations. Based on this evaluation, and based on the social responsibility princi-
ples defined in the norm NP 4469-1: 2008, the Institution promoted the development
of programs that can respond to the defined social responsibility objectives, supported
by the social concerns and values adopted by the Polytechnic of Portalegre.
For each program, a responsible person was identified whose mission was to
coordinate, develop, and monitor the actions defined.
In an initial phase, for the implementation of the system and operationalization
of the social responsibility policy, a continuous improvement group was created,
involving human resources of all the organic units of the Polytechnic of Portalegre.
The objective of this group was to promote, in the organic unit that represented,
practices of social responsibility that later became to constitute as programs, in
response to the objectives identified by the Presidency, for the whole Institution.
In the second phase, the evolution of the Social Responsibility Management
System led to the identification of specific areas of work, which corresponded to
the different aspects of the social responsibility approach in the institution. Thus,
the areas of “Hygiene, Safety, and Risk Prevention”, “Health Promotion”, “Envi-
ronmental Concerns”, “Social Concerns and Emergencies”, “Programs”, “Legal
Compliance”, and “System Maintenance” were created.
These areas were composed of elements from several organic units, teaching staff,
and nonteaching staff according to their training and proximity to the topics to be
addressed by each group. Over the years, some of the areas have been revised in terms
of organization and objectives, aggregating issues that were directly related, such as
“Hygiene, Safety, and Risk Prevention”, “Environmental Concerns” and “Health
Promotion”. In this case, in particular, the synergies created by those responsible for
each of the areas made it possible to include the objectives and activity in a single
group that became “Safety, health, environment and risk prevention.”
Throughout the years of Social Responsibility Management System implemen-
tation and development, the gains and results achieved in terms of safety and risk
prevention, health promotion, environmental concerns, social support for students,

and community involvement have been well-known. These results emerged from the
implementation of several social responsibility programs that aimed to:
– Knowledge and preparation of employees, and levels of safety, through training,
drills, adequacy of plans and emergency plans, and reinforcement of human and
material resources;
– The promotion of the improvement in the eating habits of the students of the
Polytechnic of Portalegre and of the Schools of the county of Portalegre;
– Prevention of oral health of the internal and external community of the Polytechnic
of Portalegre;
– The development of sensitization sessions, the provision of human spaces
and resources, recreational and cultural activities, and partnerships with other
institutions to promote healthy lifestyles;
– Solidary management of the Polytechnic of Portalegre olive grove;
– The organization of campaigns to promote paper collection for solidarity purposes
and social support to institutions;
– Substantial improvement of the reception/integration conditions, with the support
of older students, as well as improvements in accommodation, food, and economic
and social responsiveness to students, even in situations of crisis and emergency
and special needs, through the provision of meal vouchers and food basket,
reduction/exemption of housing payment;
– Support and benefits for other institutions, such as volunteer and student collab-
oration, short and medium-term training, support for the elderly, children, and
other target groups with economic, psychological, and social initiatives.
At the internal level, there was a reinforcement of skills and qualification
of employees, which resulted in a positive impact on the performance of tasks,
operational efficiency, and quality of teaching.
Recently, in 2019, the Integrated Management System was reorganized and an
attempt was made to approximate the strategic plan for the development of the
benchmarks of the Agency for Assessment and Accreditation of Higher Education.
Because the Polytechnic of Portalegre soon realized that the success of the Social
Responsibility Management System would be transversal, the organization saw in
this regard an opportunity to re-stimulate the collective contribution and invited
all the continuous improvement groups, which cover the functional areas of the
institution, to implement new social responsibility practices. Thus, the responsibility
for the implementation of Social Responsibility Programs, based on the objectives
defined by the Presidency, is of the Continuous Improvement Groups that support
the Quality Management System, thus guaranteeing the transversality of the Social
Responsibility Management System. The maintenance of the system, in formal terms,
and in response to the standard that certifies it, is under the responsibility of the Office
of Evaluation and Quality.
This Office also ensures regular oversight of the system by analyzing the achieve-
ment of objectives, monitoring of indicators, program evaluation, Interested Parties
satisfaction assessment, internal and external audits, control of action plans, and an
annual (critical review) review of the system.
12.4 Methodology
The methodological strategy implemented was quantitative, based on the imple-

mentation of an online questionnaire survey for teaching staff, nonteaching staff,
and students, conducted during December 2018. The number of validated question-
naires was 98, constituting a sample consisting of 35 professors, across the four
organizational units that make up the Polytechnic of Portalegre1 ; 39 nonteaching
staff, mainly to perform functions in the Central Services of the institution2 ; and 24
students, overwhelmingly attending first study/undergraduate courses.3 The struc-
ture of the questionnaire incorporated three dimensions of analysis: (i) Importance
of Social Responsibility; (ii) Evaluation of the current Social Responsibility Manage-
ment System; (iii) Proposals for amendments. The data were analyzed, in a first phase,
from the outputs generated directly by the online platform that supported the survey;
and in a second phase, using SPSS software for more specific analysis, namely some
crossings of variables. In addition, using a content analysis, a set of answers to open
questions included in the same questionnaire survey was systematized.
12.5 Analysis and Discussion of Results
1. Importance of Social Responsibility in the Polytechnic of Portalegre framework:

some indicators
In the first analytical dimension of the study, it was tried to measure a set of indicators
alluding to the importance of Social Responsibility within the institution. A first
data gains relevance: 83% of the respondents stated that they had knowledge of the
existence of a Social Responsibility Management System, against only 17% of the
respondents who manifest ignorance. In a more specific perspective, and taking into
1 Superior School of Education and Social Sciences, Superior School of Management and
Technology, Superior School of Health and Superior Agrarian School of Elvas.
2 The remaining nonteaching staff who answered the questionnaire were distributed very closely by
the four organizational units and other services transverse to the institute, although with a higher
response rate in one of the schools in particular, in this case Superior School of Education and
Social Sciences.
3 In the case of the students, the small number of answers obtained is understood, in the context
of this study, only as indications and not as representative value of the universe of students of the
Polytechnic of Portalegre. Besides the students, the number of teachers and nonteaching staff who
answered the questionnaire is also insufficient to be representative of the institution’s universe.
However, the responses obtained provide analysis lanes of interest in this research.
account those who say that they do not know the Social Responsibility Management
System, they are mainly the students and a residual number of nonteaching staff
who assume this. In relation to teachers, all reveal to know the Social Responsibility
Management System.
Regarding the degree of knowledge that the same respondents demonstrate about
the fact that Polytechnic of Portalegre is the only public higher education institution
in Portugal, with a certified Social Responsibility Management System, the tendency
of answers obtained generally reproduces the advanced interpretation regarding the
previous indicator. That is, a considerable number of respondents still claim to know
the certification obtained by the institution (67%), although the number of those who
say they do not know this particularity has increased (33%). Of the latter, students
continue to be the ones who demonstrate the greatest lack of this knowledge, although
also among teaching staff and nonteaching staff, there are some cases that assume
that they do not know the same certification.
Another indicator established evidence the positioning of the respondents on the
importance of the institution to have an implemented Social Responsibility Manage-
ment System. The answers obtained are 95%. Only 5% assume a contrary opinion,
being that, of this residual value, the majority falls to the group of nonteaching staff.
In complementary to the data derived from this last indicator, are the reasons
pointed out by the respondents. Figure 12.1 shows the reasons given for this, two
reasons given the greater number of responses: “increased satisfaction, involvement,
and support to internal and external stakeholders” with 62.4% of responses and
“continuous improvement” with 57% of responses. The remaining justifications also
deserved equal weight percentages, ranging from 40 to 44%.
Greater integraƟon and implementaƟon in the

40.9%
region
Increased economic, social and environmental

39.8%
sustainability
Improvement of the insƟtuƟonal image 44.1%
Strengthening the capacity of responsiveness,

40.9%
flexibility and adaptaƟon
ConƟnuous improvement 57.0%
Increased saƟsfacƟon, involvement and support

62.4%
to internal and external stakeholders
0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0%
Fig. 12.1 Reasons for the existence of a Social Responsibility Management System
The reasons given for the existence of an implemented Social Responsibility

Management System cover a set of ideas around both the role that the Polytechnic
of Portalegre has assumed in the scope of its intervention as a Higher Education
Institution and taking into account a set of capital gains with reflex in the continuous
improvement of its activities, both internal and external.
2. Evaluation of the current Social Responsibility Management System in the
perspective of some internal stakeholders
In a second analytical dimension, it was intended to establish a set of indicators

capable of providing an evaluative perspective on the Social Responsibility Manage-
ment System, namely around some aspects: (i) the degree of identification with
the concerns that currently shape the system of social responsibility ongoing in
the institution; (ii) the degree of agreement with the values inherent to the Social
Responsibility Management System; (iii) the level of knowledge, participation, and
benefit revealed/obtained by the respondents about the social responsibility programs
currently in force.
Regarding the concerns inherent to the Social Responsibility Management
System, Fig. 12.2 shows the whole of the latter in relation to the different degrees of
identification demonstrated by the respondents.
From the reading of the previous table, it is noticeable that the generality of
the concerns listed has a high or very high degree of identification by the universe
of respondents, since the values obtained correspond to the highest values of the
Teaching of quality and excellence 6, 7, 8
The support to the graduates in the insertion in the active life 6, 7
Social inclusion 5, 6, 7, 8
Health 5, 6, 7, 8
Support to the school community 6, 7, 8
Safety 5, 6, 7, 8
Volunteering 6, 7
The sustainability of the staff job 6, 7, 8

Support in crisis situations resulting from social emergencies 6, 7, 8
Recognition of merit 6, 7, 8
The practice of sports 4, 5, 6

The impact on the environment 5, 6, 7
The interaction with the surrounding environment 6, 7
Legend: 1 = low degree of identification; 8 = high degree of identification.
Bold numbering represents the highest scale values in each item
Fig. 12.2 Degree of identification in relation to each interested stakeholders

100.0% 90.8% 93.9%

87.8% 87.7% 89.8%
90.0%
80.0%
70.0%
60.0%
50.0%
40.0%
30.0%
17.3%
20.0% 12.2% 10.2%
9.2% 6.1%
10.0%
0.0%
OrganizaƟonal Ethics and Subsidiarity Involvement Sustainable
excellence transparency and guidance to development
stakeholders
agree disagree
Fig. 12.3 Agreement or disagreement with the values inherent to the Polytechnic of Portalegre
response scale (levels 6, 7, and 8). This means that, for the internal audited stake-
holders, with the exception of two or three concerns, the vast majority of them deserve
a very positive assessment in the context of the concerns that the Polytechnic of
Portalegre currently holds within its social responsibility system, for their diversity,
both in terms of scope of action and in terms of potential beneficiaries inherent to
the same concerns.
Regarding the degree of agreement or disagreement with the intrinsic values of the
Social Responsibility Management System, the verified data reveal an overwhelming
majority of answers in terms that agree with all the values in force, being residual,
in the sample as a whole, the number of those who express a contrary opinion.
Figure 12.3 gathers this information and confirms the reading regarding this indicator.
The questionnaire survey also included a set of questions relating to the Social
Responsibility Management System activities and programs in place at the Poly-
technic of Portalegre. Respondents were asked about their level of knowledge on the
one hand and the level of participation and benefit obtained, arising from the same
activities and programs, on the other hand.4
4 The activities and programs mentioned here, in a total of 23, are: “Support for the inclusion
of students with special needs”, “Volunteer Scholarship”, “Student Friendly Cities”, “Short-term
Training (nonteaching staff)”, “Flexible Scheduling Management (teaching staff)”, “IPP Friend”,
“IPP Leisure”, “IPP Health”, “IPP Mentoring”, “We are an interested party”, “Social IPP—Healthy
Food Project in the Schools of the Municipality of Portalegre”, “Social IPP—Social IPP—Food
Reuse”, “Social IPP—Exhibition space in December”, “Social IPP—Yellow Ribbon Project”,
“Social IPP—Health promotion and hygiene care oral”, “Social IPP—Paper for the Food Bank”,
“Social IPP—Collection of food and goods for donation to animal protection associations of the
region”, “Social IPP—Solidary and Ecological Olive grove”, “Social IPP—8i 8 h Overtime for a
The results found for this indicator show that, in the overwhelming majority of
activities and programs in progress, the level of knowledge revealed by internal
stakeholders exceeds the level of participation and benefits obtained in relation to
the same activities and programs. This result reveals a mismatch between a more
consensual stance, supported by the knowledge of the existence of this set of activi-
ties and programs inscribed in the institution’s social responsibility and, in another
perspective, more distant regarding the involvement, with a greater or lesser degree of
implication by the respondents themselves regarding their availability and commit-
ment to the execution of the same activities and programs. In other words, we are
dealing with a community which, while generally aware of the substance that char-
acterizes Polytechnic of Portalegre’s social responsibility system, reveals, in a more
timid way, a less committed attitude, through its own involvement in promoting the
same activities and programs.
The exception goes to a small set of situations, in which the participation/benefit
level reaches, nonetheless, non-negligible values, corresponding to actions that have
deserved greater adherence on the part of the respondents. This is the case of the
activities: “Short-term training (nonteaching staff)”, “IPP Social-We all have love
to give”, “Training/awareness actions in the area of Security and Risk Prevention”
and “Training “I explain”. All other activities/programs do not present a level and
significant participation/benefit, although all of them are the subject of an expressive
knowledge on the part of the respondents, as shown.
In the evaluation directed specifically to each of the social responsibility activi-
ties/programs, Fig. 12.4 gathers the assessments made by the respondents. As seen,
across the table, all activities/programs deserve a very positive evaluation, assuming
values, on average, at levels 7 and 8.
However, the significant number of cases in which the answer option “does not
know, does not respond” has also been somewhat preponderant, evidencing a relative
difficulty of evaluation by the universe of respondents in relation to some specific
situations.
In order to extend the evaluative perspective, compared with the need to evaluate
the Social Responsibility Management System in its entirety, 76% of the respondents
place their evaluation in the highest values of the scale, between levels 6 and 8,
consubstantiating a very positive evaluation, evidencing a visible convergence with
the evaluation previously directed to each particular activity/program (Fig. 12.5).
3. Proposals to change the future of Social Responsibility in the Polytechnic of
Portalegre
The final analysis dimension of the study was aimed at obtaining the perspective
of internal stakeholders regarding the future of Polytechnic of Portalegre’s Social
Responsibility Management System and was invited to comment on the strengths
Good Cause/8 h for a Good Cause”, “Training/Awareness-raising Actions in the Health Promo-
tion Area”, “Training/Awareness-raising actions in the area of Safety and Risk Prevention of first
intervention in fire and/or rescue techniques)”, “Training/Awareness actions “I explain””.
Support for the inclusion of students with special needs 6, 7, 8
Volunteer Scholarship 6, 7
Student friendly cities 5, 6, 7 + (N/S)
Short-term training (non teaching staff) 5, 6, 7, 8 +(N/S)
Flexible scheduling management (teaching staff) 6, 7, 8 +(N/S)
IPP Friend 5, 6, 7, 8
IPP Leisure 5, 6, 7, 8 +(N/S)
IPP Health 6, 7, 8
Mentoring 5, 6, 7, 8
We are interested part 5, 6, 7, 8 +(N/S)
Social IPP – Healthy Food Project in the Schools of the Municipality of

6, 7, 8 +(N/S)
Portalegre
Social IPP – We all have love to give 7, 8
Social IPP – Food reuse 6, 7, 8 +(N/S)
Social IPP – Exhibition lounge (in december) 5, 6, 7, 8 +(N/S)
Social IPP – Yellow Ribbon Project 6, 7, 8 +(N/S)
Social IPP - Health promotion and oral hygiene care 6, 7, 8 +(N/S)
Social IPP – Paper for the Food Bank 6, 7, 8 +(N/S)

Social IPP - Collection of food and goods for donation to animal protection
6, 7, 8 +(N/S)
associations of the region
Social IPP – Solidary and ecological olive grove 6, 7 +(N/S)
Social IPP - 8i (8 Hours Overtime for a Good Cause/8 Hours for a Good Cause) 6, 7, 8 +(N/S)
Training/Awareness-raising Actions in the Health Promotion Area 6, 7, 8

Training/Awareness-raising actions in the area of Safety and Risk Prevention of
6, 7, 8
first intervention in fire and / or rescue techniques)
Training/Awareness actions "I explain” 6, 7, 8
Legend: 1 = less important; 8 = most important; N / S = do not know.
Bold numbering represents the highest scale values in each item
Fig. 12.4 Evaluation of activities/specifically programs
and weaknesses of the social responsibility system implemented, as well as possible

implementation proposals, in a prospect of continuous improvement.
In this chapter, the first accurate indicator shows that for most respondents (80%),
the Social Responsibility Management System should be maintained against 17%
who understand the need for it to be reviewed. Only 3% consider the cancelation
hypothesis.
40.0%
35.0% 33.7%
30.0%
24.5%
25.0%
20.0% 17.3%
15.0%
11.2%
10.0%
6.1%
5.0% 3.1% 3.1%
1.0%
0.0%
1 2 3 4 5 6 7 8
Legend: 1 = less important; 8 = most important.
Fig. 12.5 Social Responsibility Management System assessment of Polytechnic of Portalegre as

a whole
Figure 12.6, which crosses the future situation of the Social Responsibility
Management System by type of internal stakeholders, reveals that, although respon-
dents are mostly in favor of maintaining the Social Responsibility Management
System, it should be pointed out that from those who understand it should be
reviewed, are the nonteaching staff and teaching staff, those who express in greater
numbers this scenario, as seen in Fig. 12.6.
In addition to the previous analysis, the trend towards a more expressive response
coinciding with the maintenance solution of the Social Responsibility Management
System is not, however, exempt from some less valuative positions. In addition, most
of the weaknesses identified call for an overhaul of the internal and external stake-
holder engagement strategy (identified by the respondents as “interested parties”) on
the one hand, as well as a review of some social responsibility programs, along with
a greater articulation between those who are currently underway, on the other hand.
The current SRMS of the IPP should be

Maintained Canceled Reviewed Total
internal stakeholders Teaching staff 29 0 6 35
Non teaching staff 29 2 8 39
Student 20 1 3 24
Total 78 3 17 98
Fig. 12.6 Future situation of the Social Responsibility Management System by internal stake-
holders (values in N)
On the internal stakeholders

Difficulties in involving internal stakeholders in participation, as responsible for activities, in the
various programs
Break in the dynamism of the system and in the recognition of the participants
Reduced active participation by the majority of its staff, a situation that requires an additional effort of
awareness and implication
Some misunderstanding by the stakeholders, reflecting in less involvement
On the programs in action

Programs without activity or results, lack of integration of social responsibility in some areas, little
dynamics in the specific development of the Social Responsibility Management System and associated
practices
Difficulty of implementing some programs
Social Responsibility Management System programs not widely publicized within the academic
community
The inclusion of international students should be further supported
Missing project renewal
Fig. 12.7 Weaknesses identified in the Polytechnic of Portalegre’s Social Responsibility Manage-
ment System
These perceptions, assumed by the respondents, are summarized in Fig. 12.7, as a

result of the content analysis performed on the answers obtained.
On the other hand, the most positive aspects of the Social Responsibility Manage-
ment System identified by teaching staff, nonteaching staff, and students also deserve
some attention. Figure 12.8, shows the various responses obtained, aggregated
according to their similarity, and it is possible to find positive opinions, especially
regarding the commitment that the Polytechnic of Portalegre has been taking with the
surrounding community, including also the recognition of added value in the Social
About the Polytechnic of Portalegre involvement with the community

Greater accountability of participants and awareness of active citizenship
Strong interaction with the surrounding environment / Privileged connection with external stakeholders
/ Global commitment and assumed with the surrounding community and territory / Approximates the
Polytechnic of Portalegre to the entire community in which it is involved, transferring its values to
society
Sustainable development from the economic, environmental and social perspective
About IPP's commitment to the internal academic community

Recognition, assertive activities, involvement of different actors in the academic community, including
students / Motivation for the intensification of relations between staff – teaching staff and non-teaching
staff of the different organic units
Programs to support students / Works in critical areas such as the daily needs of students with social
needs / Ability to respond to social or other emergencies / Mainly, programs aimed at student support
Training Opportunity
Improves organizational climate
Voluntariness and capacity of staff
Concern about achieving standards of excellence in the academic community
Strong structure, commitment, productivity
Fig. 12.8 Strengths identified in the Polytechnic of Portalegre’s Social Responsibility Management
System
With an internal focus on the institution

Focus on the "student" and all their needs
Implementation / revision of programs involving/benefiting teaching staff and non-teaching staff
Greater dissemination (internal and external) of all programs and actions
Should have a greater and exclusively dedicated and team / Rationalization of human resources
Articulate the different programs
Greater commitment to the search for greater employability for its graduates
Better organization and functioning, social responsibility programs and actions with more concrete
results for Polytechnics, greater participation of teaching and non-teaching staff
With an external focus on the institution

More partnerships
Actions that can internalize the spirit of unity - WE ARE ALL IPP - for the involvement of all
Organize an annual seminar open to other institutions to learn and improve the system
Greater involvement of the academic community
Fig. 12.9 Proposed improvements for the future
Responsibility Management System with internal repercussions, in particular, with

its collaborators.
Nevertheless, in general terms, the need for a redefinition of the future action
strategy more directed to the outside, emphasizing, in a more regular and active way,
the external stakeholders, within the framework of the institutional relations of the
Polytechnic of Portalegre with the community and with the region.
To conclude this analysis, a set of concrete proposals is advanced, across the three
groups of respondents. Figure 12.9, summarizes these proposals, arranged according
to the internal and external focus of the institution.
From an internal perspective, the suggestions directed towards a greater focus on
the student and their needs; a review of programs that directly involve Polytechnic of
Portalegre employees, the allocation of human resources exclusively, and in greater
numbers to the Social Responsibility Management System, are among the proposals
listed.
From an external perspective to the institution, an increase in partnerships and
broad discussion, open to other institutions, for sharing and collective learning on
other processes of improvement of the Social Responsibility Management System,
through a seminar organized for that purpose.
12.6 Final Considerations
The overall results of this study, centered in the case of a Higher Education Institution
with recognized experience in the field of social responsibility in the universe of
national Higher Education Institutions allows to obtain a framework characterizing
the relevance that can take the auscultation of its internal stakeholders regarding the
social responsibility management systems.
In addition to providing clues for reflection, strategically relevant to inform a
possible process of redefinition of priorities, programs and actions to be developed
within the scope of Polytechnic of Portalegre’s Social Responsibility policy; the

results achieved through this case study, based on the experience gained and the
pioneering experience of this institution in the social responsibility domain, may
similarly suggest possible implementation strategies and/or redefinition of social
responsibility management systems by other higher education institutions, towards
new challenges that local communities, in particular, and society, in general, are
imposing on the universe of higher education institutions.
Acknowledgements The authors thank the Presidency of the Portalegre Polytechnic Institute for
the collaboration provided throughout the fieldwork, as well as the interviewees at the Polytechnic.
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Chapter 13
Social Responsibility: Proposal of Social
Re-inclusion of Inmates of the Brazilian
Prison System Through Higher
Education
Ana Lúcia Fontes de Souza Vasconcelos, Patrícia Tuma Martins Bertolin,

Bruna Angotti, and Rute Abreu
Abstract The present proposal presents a pilot action research in progress at the
Universidade Presbiteriana Mackenzie (UPM), in São Paulo, Brazil, in partnership
with the Department of Penitentiary Administration of the State Government of São
Paulo aimed at the recovery and social inclusion of prison inmates, through the
offer of vacancies in undergraduate courses at the University, as well as of addi-
tional citizen qualification. The courses are Advanced Technology in Marketing,
Commercial Management, and Human Resource Management. Social responsibility
in educating for the full exercise of citizenship is part of the University’s Institutional
Development Plan and this project is in line with UPM’s mission. Since the beginning
of 2019, fifteen students from the Butanta Women’s Penitentiary, the only semi-open
female unit in the city of São Paulo, participate in the project in a semi-presential
manner, performing activities in prison and attending university for weekly training.
The aim of the project is to help the semi-open regime to actually fulfill its role by
ensuring effective qualification and increasing the employability potential of the pris-
oners participating in it, not only during the execution of the sentence, but also after
inclusion in the labor market. The authors present the partial results of this initiative,
taking stock of the first six months of the project, as well as presenting the challenges
of the coming semesters. This project was inspired by social responsibility projects
carried out with detainees at the Instituto Politécnico da Guarda, Portugal, for that
reason the interinstitutional partnership.
Keywords Social responsibility · Higher education · Prison · Social inclusion ·

Brazil
A. L. F. de Souza Vasconcelos (B) · P. T. M. Bertolin · B. Angotti

Universidade Presbiteriana Mackenzie, São Paulo, Brazil
e-mail: ana.vasconcelos@mackenzie.br
R. Abreu
Instituto Politécnico Da Guarda, Guarda, Portugal
https://doi.org/10.1007/978-981-15-6366-9_13
214 A. L. F. de Souza Vasconcelos et al.
13.1 Introduction
This chapter hereby briefly presents the research pilot project named ‘Social Respon-
sibility: A proposal for social re-inclusion for Brazilian incarcerated people by means
of the higher education, which came into being the extension project accomplished
by the Universidade Presbiteriana Mackenzie, in partnership with the Secretary of
Penitentiary Administration of the State of São Paulo, Brazil. Thus, it relates to the
first semester of accomplishment of the project, making a brief statement through
the period. Therefore, the possibility of social inclusion, in an academic space, of
learners of the prison system, allowing them, quicker and effectively, they reintegrate
to the social life, is welcome in a university featured ever since its foundation by this
vocation of inclusion. The subject of the citizenship according to Smanio (2009, 1):
requires a dimension of social inclusion.
According to the Brazilian Law, women who have had children in prison would
have the right to keep them together until their six-month age, then to be separated
eventually. The group for human rights advocacy called “Coletivo de Advocacia em
Direitos Humanos” (CADHu) was responsible for the presentation in 2017, of the
first collective habeas corpus (HC 143.641) recognized by the Supremo Tribunal
Federal (STF), the Brazilian Federal Supreme Court. In favor of all incarcerated
women, without definitive sentence, pregnant or mother of children up to 12 years,
the order was granted on the 20th of February, 2018. Such Habeas Corpus aims for
assuring, which those women, when provisional convicts do not remain in incarcer-
ation, fulfilling provisional remedies diverse to prison. Thousands of women and
babies have the left prison for the reason of this Action, which was granted with
the recognition of the Inter American Commission on Human Rights and of the UN
Women. This collective habeas corpus has defended the rights of babies and chil-
dren to live in freedom under the care of their mothers, and so far, over five thousand
women and their babies have left the prison. After a year of the decision, there are
still hindrances to the execution of this collective habeas corpus. In a survey done by
the CADHu, it has been verified that pregnant women and their children that could
be beneficiaries of this Habeas Corpus are still incarcerated.
The pilot project concerns social responsibility, entailing the academia and the
public power. Aimed at the inmates of the Dra. Marina Marigo Cardoso de Oliveira
Penitentiary, best known as Butantã Female Penitentiary, the project consists of the
offer of 15 spaces in academic courses for incarcerated women. The courses are
Technological Course in Marketing, Business Management, and Human Resource
Management. To comply with the objectives of this paper, firstly we present the
project, in particular, its goals and method of operation, reflecting on its transfor-
mational social role. Hereupon, we have attended to the first semester of its accom-
plishment, highlighting the main occurrences and investments made. Eventually, it
has been introduced a brief summary listing the challenges to cope.
13 Social Responsibility: Proposal of Social Re-inclusion … 215
13.2 The Project for Social Inclusion of Inmates

of the Prison System
The project aims to promote social responsibility, in general, and social inclusion for
the prison system inmates, in particular, on making feasible their academic degree at
the Universidade Presbiteriana Mackenzie (UPM), as well as their training course
for the job market and the exercise of citizenship. Its core goal is to train the audience
in order to contribute with the semi-open prison regime meets its requirements, by
assuring professional qualification and the raise of the employability potential of the
attendants.
The project offers to make the social inclusion for Brazilian prison system inmates
more opportune through higher education, with an ambiance of reformed Christian
faith, for the full exercise of citizenship. For reaching this purpose, we have driven
ourselves by the following specific objectives: (a) promote the access to the university
for people in situation of incarceration and ex-convicts of the prison system, assuring
higher education and encouraging the emancipation through the learning; (b) foster
to the prison system inmates the motivation for developing a profession; (c) qualify
the inmates from the prison system with skills for the insertion in the job market;
(d) offer the possibility of finding new purpose for the personal life of these inmates
from the prison system; (e) support the guidelines of the national policy for social
re-inclusion of the incarcerated population; (f) foster the formation of networkings
related to promoting the reintegration of incarcerated citizens and ex-cons of the
prison system, (g) foment opportunities of job training courses, for the increment
of the perspective of employment/work/income generation/entrance to the social
security system.
It relates to, therefore, an activity of social responsibility of the University, aimed
at a fully transformational education. Thereby, the action aims for collaborating with
the reduction of second offense recidivism rate and as a result, for crime prevention
in and out the prison, through the opportunities the learning and the work commonly
provide. The proposition for the action sits on the socio-educational outlook of
leaving from the prison system—or on the ones imprisoned under the semi-open
regime—as the possibility for this to regain their social life, by having the right
to education assured by the Federal Constitution of 1988, Article 205, providing
favorable conditions to their social integration and entrance to the job market.
This proposal of inclusive perspective is guided through affirmative actions, which
are deeds or measures for concrete situations that ensure equality of opportunity and
treatment, by way of policies or private, focal actions that allocate resources for
benefit of people who endure for coming under discriminated groups and victimized
by some sort of social exclusion. As stated by Bertolin and Benedito (2013, p. 372),
affirmative actions are “mechanisms considered by the Brazilian constitutional text
of 1988, and deployed to correct a material inequality, when the Universalist policies
have shown insufficient to being concretized”. In that respect, it is fair enough to
have a specific action, not only by the public power, but along its private partner
allies, having as a focus to benefit members of vulnerable groups.
The affirmative actions perhaps has on the education their most important scope
of action. In Brazil, there is the case of the quota for racial and ethnic minorities
in the higher education institutions, declared constitutional in April, 2012, by the
Federal Supreme Court, at the Claim of Breach of Fundamental Precept “Ação de
Descumprimento de Preceito Fundamental (ADPF) 186” ().
To a proper extent, these measures can—though not used to—have as focus people
in incarceration. According to Balibrea and Rojas (2012, 62), “the education in prison,
in a higher sense, has multiplied the socializing action”. Actions of educational
intervention into the prison environment are of use for “[…] organize the everyday
life of the prison population and of the prisons and occupy the time […]” (Balibrea and
Rojas, 2012, 63), after all, as much pervaded, “the idleness in the prison courtyard is
the worst thing that can happen in the prison system” (Balibrea and Rojas, 2012, 63).
In this very project, proposed as being beyond the walls of the prison, to be carried
out in the academia, the intervention must happen in respect to educate women, many
times young people, in formative and working age, with little or without any access
to education (especially, academic degree). Well, if the lack of an educational degree
is one of the great barriers that hamper the entrance and permanence of women in
the job market (Balibrea and Rojas, 2012, 70), the investment on this crowd can be
understood as a deed for recognition of the potentialities of these women, rescuing
them from the crime, in giving them real opportunities.
The choice for having women as target audience on the pilot project is due to quite
objective aspects, dealing with the profile of Brazilian Women´s prison population:
the formal education level of convict women is significantly higher than men; they
mostly have committed drug trafficking, in which have played a secondary role (their
partners, spouses or brothers tend towards to play a leading role); are in general minor
misdemeanors (mostly, first offenders); they are used to be left out by the family when
being incarcerated, not receiving visits; having children in general, whose custody
will need to be taken by another family member, and in which, in the absence of
someone, ending up being in foster cares (Ministério da Justiça do Brasil, 2016).
Besides, it lies historically with the women taking care of children, the elderly and
sick people of family, the reason why to guarantee the dignity of these women has
the potential to impact on many people, multiplying the benefits of the project.
Thereby, to invest in Education—especially on incarcerated women—is to invest in
overcoming on what it seems a “twist of fate”, (Balibrea and Rojas 2012, 75), where
the lack of access and opportunity is used to be the thrust.
As mentioned, it relates to a pilot project, which the University expects to be able
to continually offer, in partnership with the public power. It also comes to become
public the necessary procedures for its operation, somewhat delayed, in the face of
the innovative potential of the project. Thus, once overcome the starting hindrances,
another educational institution will be able to benefit from the procedures developed
and replicate the project, even in other Brazilian states and regions.
The Universidade Presbiteriana Mackenzie (UPM), has it as mission, to help
people not only in their personal life and career, but in the spiritual life, too: “As an
educational institution we understand the knowledge as something that enlightens
us and delivers from darkness and ignorance. This is our role: lighting up the way”.
Owing to respect and contribute with Christian ethic values and principles for the
construction of an ethic and sympathetic citizenship (UPM, 2019, 58), the social
responsibility in educating for the full exercise of citizenship is part of the action of
its institutional Development Plan.
Education encompasses the formative processes, which are developed in many
ways of the human coexistence, such as family life, labor relations, experiences
obtained along with learning and research institutions, together with social and
cultural movements of sectors of the civil society. This principle posits that the
activities with educational purposes are formulated and implemented in an articulate
and integrated way among all the instances that are learning source and of formative
processes.
In search of answers to the challenges of the integration of social and scientific
aspects in the university, the Extension Program, as one of the spaces for critical
reflection, a milieu that contributes for the oxygenation of thinking and action on the
search for excellence of learning in a meaningful and contextualized way. This inter-
ventionist project, which aims to help out the process of resocialization of reeducatees
from the prison system, has as the basis a pedagogical proposal for integral educa-
tion whose conception encompasses a script for an educational process that seeks
the development of educatees in a full dimension—intellectual, physical, emotional,
social, and cultural. The project tends to consist on a collective basis, shared in
a transdisciplinary way scientific content, but not excluding the observation of its
familiar, educational, and career pathways, conveying the history into everyday use.
The Education insured by the Penal Execution Act, in its Articles 10 e 11, tran-
scribed following, aims for the re-inclusion of the individual into the society and the
crime prevention, entailing six categories of assistance, which must be assured to the
individuals subject to freedom-depriving penalty:
Article 10. The assistance provided to the inmate is a duty of the State, aiming for crime
prevention and guidance for the return to the society coexistence.
Subparagraph. The assistance stretches out to the ex-con.
Art. 11. The assistance will be as of: I – Materials. II – Health. III – Legal. IV – Educational.
V – Social. VI –Religious.
The Brazilian Constitution of 1988, in the Article 205, also conveys the following
concern of the Brazilian State:
Article 205. Education is the right of all and a duty of the State and of the family, will be
promoted and encouraged with the collaboration of the society, aiming for the full develop-
ment of the individual, their preparation for the exercise of citizenship and qualification for
work.
As understanding that people, at the carceral re-education process, are vulnerable,

mainly on the psychologic and emotional aspects, the process for integral education
must assume a more meaningful sense, with a view beyond the teaching–learning
process. We must search for a reception in the academic campus, encouraging eman-
cipation, so that the incarcerated citizens attain new values being seen as educatees,
putting extracurricular relations into place by way of a collective work that contributes
for the development of technical competences and social and ethical skills, as from
their welcome inside the institution with assistance programs.
The assistance program comprises a body of knowledge (know-what), practices
(know-how), and attitudes (know-who), ramping up the possibility of perspective
beyond the academic walls across a supportive network of employability for job
creation/work/income generation/and admittance to the social security system. In
this perspective, the learners are having the opportunity to develop on this further
education, understanding on their formative process, growth of potentialities before
the selected course, in the face of all hardships found at the Academia and the
enhancement of the egoic structure, which fosters and supports the learning process.
The proposal is about to enable build on and broaden the understanding and making
sense of the processes of academic graduation.
The proposal has been engaging several actors at the University, such as the
Psychology College, which at the course run-up for the semester, has volunteered
for the reeducatees psychological counseling on a weekly basis, as well as a work for
awareness and guidance of their skills, then achieving the choice of the course in a
guided way, in the final stage. Already in the own selection process for the learners,
the work of the Psychologists corps involved in the project has proven essential, in
view of the mistrust by part of this crowd relating to the initiatives that, supposedly,
aimed to benefit those, which was perfectly understandable, in view of the inmates
are not used to be the center of many social inclusion policies. So, the services
volunteered by the Psychology College, which is part of the Biological Sciences and
Health Center, has demonstrated to be fundamental for the accomplishment of the
project, on the preparatory stage.
In other college units, as the Center for Social Sciences and Applied, in which
the courses offered in this pilot project are linked to; the College of Law, which has
been participating actively in the activities since the very beginning, trying to make
the agreement feasible between the university and the public power, by adapting it
to the prescriptions of the Penal Execution Law, regrettably few times fulfilled in
Brazil; and yet the College of Architecture and Urbanism, which will become to
offer the learners, several classes of artistic technical skills, in order to make possible
other forms of expression, other than the verbal ones, and occasionally to offer new
professional possibilities to the students who have developed this skillset. There
has been the participation of the Faculty of the College of Law, as lecturers, at the
Citizenship Day Penitentiary, of the Dra. Marina Marigo Cardoso de Oliveira, in
April, of 2017. Others will be responsible for workshops of citizenship and human
rights to be offered to the students after-class, in the second semester of the course.
This work seems essential to an education for citizenship. Thus, the joint effort of all
these units, wedded to a framework of excellent service, as well as the commitment
of its administrative corps, which has been in touch with the reeducatees on many
occasions, with the purpose of assuring the reception of the incarcerated person and
or from the ex-convict into the UPM happens in a careful way, providing to the
learner academic follow-up with the aim of well performing throughout the course.
13.3 Target Audience
The choice for carrying out this pilot project in a semi-open unit has come about
considering the possibilities, as provided by law, of leaving the unit for attendance
of learning institutions, which makes easier the commuting of students, without the
need of being under escort. In the semi-open prison units, there is major freedom to
come and go, and the possibility of everyday leave. Also, those who find themselves
in the semi-open regime are closer to the end of the sentence, than those in the closed
prison regime, which ensures that, along the course or at this end, they will be already
ex-convicts, therefore, apt to integrate the job market.
Apropos the option for a women´s prison unit has come about in the first place,
due to the fact of having more female inmates than the male inmates, with high school
concluded or in course, apt to be admitted to college, which increases the number
of eventual candidates for vacancies in college, assuring the good going of the pilot
now turned project. Important to clarify that the female prison selected is the only
unit with a semi-open regime for women in the Capital of São Paulo.
Moreover, it is important to highlight that the majority of the incarcerated women
are nowadays there for their vulnerable condition and lack of opportunities. Drug
trafficking recruits people in need of money and sees this as a possibility of suste-
nance. However, it is about an extremely risky activity, which puts them even more in
a vulnerable situation, in particular, before the criminal justice system. The prison,
in this context, appears as a destination nearly inevitable, being its consequences
extremely disastrous for the biography of those women, as well as their relations
beyond the walls of the prison. We experience these days what the specialists call the
“Boom of the women´s prison system”. Despite the number of men´s incarcerated
population is great than women, there has been an appalling increase of the female
population in the prison system between 2000 and 2014: in the order of magnitude of
567.4%, while the average male growth, in the same period, was of 220.20%, what,
per se, is the important rationale, which justifies an action aiming at the qualification
and re-inclusion of this crown in the society, after the sentence served (Ministério da
Justiça, 2014, 5).
Thus, it has been selected the female semi-open unit based in the capital of the
State of São Paulo, for the accomplishment of the pilot project now introduced. By
means of a selection process coordinated by the Faculty of the UPM Psychology
College, it has been selected, at first, 20 inmates to be interviewed, among those who
complied with the established conditions in law and for the criteria of the prison unit
for the achievement of the course.
In the second stage, constituted through an interview made by Psychologists, there
have been 15 inmates selected to take the vacancies. They are mostly young women
who were employed prior to incarceration. Among them, in their own words, there are
hairdressers, sales assistants, telemarketing operators, office clerks, clothing/garment
store owners, employees of several types of companies, street market stall merchants,
kitchen assistants, housemaids, manicurists, cleaning ladies, dancers, translators,
promoters, teachers, and steelworker.
13.4 The Experience on the First Semester of the Project
Between March till June, of 2019, has happened the preparatory course with the
aim of preparing the students for the entrance in the higher education. It has been
achieved in all 13 face-to-face meetings (a span of 13 weeks) on the premises of
the University. Besides, the reeducatees have accomplished some activities in the
Penitentiary, long-distance, having been donated ten workstations to the correctional
facility and prepared the structure for this purpose, which the own students were
in charge of painting and arranging. The academic preparatory activities have been
planned to be developed in two courses, namely: Methods and skills for studies
through LDL and Methods and skills for academic studies.
The first course has tackled the main aspects of the appropriation and knowledge
of the Long Distance Learning model of the UPM. Besides, it has been worked up
with aspects such as time management (inclusive in class, with timing for each
programmed task), engagement, group discussion, teamwork, individual assign-
ments, Quality researches, use of online tools for text production, and studies. The
appropriation of technological languages and the academic and career guidance were
developed through workshops, with the purpose of providing an interactive experi-
ence and living in an academic atmosphere. The result was reached, by providing
possibilities for the increase of the repertoire of culture, by means of readings and
lectures. The meetings on a weekly basis, of two hours each, have provided opportu-
nities for immersion onto the online platform, knowing of the tools and ambiance for
studies. In every class, the students have had exercises to be posted on the platform
and also have accomplished works in the group.
The second course has tackled methods and techniques for the development of
academic activities, having as the focus to prepare educates to become familiar with
the college academic practice. Individual activities to be delivered on the virtual
environment were the focus for the course, considering the need for familiariza-
tion with the online environment, and the ways of posting of the activities on the
online learning environment Moodle. The online setting counts on video classes,
Reading, exercises, forum for debates, and activities to assist in the construction
of this brand new knowledge. Such a course, also a hybrid, has afforded content
on reading, writing, text comprehension, and exercises for the articulation of the
critical thinking, specific for the higher education, allowing the learners to prepare
themselves for the higher education Technology course that will be done in the next
stage.
There has been a special interest of the reeducates in activities toward collaborative
learning, which can supposedly bear fruit in their professional future. Some of them
who has already shown huge potential to engage in entrepreneurship—on which the
University will turn to foster in future—started showing interest in pulling together
competences to start a business (the case of a hairdresser and a manicurist from the
group).
Another subject that has stirred them up was the matter of time management, so
much important for anyone in search of productiveness in the modern World, where
everything is way fast-paced. Yet when it is about inmates or ex-cons of the prison
system—where time flies by at its own pace, apart from beyond the walls.
During the face-to-face meetings, the reeducatees also attend workshops led by
the UPM Psychology Professors, with the purpose of providing guidance for the
integral education, by offering care and support by means of appropriate strategies of
the psychology, in order to reach out feelings of social belonging, which make sense
to their life stories, in a space for reflection based on feelings about the formative
processes. The group method with a therapeutic or formative perspective, which
makes use of pictures as devices to access the content of individuals in several
situations in life, allowing to tackle different subjects over different contexts, has
been used as a facilitative device to tap into content in a trustworthy ambiance.
The group has participated in weekly workshops that have occurred twice: (I)
Photolanguage, which consists on a strategy of group intervention developed in
France, with the objective of promoting swaps among people in a collective space,
as from those swaps and by means of the mediation of image selection, people can
work up their difficulties, and for instance, reorder questions related to the education
for work, one of the perspectives of the use of the technique; (II) Career guidance
to facilitate the selection of the course to be performed as from the next semester, in
view of mitigating the risk of an inapt choice.
After two years been elapsed, there has been much work in the conception of the
project and in the sessions with the State agents involved, to whom we have been in
contact with on a nearly daily basis, so that it was possible to begin the preparatory
semester, critical for the course outcome, on account of many of the students, who
were out-of-school for a long time and the near total of them were not familiarized
with the long-distance learning.
A huge hindrance to the implementation of the program was the security measures
taken by the prison system, which does not allow inmates to have access to the
Internet. It has been bad times to win the direction over that it would be possible
to save and make the material available onto a memory stick and printouts; and
that the learners could do the exercises on the computers of the correctional facility,
only allowing posting the lessons whenever they where at the university lab, under
the supervision of the course subject Professor and by the Long Distance Learning
teaching assistant.
However, once the course has started, the dedication of the learners has amazed
all of us. As for the “Reception” like we have named the day in which the reeducatees
have been greeted at the University, and there has been a guided tour to the many
spots, such as the library and the historical center, among other activities, and in
each one of them has received the course material and a T-shirt from the UPM, the
enjoyment on having this new opportunity was manifested in their faces. All have
worn the T-shirts at once, and many have said they were yearning for the in-class
day at the University.
Throughout the semester, the liveliness has remained unvarnished. Quite the
contrary, every week the learners were becoming more attentive and interested, and
even the most withdrawn have begun expressing their opinions and questioning,
without any fear. Gradually, they have become to believe in the Project for social
inclusion through the higher education in which they were taking part, to be real—
and there have been no “hidden agendas” behind it. All of them appeared to be
totally self-assured and unwavering to honor the opportunity granted by the end of
the preparatory semester, when they have obtained the certificates and have taken
part in a group dynamics, followed by a celebratory breakfast.
Important to mention that, during the course preparatory semester, 4 out of 15
reeducatees have been freed from prison. However, what it was meant to be grounds
for celebration has turned into fear, in view of we have been expecting their freedom
to come when they had already been concluded the necessary qualification, with
immediate effect, making living for themselves and brood. We need to search for
possible ways to reintegrate those learners into the job market—or enabling their
engagement into entrepreneurial activities.
This is why we have contacted a businesswoman from the textile industry (garment
arm) who have created a designer brand named Joaquina Brasil (Joaquina, 2019),
some years ago, which hires in the foremost place female convicts and ex-cons
from the prison system and, after many hours of conversation, has identified with
the project and were willing to employ all the UPM reeducatees, whenever it is
necessary. Partnerships with businesspeople are Paramount for that some ex-cons,
primarily those who cannot count on any family livelihood support, are able to carry
on the course until the end. Yet, we count, with the purpose of employability, on
companies engaged with the Pro Ex-Con Program of the Government of the State of
São Paulo.
The Business Incubator of Mackenzie is an ecosystem for fostering and support to
the development of new innovative startups—service industry, technology services
based on light manufacturing. UPM is also on the brink of going into a partnership
with a financing startup for small business loans. In the future, Mackenzie´s business
incubator will foster the project of the ex-cons with entrepreneurial potential and
keep track of it for quite some time, with the purpose of the business may have a
high potential of doing well.
13.5 Conclusion
The proposal of social re-inclusion of inmates of the Brazilian prison system through
higher education is a very hard project on the domain of social responsibility, but it is
difficult to highlight the entire project due to many hardships to make it feasible until
the state paperwork to reach the agreements. This able to make potential stakeholders
opting out of the intent; even mistrust by the detainees who feel forlorn behind the
bars of jail, of someone who effectively could be concerned on dedicating a high
standard degree, solely aspiring to assure them social inclusion and citizenship.
The challenges have been coming forward as the project was being defined, with
some even being undreamed of during the project conception, however a multidisci-
plinary and close-knit team, allied to some devoted agents of the public power have
been capable of giving the proper directions before any problem, on which combined
with the University Rectorate´s determination in delivering vocational discernment

for the inclusion of vulnerable groups, it allows the project to do really well.
Those who have been in contact with the project are being rubbed off by its trans-
formational potential; therefore, there have not been few the offers of collaboration.
An embodiment of that was a criminology Professor invited to give a lecture at the
Penitentiary Citizenship Day, which has volunteered aid from their law firm, which
through an agreement with the University, on the brink of entering into, tracking pro
bono the legal cases of the project´s reeducatees.
Greater challenges will come about as the project dares to object to the prison
system goal, which historically has been the one of segregating and excluding the
most vulnerable groups. However, the true calling of the university is not to keep
itself alienated of the surroundings, discussing abstract matters, and without any
potential for transforming society in a place more humane and righteous.
The most important challenge of the project is related with the State Policy and
Higher Education Institutions due to the need to raise awareness of the public manage-
ment and social integration of each citizen in the society, then the next term not to
discredit it for the covenant has been carried out by the predecessor. Social re-
inclusion and citizenship are essential in a society bound to be democratic, and it
may not depend on few men and women of good will.
References
Balibrea, L. F., & Rojas, A. V. (2012). El trabajo em prisión: observando las desigualdades de
género. In: C. del Val Cid & A. Viedma Rojas (Eds.), Condenadas a la desigualdad – sistema de
indicadores de discriminación penitenciaria. Barcelona: Icaria.
Bertolin, P. T. M., & Benedito, A. (2013). Ações Afirmativas. In G. P. Smanio & P. T. Bertolin
(Eds.), O Direito e as Políticas Públicas no Brasil (pp. 371–403). São Paulo, Atlas.
Joaquina, B. (2019). Information site of the projeto “Joaquina Brasil”. http://www.joaquinabrasil.
com.br.
Ministério da Justiça do Brasil. (2016). Levantamento Nacional de Informações Penitenciárias
(INFOPEN). http://www.justica.gov.br/seus-direitos/politica-penal/infopen_dez14.pdf.
Smanio, G. P. (2009). As Dimensões da Cidadania. In: Revista da Escola Superior do Ministério
Público. 2, jan.-jun, p. 13–23.
Universidade Presbiteriana Mackenzie. (2019). Plano de Desenvolvimento Institucional (PDI). São
Paulo: UPM.
Chapter 14
The Social Entrepreneurship
and the Development of Human Capital
Building Social Capital: The Case
of the University of Fortaleza
Randal Martins Pompeu and Marcus Mauricius Holanda
Abstract The study investigates how social entrepreneurship through social respon-
sibility actions can contribute to the development of the professional qualification
and building social capital, as well as analyze the impacts of reducing social exclu-
sion and creating job opportunities for those benefited from the professional training
courses. The research and analyzed field of this study is the Professional Training
Center—(CFP) of the University of Fortaleza, a non-profit institution, located in the
northeast of Brazil and maintained by the Edson Queiroz Foundation that promotes
free professional qualification courses to the low-income communities. The hypoth-
esis that guided this research is the possibility that the social qualification projects
derived from social entrepreneurship actions, can be an instrument of social inclusion,
through the qualification and creation of new opportunities for insertion in the labor
market. The methodology applied in this research has an exploratory nature, which
aims to bring new knowledge about social entrepreneurship and social responsibility
of the universities. The descriptive character aims to understand and list the contri-
butions of social entrepreneurship in the formation of social capital and to analyze
the impacts of the social transformation in the communities inserted in a company
context. In this sense, the University of Fortaleza offers professional training that
contributes effectively to the progress of the local economic growth. International
and national references are used as theoretical resources to develop and delimit
the theories of Social Entrepreneurship, Social Responsibility, Human Capital and
development in order to understand the possibility of the universities to be social
entrepreneurs and transforming agent to economic development. It identified that
social entrepreneurship has great potential to be reproduced with the poor commu-
nities and social exclusion, with the possibility to promote professional qualification
and insertion in the labor market and to promote income generation for the commu-
nity. The results obtained show that the objectives proposed for a professional qual-
ification, namely, qualification and insertion in the labor market of the low-income
population were accomplished, competitive equality derived from the professional
R. M. Pompeu · M. M. Holanda (B)

University of Fortaleza, Fortaleza, Brazil
e-mail: marcusholanda73@gmail.com
https://doi.org/10.1007/978-981-15-6366-9_14
226 R. M. Pompeu and M. M. Holanda
training, with the insertion of the actors that received training and increased income.
It is noticed that the free professional qualification offered by the University of Fort-
aleza, promotes the inclusion and emancipation of the people in the situation of social
risk.
Keywords Social entrepreneurship · Human capital · Social capital · Professional

training center · Local development · Corporate university social responsibility
14.1 Introduction
The concern regarding social entrepreneurship issues creates behaviors that require
the company to assume its duty and participation in the process of developing social,
human, economic, political, cultural, and environmental.
The combat to social inequalities and the cultural gap that divides the popula-
tion, the promotion of human well-being development are not exclusive tasks of the
State, they pass through all institutions. The construction of equilibrium and fraternal
society has become an individual and collective commitment.
In the perspective of social entrepreneurship, creating positive impacts for society
is the main objective. In this way, the formation of human and social capital directs
the actions for the development, profit being the necessary means to implement the
entrepreneurial actions focused on society. From this perspective, the universities are
enabled to promote education and qualification for human formation and contribute
to local economic progress and growth.
This research sought to contribute to better understand the question of how univer-
sities, through social entrepreneurship and social responsibility, have collaborated
to the formation of human capital through professional training. The University of
Fortaleza—UNIFOR, a non-profit institution located in the northeast of Brazil and
maintained by the Edson Queiroz Foundation, was the field of research and analysis
of this study.
The methodology applied in this research has an exploratory nature, intends
to bring new knowledge about social entrepreneurship and social responsibility of
universities. The descriptive character aims to understand and list the contributions of
the social entrepreneurship in the formation of social capital and analyze the impacts
of the social transformation in the communities within the area of influence of the
company.
In this context, professional training has contributed effectively to the progress of
local economic growth. It is noticed that social entrepreneurship is a potential model
to be replicated around the poor communities that are socially excluded, with a great
potential to improve professional qualification and insertion in the labor market and
promote income generation for the community.
The possibility of achieving competitive equality through professional training
promotes access to the potentialities and creates mechanisms of balance for each
14 The Social Entrepreneurship and the Development of Human … 227
individual to have the power to enter the labor market. Education and training are
the key elements for eliminating inequalities and social inclusion.
The results obtained shows that the objectives proposed for a professional qual-
ification, namely: qualification and insertion in the labor market by the low-income
population, were accomplished. Competitive equality derived from the professional
training was established, with the consequent professional insertion and increased
the income of the actors that received training.
14.2 The University and the Formation of Human

and Social Capital
The globalization expansion and the increasing competition in the economic world
have accelerated the use of advanced technologies and as a consequence the emer-
gence of jobs with higher demands. It also outlines a new professional profile, more
flexible and endowed with a broad knowledge about the needs of the community in
which it operates and capable of taking on new situations and getting involved in
solutions to problems in society.
In this context, it is important that the institutions of higher education are able to
meet the challenge: Qualify professionals of excellence with social commitment and
prepare them through higher and professional education, with human training and
constantly updated, to be able to act critically and productively in the community.
The university keeps in symmetry with society by bringing to the academic field
new conceptions of the world (Zainko, 2006). Education represents an important
strategy, which must be used to create changes in the behavior of the individual to
benefit the society by creating life choices.
Education is an important strategy, it is liberating and creates life opportunities
for the individual and benefit to society as a whole (Topal, 2010). It is the greatest
allied in the human formation and consequently the progress of the State, that purges
hunger, poverty, marginalized, corruption, social and economic differences. Only
a population, aware of their history, values, culture, and traditions, are capable of
positioning themselves as subject of their rights and duties, recognizing that the
authorities of the State are their representatives in the function as legislative, executive
and judiciary to guarantee justice for the common good (Pompeu, 2005).
From the recognition and appreciation of the community action process that other
processes began to be created and exalted, having the community as a reference. The
development of the community is proportional to the community action that aims to
protect the interests and ensure solutions to the concerns of the population itself.
Once properly motivated and empowered, the citizens are able to understand the
essence of the social problems and contradictions they face and are subjected to
(Putnam, 1996). Human development provides unlimited possibilities for the fulfill-
ment of essential conditions for the individual: a life with quality, longevity, and
development of personal capacities through education (Diniz, 2010).
In this sense, Pompeu, Marques and Braga (2014, p. 124) assert that in this
scenario, it is important to train qualified professionals for the labor market, in order
to provide solutions to economic and social problems, viewing the challenges of
contemporary society. So that “in light of these conditions, the professionals of the
modern world cannot rely solely on technical expertise; they must also be committed
to fulfilling the needs of society and be ready to provide solutions to social problems”.
The theory of the shared value, Porter and Kramer (2006, p. 11), assert that this
concept “redefines the boundaries of the capitalism by connecting the companies for
better success with the progress of society”. Thus, the company maintains efficiently
profit and behaves in the market in harmony with society, and both develop and
generate mutual benefits for the market and society.
Putnam (1996) defends that social capital has as its basic element the trust, as
well as the norms and social relations chains that contribute to increasing efficiency
of the society. The higher is the level of trust among individuals in the community
higher is the likelihood of cooperation between them and, consequently, greater
social capital. In addition, the more social capital is used the stronger it becomes.
Unlike the financial capital, that usually is private and individual, the social capital
constitutes a public good, since it is not a private property of anyone who benefits
from it.
The social capital, “socially reproductive cooperation” (Franco, 2004, p. 39), is
essential for the proper functioning of organizations and their economic develop-
ment. It represents the potential and ability of individuals to work together, interact
with confidence, aiming common goals in groups or institutions (Fukuyama, 2005).
Therefore, it is a set of common values and relations of trust and cooperation within a
community, and as financial capital, it can be transformed, consumed or reconstituted
(Commission of the European Communities—CEC, 2001).
The idea of human capital, defended by Adam Smith (1723–1790), emphasizes
the role of education and the division of labor as well as the learning and expertise
acquisition to increase the production and contribute to economic and social devel-
opment. It is noticed by Smith (1998) that strongly advocates the power of education
and training as a way to improve human capacities, citizen well-being and to make
the most productive human being over time and contribute greatly to the process of
economic expansion (Sen, 2000).
University education formation should support the processes of citizenship
building, such as respect for human rights, environment, diversity, and must act
in the promotion of culture, in harmony with the global context, local and regional
demands. Education encourages the sense of community while fostering the spirit
of solidarity and cooperation.
Therefore, it is a pedagogical activity designed to foster mutual knowledge (indi-
vidual and collective) and the sense of respect for the other, legitimized through
the development and formative experiences capable of promoting values aimed to
improve integration among peoples, with an end to social welfare, ethics and the
strengthening of citizenship. It is also understood that one of the functions of the
university necessarily passes through the production of high-value knowledge and
this knowledge must be accessible to as many people as possible (Botomé, 1996).
Relating the investment to human capital, Schultz (1961, p. 2) states that

“economists have known for a long time that people are an important part of the
nation’s wealth” and that the productive capacity of the human being is greater than
all fortunes. Defend that financial resources with the training and qualification of
individuals in the organizations increase the productivity and consequently obtain
positive return rates. The investment in human capital, through education and profes-
sional education, represents an intangible resource. It is the skills that become part
of the individual, and cannot be sold, and it is not the property of the organization.
The professional training and qualification, adult education programs, formal
education, including primary, secondary and higher education, represent investments
that the companies provide to the human being, aiming the salary increase, improving
the quality of life of the people, the formation and increase of human capital, having
the productivity value incremented (Schultz, 1961).
The actions of social entrepreneurship that provide the individual growth for
the formation of human capital is the fundamental basis for the valorization of the
community and implantation of social capital.
14.3 Social Entrepreneurship for the Development of Social

Capital and Creation of Social Value
Social entrepreneurship deals with social business and has in society as the main
focus. It is an innovative process focused on the social area; an action based on an
innovative idea and possible to be achieved, aimed to solve a situation that involves
several people or segments of a community and that has a social impact as measur-
able results. Social entrepreneurship has as a strategy action the involvement of the
community with the government and the company (Oliveira, 2008).
According to Oliveira (2008, p. 170), social entrepreneurship can be considered
as a “process of innovation in technology and social management to combat poverty,
social exclusion through the promotion of social emancipation, human development,
citizen empowerment, sustainable local development”.
In this context, social entrepreneurship is defined as a group of people who develop
“innovative solutions to social problems and cause changes in society “(Sarkar, 2008,
p. 32). Social innovation is focused on people management, in order to obtain a
solution to social issues (Marques, 2004).
In this perspective, social entrepreneurs have the primary function of being
socially beneficial and according to Martin and Osberg (2007), they do not orga-
nize themselves to generate substantial profits for investors but seek social value in
the form of benefits to society.
Jones (1980) asserts that companies have an obligation with the society in general,
in viewing the impact and consequences of corporate actions within society. In this
sense, arises the idea that companies are responsible for their actions in the world
and not just locally.
In this circumstances, Yunus (2011) affirms that the companies have a duty to
support economic and social development, and also claims that the objective of the
businesses, besides the profit for the shareholders, is to overcome poverty, as well
as support in the solution of education problems, health, environment, and various
social problems, not only maximize profit.
In this perspective, Yunus (2011) asserts that the rules of corporate citizenship
directed to social entrepreneurship must, above all, ensure that businesses do not
put in endanger anybody’s life, which implies not putting the life of the workers
at risk and avoid to pollute the environment, as minimum steps to create a healthy
environment, develop products easier and safer for those who use them. Nonetheless,
it also asserts that the compliance of the laws must be established, as well as the
promotion of practices for a better world.
In this sense, Pompeu and Marques (2012) demonstrate that both social
entrepreneurship and social responsibility are presented in their active form when
qualifying and empowering people, and prepare them for the insertion in the labor
market, by adopting practices that support social inclusion with the power to trans-
form these people qualitatively and generates greater economic and social integration
in human development, especially with the use of inclusive practices.
It is perceived that social entrepreneurship is based on the creation of social value
for the transformation of society with a positive social impact, always focusing on
social innovation and the construction of social technologies to meet the need to
solve the problems that afflict society and thereby generate positive social impact.
In this sense, it is perceived that social entrepreneurship has its foundation of
existence focused on social interaction and actions that positively influence change
in society. Promote the development of society is the primary objective of the social
entrepreneur, with profit being secondary and supporting social goals (Dess, 1998).
It is observed that the mission of social entrepreneurs “is explicit and central”,
as Dess (1998, p. 2) explains, the social impacts of social entrepreneurship in the
construction of a fair society are the main focus and not only the creation of wealth,
since this is a means to achieve the mission of the social entrepreneur.
Social entrepreneurship has the mission of maximizing social value (Parente &
Quintão, 2014) and also has the commitment to maximizing social results. In this
perspective, Melo and Froes (2002, p. 34) understand that the social entrepreneur-
ship has its driving force through transformative ideas and “assumes an attitude of
nonconformity and criticism facing the existing social injustices in its region and in
the world”.
Thus, social entrepreneurship focuses on the collective for the production of
goods, services, development of social technologies, directed to solve social prob-
lems and positively impact the community through its social transformation and
elimination of risk situations and economic neglect.
Analyzing the social entrepreneurship, it stands out that with the dynamism and
stimulation of social transformations by creating solutions and innovations for the
problems that afflict society. By innovating, it brings the possibility of realizing
sustainable transformations and of positive impact on the community in the medium
or long term (Alvord, Brown & Letts, 2002).
In this perspective of stimulating social transformations with innovative actions,

it establishes the creation of social value for the community in the resolution of the
social problems that directly reach it. In this way, the establishment of social value
can be understood as the result of the positive impact derived from the actions of
social entrepreneurship that generate benefits to society.
These social values must be created in such a way that they are permanent,
grounded all the actions of social entrepreneurship and their intrinsic relationship
with the community in solving the problems that directly affect it.
14.4 The Profissional Training Center of the University

of Fortaleza as an Instrument of Training, Inclusion,
and Social Transformation
The case of the Professional Training Center is a great example of social entrepreneur-
ship since it is based on the transformation of society; it is possible to create innova-
tive businesses with the development of social technologies on behalf of human and
social development by promoting opportunities for the needy and helpless population.
(Unifor, 2019a).
This way the analysis of the case of the Professional Training Center was chosen
as a successful example of social entrepreneurship that transforms the lives of thou-
sands of poor and marginalized communities. Despite the students trained in the
courses come from different places and far from the University of Fortaleza, the
main objective of the project is to change the reality of the population, mainly local,
whose the social problems coming from the poverty, lack of education, health, and
low income is the reality of almost the entire local population.
The courses offered, allied with the direction to insertion in the market, widen
employment opportunities, and raise family incomes, creating a positive impact for
the community in promoting the economic and social development.
Thus, in order to contribute to the growth of the State of Ceará, through educa-
tion and professional qualification, the Edson Queiroz Foundation has promoted,
for more than 30 years, social entrepreneurship and social responsibility actions,
by aiming to engage the students and encouraging the interaction of the academic
community with social projects. In this way, the concept of learning in the class-
room is covered, housing the socialization, knowledge by providing services to the
community, materializing it in social benefits.
Every year, the Edson Queiroz Foundation expands its operating philosophy,
which consists in promoting the acceleration of the development and growth, with
the primary mission of supporting initiatives for the production of positive results
for all society, through the renewal of teaching and adoption of skillful mechanisms
with a variety of ideas that can contribute to a Brazil socially fairer (Unifor, 2019b).
14.5 Case Analysis of the University of Fortaleza—The

Formation of Human and Social Capital
The creation of the University of Fortaleza—UNIFOR by the Edson Queiroz Founda-

tion happened around the 1973s when Brazil was facing a crisis in higher education
due to the reduced number of places available (Unifor, 2019b). The exit of many
young people to live in other states to pursue or for completing their studies was
inevitable because, in large urban centers, other institutions of higher education could
fulfill their aspirations. In the State of Ceará, the number of vacancies available in
the few university courses was offered only by two public institutions based in Fort-
aleza, capital of the State of Ceará, the Federal University of Ceará (UFC) installed
in 1956 and the State University of Ceará (UECE), initially created as Educational
Foundation of the State of Ceará (FUNEDUCE) in 1973 (UECE, 2019).
However, the conception of UNIFOR was not only motivated by a market study
that revealed the lack in the State’s educational system, but it aimed also to act in the
development process of the region and to provoke changes in the social and economic
status of the beneficiaries, with positive effects for families and the community. The
Edson Queiroz Foundation, a non-profit private organization, allocates the resources
of student’s tuition payments for academic education to activities that can contribute
socially with the population in need of the city of Fortaleza. The academic courses,
offered by the University, are based on methodologies that reconcile the teaching
of excellence with regional development, making impossible the inseparability of
Teaching, Research, and Extension (Lei n. 9.394, 1996).
In this way, the social entrepreneurship of the University becomes an indispensable
tool to decrease the social inequalities caused by transnational market capitalism. Its
effectiveness is closely related to the awareness of the faculty and student body
and constitutes a project of shared responsibilities. It promotes the synergy of the
activities developed at the university with the needs of society (Tassigny, 2008).
UNIFOR is an institution dedicated to the development of Teaching, Research,
and Extension, extending to the professional training that is materialized with the
Profissional Training Center—(CFP), coordinated by the Vice-Rectory of Extension
and University Community. The CFP project was created in 2002 to provide training
to low income or to people without an occupation, by offering them technical and
professional courses. The courses are offered in three different shifts, enable the
residents of poor communities to carry out activities that can facilitate employment
and generate income (Pompeu & Holanda, 2019).
The University defines its activities based on three basic premises: service provi-
sion to the community, the relationship between teaching and research, and inte-
gration among academic and social activity. That gives the necessary capacity for
organization and articulation for social development, and without these actions, it
could be confused just as assistentialism. The urgency for inclusive practices, driven
by the social movement itself strengthened and strives for guaranteeing the essential
rights for building a minimum level of equality among individuals, forms the idea of
citizen emancipation allied to the need for effective social actions.
The courses offered at the Professional Training Center fulfill the procedure of the
projects elaborated with the pedagogical support of the faculty of the University of
Fortaleza, and consequently, approval of the Vice-Rectory of Extension and Univer-
sity Community and Rectory. It is necessary to assert that all students, regardless of
the course, can receive a certificate, a document that gives authenticity and legiti-
macy upon approval, which is given through the verification of the frequency and
final evaluation of each course, by tests and/or practical activities, with the purpose
of evaluating the subject taught in each module.
The courses are held at the University of Fortaleza Campus, in classrooms adapted
to the number of students, between 25 and 30 students per class, aiming for a better
involvement among the community and academic context. The enrollment process
occurs periodically, to allow the presence of a greater number of people, enabling
access to professional education. The students of the Professional Training Center
can also enjoy the infrastructure and physical space of the University of Fortaleza
because the courses are taught with access to workshops, print shop, video library,
and computer and electronics labs (Unifor, 2019a).
The didactic material is provided free of charge and as a stimulus to continuous
study, allowing the students to follow the subjects taught and the adaptation to the
educational process, providing differentiated training. Under the aegis of a dynamic
and inclusive pedagogical practice, professional education also points to the forma-
tion of citizens, denoting the transformative force of a socially neglected individual
that recovers possibilities for insertion through professional training.
The students have the chance to practice the knowledge learned with activities of
a practical nature, consolidating the theoretical knowledge and developing specific
skills, coherent to the objectives of each course. Evaluations are carried out periodi-
cally with the purpose of verifying the quality of the courses taught and mainly the
acceptance of the community to the initiative offered by the University, as well the
collection of suggestions for new courses and analysis of the learned content.
Usually, courses are offered in the area of Tourism, such as Waiter Training,
Waiter Assistant, Housekeeper, basic Foreign Languages, and English and Spanish
for Tourist Workers. In the area of technological sciences, the following courses
are offered: Basic Computing, Civil Construction Assistant, Architectural Plants
Reading, Basic Electrician, and Advanced Computer Maintenance. At the Adminis-
trative Sciences area, the courses most sought are Office Assistant, Concierge, and
Retailers Agents. This offer also aims to qualify and standardize the performance
as street vendors within the UNIFOR campus, providing to the participants specific
training and provide practical internship for Administrative Sciences students. In the
Health Sciences Center, the courses related to Child and Elderly Caregivers and to
the use of medicinal plants can be highlighted, among others (Unifor, 2019a).
The research was conducted through UNIFOR internal documents and reports,
and it could be observed that during 17 years of existence of the project, more than
36,000 (thirty-six thousand) people have been trained in the areas of technology,
administrative, and health. Students teach the professional training courses from
different fields of the University, guided by qualified faculty with the support and
coordination of their respective undergraduate courses. An opportunity to combine
theoretical learning with practical experience in promoting knowledge as an element

indispensable for good professional training in each field.
After the data collection and its subsequent analysis, it was observed that in
2018, 110 courses were held in four modules of three months each, with a workload
average of 60–80 h. More than 2,671 students, from one hundred and ten classes,
were qualified to re-enter the labor market and to carry out specific work activities.
It was noticed that until June 2019, 1.620 vacancies were distributed in 54 classes
of various types of courses. It is important to highlight that, for the first time, a class
of 30 students with hearing impairment was taught in Brazilian Sign Language—
Libras. Throughout 2019 it will still be carried out in two more blocks of courses with
the forecast of another 1,500 vacancies to be offered free of charge to the population.
It is possible to observe that the fight against social exclusion is concretized by
adopting practices directed to minimize its effects, implementing mechanisms able
to the people development and the construction of professional education spaces.
The social indicators of communities surrounding the University of Fortaleza, for
example, highlight the urgency of the implementation of initiatives that proclaim a
new relationship between university and community in a more participative and active
way to reduce the inequalities of access to education, dignity, social rights, priori-
tizing the individual and the sustainability relation between university community
and external public.
The actions of social entrepreneurship and social responsibility of the University
are shown in an active way the qualification and training of people for insertion in the
labor market, by adopting practices to support social inclusion, in a significant and
present way in the execution of initiatives. The integration of people, especially those
living under the circumstance of social risk, evidences the need for mobilization and
articulation of effective actions as an essential condition for social adequacy, in order
to confer them the decision-making power of active participation in society.
There is also a need for a continuous reflection on the social role of agents who
adopt inclusive practices, such as the University, which uses its own human resources
for the materialization of initiatives like the Profissional Training Center, avoiding
the refuge to assistentialism to work on insertion mechanisms of an individual to
building citizenship and professional improvement.
Therefore, the impact perceived in this connection with the market is a great
absorption of these professionals by the companies. Alongside this, the training
serves as an instrument of human development in general, with successful cases not
only in the opportunity of employment, but also in stimulating entrepreneurship, with
an incentive to create new businesses and perspectives of lives.
It is noticed that the actions of UNIFOR’s CFP project in promoting profes-
sional training courses serve as a great tool for transforming local society. Associ-
ated with the focus on the people and formation of social networks, UNIFOR’s CFP
contributes to the regional and local development and stimulates social entrepreneur-
ship. This practice can be observed in the studies of Slaughter and Rhoades (2004)
and Thompson (2004).
The university plays the role of the agent of social and economic transformation by
offering professional courses, promoting sustainable human development, focusing
on people, and contributes to the formation of human and social capital (Pompeu &
Holanda, 2019).
In this perspective, it is identified that the UNIFOR institutionalizes the social
entrepreneurship and social responsibility by the involvement of the faculty in the
organization of content and the student as a monitor of the CPF courses. It creates a
competitive differential and provides a positive response to Stakeholders.
It also stimulates culture, the development of social networks, and contributes
to regional and local development. In this way, there is the formation of human and
social capital, which contributes to sustainable local development of the communities
to solve the social problems that directly affect them.
14.6 Conclusion
This research shows how the social entrepreneurship actions of the University of Fort-
aleza—UNIFOR contribute to the formation of human and social capital and acts as
a sustainable local development tool through professional training. The University,
by implementing social entrepreneurship projects through professional qualifica-
tion, conciliates theory and practice, transforms students, faculty, employees, and
the community into citizenship committed with a society where they are inserted,
concerned about the social injustices, responsible for local development, for social
inclusion and the realization of social rights.
It is observed that the social technology developed through the Profissional
Training Center can contribute to the solution of problems and seeks to repair one
of the main causes of social problems, namely: the absence of inclusive education
that promotes the professional training of the population and direct them to the job
market. In this way, the social impacts derived from UNIFOR’s social entrepreneur-
ship actions create a beneficial impression with fruitful results for society. Thus,
it can be seen that the actions generate in practice economic emancipation, social
inclusion, and autonomy of the citizens.
It is noticed that the Profissional Training Center, through UNIFOR’s social
entrepreneurship and throughout its 17 years of existence, has already trained more
than 36,000 (thirty-six thousand) citizens in need of specialized training. In addition
to promoting the creation of social capital, the value of such actions has the capacity
to promote the sustainable development of the community by eliminating the gap of
education and technical professional development that makes society able of devel-
oping solidarity activities and contextualizing the acquired knowledge in order to
solve the community problems.
It is perceived that the University of Fortaleza—UNIFOR as a private higher
educational institution, maintained by Edson Queiroz Foundation, a non-profit orga-
nization, fulfills its commitment with the economic and social development by
carrying out and promoting services of positive impact in the region in which it
installed, targeting the underprivileged population, contributing unequivocally to the
development of human and social capital and also promotes sustainable development
in the region, focusing on innovation and social entrepreneurship.
The results obtained in this study showed that UNIFOR through social
entrepreneurship:(i) invests in human capital by offering free professional training
courses, based on the demand and characteristics of the region; (ii) promotes the
improvement of the quality of life of people living in the areas surrounding the
institutions; (iii) encourages the creation of start-ups and new businesses, promoting
innovation and entrepreneurship; (iv) trains professionals of excellence, committed,
and awareness of social problems; (v) promotes self-esteem and credibility among
the people of the same community, investing in social capital, and (vi) becomes a
transforming agent and instrument of sustainable local development.
It is pointed out that the University of Fortaleza—UNIFOR effectively promotes
through social entrepreneurship, strategies for the construction of a multicultural and
inclusive democratic society, by reducing the social inequalities.
In this context, education with human training becomes an important strategy
in the qualification and training of professionals, able to act critically and produc-
tively facing new challenges of contemporary society. The desired institution of
higher education in the twenty-first century represents the place of transmission and
construction of knowledge as a fundamental space where democracy, citizenship,
and social justice are promoted.
In order to ascertain the evidence on the development and training of human
capital derived from the courses of the Professional Training Center, the University
of Fortaleza, in 2019, created the center for monitoring graduates in the labor market.
The initial follow-up was carried out with 485 graduates.
A degree of employability of 76.30% outcome for these graduates, as a result
of the completion of the courses, which is considered a positive result. Besides, the
monitoring group registered that the graduates feel empowered and with high self-
esteem for having completed a professional training course with excellent acceptance
by the job market.
There were 119 spontaneous reports of satisfaction and gratitude to UNIFOR for
having provided the professional training they needed so much to join a job opening.
The center for monitoring graduates in the labor market detected that some grad-
uates have not concluded the courses. Thereby, while trying to identify the reasons
why the amount of 39 students were able to complete the training, it was noted that 26
students didn’t do it. The reason why these students have not concluded the training
is because they got jobs and claim that the content taught in the CFP was essential
for this achievement.
The center for monitoring graduates in the labor market detected that some grad-
uates have not concluded the courses. Thereby, while trying to identify the reasons
why 39 students were able to complete the training, it was noted that the amount of 26
students didn’t do it. The reason why these students have not concluded the training
is that they got jobs and claim that the content taught in the CFP was essential for
this achievement.
For the year 2020, the proposal is to apply a questionnaire at the end of each
course to all students, as well as keep track of them for 3 months in order to verify
the degree of employability resulting from the courses offered by UNIFOR.
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Chapter 15
The Future of the Accounting Degree
Rute Abreu and Ermelinda Oliveira
Abstract Many insolvencies and bankruptcy cases, especially, among countries that
are economically and financially dependent on others, were reported in newspapers
and scientific journals, but the list of reasons and risks are truly a failure to treat the
underlying cause of these cases. Without no doubt that the accounting information
system applied in a firm generates reports that identifies quickly all the data, then
the relevant information, produced by this system, allows to appropriately prevent
this situation. A comprehensive overview of these tendencies, all over the world, will
promote the most important competencies to help accountant professionals to become
leaders and guide their firms to reach their personal and organizational goals, such as:
strategy, planning, performance, reporting, control, technology and analytics, busi-
ness operations, professional ethics and values. Since the pioneering guidelines of
the International Accounting Education Standards Board (IAESB) that published the
International Education Standards (IES) for their professional development and in
order to the higher education student careers and their businesses be more ethically
and sustainably developed. Methodologically, this research focuses, on the one hand,
in the literature review to contextualize the accounting degree, in general, and, the
competency framework for professionals in the digital age. On the other hand, it
promotes the investigation of the new approach to advancing accountancy education
at the national level. The research is supported by the international accounting stan-
dards and, also, the information and communications technology skills and profes-
sional scepticism proficiency grow across legal, financial, economic and social juris-
dictions. In the future of the accounting degree, the results of this research evaluate
the impact to provide education to accounting students and training to accounting
professionals to correctly perform reports for rapid diagnosis of dramatic economical
and financial situations. The novelty is that the graduate in accounting will be self-
critical for each day activities, politics and strategies, especially when they prepare
R. Abreu (B)
Instituto Politécnico da Guarda/UDI-IPG/CICF-IPCA/CISeD-IPV, Guarda, Portugal
e-mail: ra_ipg@hotmail.com
E. Oliveira
Instituto Politécnico da Guarda/UDI-IPG/Citur-Guarda, Guarda, Portugal
https://doi.org/10.1007/978-981-15-6366-9_15
240 R. Abreu and E. Oliveira
statistical systems in large scale with new sources and legal databases to diagnose
problems earlier and then propose solutions.
Keywords Accounting · Higher education · Portugal · Education strategies
15.1 Introduction
This research recognizes the central role of the labour market of the accounting
degree with the presence of effectiveness, efficiency and strengths for the future.
Indeed, Education for Sustainable Development (ESD) plays an essential role in
providing students with the knowledge and skills to improve solutions to the global
sustainability challenges through innovative pedagogy that enhances quality teaching
and learning (UNESCO, 2014, 3).
Methodologically, this research focuses, on the one hand, in the literature review to
contextualize the accounting degree, in general, and, the competency framework for
professionals in the digital age. On the other hand, it promotes the investigation of the
new approach to advancing accountancy education at the national level. The research
is supported by the international accounting standards and, also, the information and
communications technologies skills and professional scepticism proficiency grows
across legal, financial, economic and social jurisdictions.
This research is unique, because it presents an evaluation of the accounting degree
in Portugal which allows to promote sustainable development of the accounting
market. This market recognizes the importance and the promotion of sustainable
development that are consistent with taxation and accounting obligations under the
challenges of a mix of standards, including regulatory, voluntary and other rules
that must be applied, at the national level. The exchange of experiences for the
organization is vital to reaffirm new opportunities and fight for risks on inequality, as
well as, examples, such as: United Nations Conference on Sustainable Development
in Rio (UNCSD, 2012) that invites “accountants would save the world.” (Bakker,
2013).
For many decades, the successful firm on the future will be open up to entirely
new possibilities for improving by the accounting context and making it timelier
to the needs of information of the management structure that will be conducive to
innovation (Ansoff, 1965). Beyond this, both external and internal problems are
given appropriate and continuous attention. The impact may be direct in terms of
the firm (insolvency or bankruptcy), or indirect, in the lower level of taxes and
economic activities. These perspectives allow to promote the use of big data sources
as a transparent and independent data to take economic and financial decisions that
promote the well-being of the society. Because of these tactics, the level of knowledge
and skills needed for the accounting degree demands from the higher education
system new approaches, new methodological strategies and more dynamics of all
scientific areas. All relevant areas must input understanding and awareness of the
economic reality to the accountant student and also the accountant professional due
15 The Future of the Accounting Degree 241
to the velocity of the information and the data produced which demands how quickly
the accounting degree change to the new concepts on the debate on a worldwide
basis and under the (national and international) accounting standards. A competitive
and sustainable higher education system is needed to push the innovation of the
accounting degrees and markets to more sustainable development.
The remainder of this article is organized as follows. Section 15.1 presents the
introduction of this research. Section 15.2 provides a literature review about the
Higher Education System, in general, and the Accounting Degree, in particular.
Section 15.3 presents the empirical methodology to manage statistics about the
accounting degree in Portugal. The final section of the article summarizes results
and suggestions of future lines of research, knowing that accountancy education
must join strategies of the professional accountancy organizations, public accounting
firms, employers, higher education institutions and professional education providers.
15.2 Theoretical Framework: The Higher Education

System and the Accounting Degree
The theoretical framework of this research is based on the Portuguese educational

system regulated by the Basic Law of the Educational System (AR, 1986). This
system is developed in three complementary levels: basic, secondary and higher
education and pre-school till 3 years old and short cycle for the professional voca-
tional training. In Table 15.1, it is presented the distribution of the number of students,
from 1996 till 2018, by year and level of education.
From the school year of 1996/1997 to the school year of 2017/2018, the number
of students had a decrease of 305,155 students, due to the stronger reduction of birth
rate. Indeed, the basic education (first cycle) had a strong decrease with 156,447
students with a negative relative value of 30.95% of the total students. The higher
education had an increase of 109,715 students with the most significant relative
value of 55.2% of the total students. So, this research focuses on the total students
of 308,489 that go to the Portuguese Higher Education.
The Portuguese Higher Education is organized in a binary system that integrates
University and Polytechnic Education and subdivided into public and private institu-
tions. Thus, the polytechnic education, the first cycle degree can be obtained after the
conclusion of 180 ECTS credits and a normal length with 6 semesters and, excep-
tionally some degrees, such as mandatory by the same professional order demands
more ECTS credits up to 240 with 7 or 8 semesters. Also, in university education,
this degree has the same length.
The degree of “Licenciado” is conferred to those Higher Education Institutions
which, through the approval in all the curricular units, have obtained the necessary
number of credits. This degree is awarded to students that:
(a) Demonstrate knowledge and understanding in a training area in such a level
that:
Table 15.1 Distribution of number of students by year and level of education, 1996–2018
Year Level of education
Total Pre-school Basic education Secondary Short Higher
education 1st cycle 2nd 3rd education cycle education
cycle cycle
1996 1,922,725 82,828 505,514 289,482 429,818 416,309 – 198,774
1997 1,893,727 94,530 492,089 277,154 419,062 398,166 – 212,726
1998 1,871,464 100,753 489,700 258,257 413,851 382,261 – 226,642
1999 1,847,321 105,517 489,193 253,517 398,094 362,143 – 238,857
2000 1,843,185 113,644 489,049 248,364 382,288 354,832 – 255,008
2001 1,834,792 117,226 483,329 243,735 372,837 344,135 – 273,530
2002 1,802,759 123,060 468,241 241,637 358,987 326,045 – 284,789
2003 1,784,653 127,688 458,684 243,246 347,423 316,848 232 290,532
2004 1,779,117 133,353 456,725 243,650 341,590 315,066 424 288,309
2005 1,760,120 137,297 454,458 238,122 336,593 310,762 615 282,273
2006 1,716,075 139,412 443,906 226,488 346,973 282,424 1,351 275,521
2007 1,729,083 138,168 447,527 225,426 350,856 289,714 2,071 275,321
2008 1,762,540 141,854 445,768 233,272 372,344 280,286 4,683 284,333
2009 1,902,774 142,347 433,288 236,174 424,806 377,981 5,740 282,438
2010 1,881,505 141,044 424,587 236,023 409,416 369,979 6,628 293,828
2011 1,844,317 143,472 410,040 241,652 389,692 343,341 8,142 307,978
2012 1,788,121 144,918 400,439 230,961 371,889 319,542 8,798 311,574
2013 1,731,329 143,584 388,658 221,667 349,617 315,014 9,079 303,710
2014 1,687,590 141,999 373,644 219,003 335,894 305,613 9,783 301,654
2015 1,668,023 141,571 367,667 207,369 336,527 312,497 10,033 292,359
2016 1,629,116 137,573 357,232 198,871 323,435 307,984 6,137 297,884
2017 1,624,713 133,930 352,382 196,158 320,358 314,478 4,811 302,596
2018 1,617,570 127,535 349,067 193,563 318,711 315,522 4,683 308,489
Source PORDATA (2019)
(i) Based on the knowledge acquired in secondary education, may develop

and expand upon it;
(ii) Can work with advanced learning materials and relate to them;
(iii) Have state-of-the-art knowledge in some aspects of that area.
(b) Demonstrate how to apply acquired knowledge and understanding capacity, in

order to clearly demonstrate a professional approach to the work carried out in
their vocational area;
(c) Have the capacity to solve problems within the field of their training area, based
upon their own arguments;
Table 15.2 Distribution of Portuguese students by level of ISCED and by gender, 2017/2018
Gender 5—Short cycle 6—Licenciado or 7—Master degree 8—PhD degree Total
degrees equivalent or equivalent
Men 2,176 19,812 10,346 1,067 33,401
Women 1,580 28,996 14,673 1,199 46,448
Total 3,756 48,808 25,019 2,266 79,849
Source DGES (2019)
(d) Have the capacity to collate, select and interpret relevant information, particu-
larly in their training area, which will enable them to consolidate the solutions
they present and the opinions they put forward, including the analysis of relevant
social, scientific and ethical aspects;
(e) Possess competencies that enable them to communicate information, ideas,
problems and solutions, both to experts and non-experts;
(f) Possess learning competencies that will enable them to benefit from lifelong
learning with a high degree of autonomy.
The total number of students that have been graduated on the education
programmes promoted by Universities and Institutos Politécnicos based on the
International Standard Classification of Education (ISCED) level of qualification
is presented in Table 15.2. It is important to detail that ISCED presents each level:
short cycle degrees, Licenciado or equivalent, master’s degree or equivalent, PhD
degree has been implemented by all countries in EU since 2014.
In Table 15.2, during the school year of 2017/2018, the total students of 79,849
has concluded at least one degree. Women present the higher value in 6, 7, 8 ISCED
levels of qualification, an exception has to be made in the short cycle’s degree, in
which men present higher number than women, basically due to the professional
focus of these courses and relation with labour market. Also, important is that 61%
of the total students have obtained a graduate degree (licenciado in Portuguese),
31% master degree, 4.7% short cycle degree, but, only 2.8% of the total students
have Ph.D. degree with same number of men and women.
Table 15.3 shows the distribution of graduate students by the school year since
1996/1997 till 2017/2018 and general area of education and training.
In Table 15.3, from the school year of 1996/1997 to the school year of 2017/2018,
a total students of 1,510,088 have concluded at least one degree. The general area
“business sciences, administration and law” has a total of 296,537 students which is
the most significant. After the school year of 2013/2014, it appears that 118 students
are without a classification on the general area of education and training and it has
been classified as “unknown area”. This research is focused on the most relevant
general scientific area during this period of analysis with less graduate students in
the school year of 2008/2009 with 12,802 (17.3% of the total students) and the higher
in the school year of 2017/2018 with 16,178 (20.3% of the total students).
Due to the importance of the general area of “business sciences, administration
and law”, this research details the population of 29 degrees developed by 21 Higher
Table 15.3 Distribution of graduate students by school year and general area of education and training from 1996/1997 to 2017/2018
244
General area of education and 1996/97 1997/98 1998/99 1999/00 2000/01 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07
training
Education and training 6,354 6,619 8,245 9,607 11,936 14,024 14,949 12,088 10,112 8,672 6,916
Arts and humanities 4,227 4,626 4,693 4,779 4,814 5,283 5,643 5,927 6,059 5,989 7,039
Social sciences, journalism and 4,580 5,129 5,655 5,416 5,453 5,523 6,050 6,162 6,698 7,722 9,118
information
Business sciences, administration 11,659 12,646 13,964 13,307 13,452 12,067 12,395 12,412 12,079 12,415 15,269
and law
Natural sciences, mathematics and 2,020 2,139 2,089 2,281 2,486 2,782 3,212 3,254 3,370 3,079 3,890
statistics
Information and communication 807 980 876 892 862 966 914 1,117 1,199 1,032 1,305
technologies
Engineering, manufacturing and 5,508 6,380 7,063 7,363 7,533 8,736 9,518 10,126 10745 10,688 16,530
construction
Agriculture, forestry, fisheries and 987 1,212 1,187 1,217 1,389 1,319 1,389 1,321 1,352 1,214 1,409
veterinary science
Health and social protection 4,788 4,388 5,066 6,892 10,142 9,795 10,485 11,505 13,113 15,000 15,505
Services 1,253 1,738 1,963 1,879 2,024 2,402 2,661 2,959 3,346 3,398 3,560
Unknow area
(continued)
R. Abreu and E. Oliveira
training
Total 42,183 45,857 50,801 53,633 60,091 62,897 67,216 66,871 68,073 69,209 80,541
training
Education and training 5,200 4,459 6,422 5,812 6,994 6,138 5,234 5,161 3,861 3,702 3,526
Arts and humanities 7,407 6,269 6,302 6,286 6,946 7,403 7,104 6,742 6,875 7,693 8,045
Social sciences, journalism and 8,890 8,987 8,804 8,574 9,489 8,929 8,336 8,479 8,247 8,427 8,905
information
Business sciences, administration 13,702 12,802 13,121 13,513 14,520 14,609 13,618 13,950 13,944 14,915 16,178
15 The Future of the Accounting Degree
and law
Natural sciences, mathematics and 4,818 4,121 3,866 4,102 4,379 4,578 4,471 4,661 4,810 4,828 4,897
statistics
Information and communication 1,388 1,181 1,002 993 1,048 1,055 919 862 857 1,479 1,745
technologies
Engineering, manufacturing and 18,045 15,684 15,059 15,449 15,713 16,333 15,083 15,338 15,545 16,105 15,635
construction
Agriculture, forestry, fisheries and 2,046 1,471 1,255 1,354 1,067 1,259 1,301 1,408 1,416 1,711 1,874
veterinary science
Health and social protection 16,442 14,853 15,066 15,298 14,751 14,430 13,793 13,885 13,305 13,412 13,972
Services 3,601 4,030 4,105 4,101 4,127 4,213 4,262 4,250 4,204 4,735 5,032
Unknow area 8 21 22 27 40
Total 81,539 73,857 75,002 75,482 79,034 78,947 74,129 74,757 73,086 77,034 79,849
Source DGES (2019)
245
Education Institutions, where 8 degrees on 5 Private Higher Education Institutions

and 21 degrees on 16 Public Higher Education Institutions and 1,787 places for
each school year about accounting as it is presented in the next table. A better
understanding of Table 15.4 shows that in general the accounting degree has 6 years
of accreditation from the National Agency of Accreditation Studies.
Table 15.4 details that the distribution of the accounting degree only in Portugal
continental, because the Madeira and Açores Universities do not have this degree.
Also, relevant is the location available to future students in the literal of Portugal
continental and in large cities. Furthermore, future students could be increasingly
confused with so many information, because of the unlimited sources. Thus, it is
fundamental that family and older students influence the younger students. Also,
the Higher Education Institutions can facilitate the dialogue across multiple stake-
holders, including government, private sector, academic and scientific community,
civil societies and the public (El-Jardali, Ataya, & Fadlallah, 2018).
15.3 Empirical Framework: The Accounting Degree
The empirical framework is based on the data that is available on the website of the
Science and Higher Education National Directorate of the Portuguese Government
related with all the degrees and their basic indicators. Firstly, it exists in all the
degrees (which does not, however, mean that it can be accessed by all, especially,
to does degree that is mandatory the process of close.) Secondly, all questions are
answered and publicly available as an independent source based on the answer by
the students of each degree. Thirdly, it has potential relevance to all the questions that
allow to analyse each one for each degree and compare them. Besides the information
presented in each question, the flow determines the importance of the education and
then capture the changes during the time and each degree in the labour market.
The first question—How the students entered on this course?—will be analysed
by degree and by Higher Education Institution.
This analysis presents the distribution of 48.182 students of all the degrees in Portugal. So,
their options in which students enrolled in the first year, for the first time, in the academic
years 2017/18, are: 41.4% for the first option of the national competition for higher education
access; 19.6% for the other options or modalities for higher education access; 15.3% for the
second option of the national competition for higher education access; 11.4% other forms
for higher education access; 6.1% for the change and transfer of the degree and 6.1% for
access to older than 23 years.
The second question—Where are the students one year after starting this
course?—will be analysed by degree and by Higher Education Institution.
The national distribution of the 45.397 students with 81.6% students are enrolled in the
same course; 8.2% students were not found in the National Higher Education (because they
are working); 5.1% students are enrolled in another course of the same Higher Education
Institution and 4.9% of the total students are enrolled in a course of another Higher Education
Institution. Each student will necessarily be in only one of these categories.
Table 15.4 Distribution of the accounting degree in Portugal, 2019

Higher Degree ECTS Semesters CNAEF Places Level of Accreditation
education qualification of A3ES
institution
IPGuarda Accounting 180 6 344 35 Licenciado 6 years
(2018)
IPBraganca Accounting 180 6 344 75 Licenciado 6 years
(2018)
IPCastelo Accounting 180 6 344 30 Licenciado 2013
Branco and
Financial
Management
IPCoimbra Accounting 180 6 344 45 Licenciado 2014
- ESTG OH and
Management
IPCoimbra Accounting 180 6 344 85 Licenciado 6 years
- ISCAC and Auditing (2018)
IPCoimbra Accounting 180 6 344 55 Licenciado 1 year (2018)
- ISCAC and Public
Management
IPCoimbra Finance and 180 6 344 40 Licenciado 2015
- ISCAC Accounting
IPLeiria Accounting 180 6 344 70 Licenciado 6 years
and Taxation (2018)
IPLisboa Accounting 180 6 344 322 Licenciado 1 year (2018)
and
Management
IPSantarem Accounting 180 6 344 60 Licenciado 6 years
and Taxation (2019)
IPSetubal Accounting 180 6 344 80 Licenciado 2013
and Taxation
(day)
IPSetubal Accounting 180 8 344 50 Licenciado 2013
and Taxation
(night)
IPTomar Accounting 180 6 344 25 Licenciado 1 year (2018)
IPViana Accounting 180 6 344 35 Licenciado 2013
Castelo and Taxation
IPViseu - Accounting 180 6 344 25 Licenciado 2013
ESTG and Auditing
Lamego
IPViseu - Accounting 180 6 344 40 Licenciado 2013
ESTG
Viseu
(continued)

Higher Degree ECTS Semesters CNAEF Places Level of Accreditation
education qualification of A3ES
institution
IPCA - Accounting 180 6 344 100 Licenciado 6 years
ESG (2018)
IPCA - Accounting 180 6 344 40 Licenciado 6 years
ESG and Taxation (2011)
IPPorto - Accounting 180 6 344 85 Licenciado 2013
ESESIG and
Management
IPPorto - Accounting 180 6 344 370 Licenciado 6 years
ISCAP and (2018)
Management
UAveiro - Accounting 180 6 344 120 Licenciado 6 years
ISCAA (2018)
Source DGES (2019)
The third question—Distribution of enrolled students by gender?—will be

analysed by degree and by Higher Education Institution.
The national distribution of enrolled students by gender in the school year of 2017/2018 is
based on the total of 171.968 students from all school years. The national distribution is 55%
for women and 45% for men
The fourth question—Percentage of recent graduates of this course who are regis-
tered in IEFP as unemployed—will be analysed by degree and by Higher Education
Institution.
The percentage of recent graduates of all the courses who are registered in IEFP as unem-
ployed or employability rate, all 5181 students who graduated in the course between the
2013/14 and 2017/18 school years were considered in relation to the 5 graduates who were
unemployed and registered in the IEFP in 2018, which has an employability rate of 96.6%.
The national analysis presents the distribution of 149.548 recently graduated students who
noted that this rate is lower than the national training area of 95.2% and national level of
96.8%.
The fifth question—Distribution of enrolled students by nationality—will be

analysed by degree and by Higher Education Institution.
The national average represents 90% of the total students are Portuguese and 10% of the
total students are foreigners and, also, included international mobility programmes.
The sixth question—Distribution of enrolled students by age—will be analysed

by degree and by Higher Education Institution.
The national distribution of enrolled students by age in the school year of 2017/2018 and
based on a total of 171.968 students from all school years. The biggest number (31.675)
has 20 years and the range changes from 22.665 students under 18 years and 7.708 students
above 40 years.
In the Instituto Politécnico da Guarda in the Accounting Degree, in the past school
year with available information (2017/2018), the main statistics for the degree show
a degree with strong international commitment.
Figure 15.1 presents the distribution of the 69 students and their options in which
students enrolled in the first year, for the first time, in the academic years 2016/17
and 2017/18, such as: 55.1% for other forms for higher education access; 18.8% for
the first option of the national competition for higher education access; 14.5% for
the other options or modalities for higher education access; 10.1% for the second
option of the national competition for higher education access; 1.4% for access to
older than 23 years.
Figure 15.2 presents the distribution of 67 students with 76.1% students who are
enrolled in the same course; 19.4% students were not found in the National Higher
Education (because they are working); 3% of the students are enrolled in another
course of the Instituto Politécnico da Guarda; 1.5% of the total students are enrolled
in a course of another Higher Education Institution.
Figure 15.3 presents the distribution of 109 enrolled students by gender. For one
side, the degree average is 60% for women and 40% for men. For the other side, the
national average is 55% for women and 45% for men
Figure 15.4 presents the percentage of recent graduates of this course who are
registered in IEFP as unemployed or unemployability rate, all 59 students who grad-
uated in the course between the 2013/14 and 2017/18 school years were considered
in relation to the 5 graduates who were unemployed and registered in the IEFP in
Fig. 15.1 IPG—Question 1—How the students entered on this course? Source DGEEC (2019)
Fig. 15.2 IPG—Question 2—Where are the students one year after starting this course? Source
DGEEC (2019)
Fig. 15.3 IPG—Question 3—Distribution of enrolled students by gender. Source DGEEC (2019)
Fig. 15.4 IPG—Question 4—Percentage of recent graduates of this course who are registered in
IEFP as unemployed. Source IEFP (2019), DGEEC (2019)
2018, which has an employability rate of 91.5%. It is further noted that this rate is
lower than the training area of 95.2% and national level of 96.8%.
Figure 15.5 presents the distribution of enrolled students by nationality based, on
the one hand, in the degree with a total of 109 students which represent that 71% of
the total students are Portuguese and 29% of the total students are foreigners. On the
other hand, the national average represents 89% of the total students are Portuguese
Fig. 15.5 IPG—Question 5—Distribution of enrolled students by nationality. Source DGEEC

(2019)
Fig. 15.6 IPG—Question 6—Distribution of enrolled students by age. Source DGEEC (2019)
and 11% of the total students are foreigners and, also, included international mobility
programmes.
Figure 15.6 presents the distribution of enrolled students by age in the school
year of 2017/2018 and based on a total of 109 students from all school years. The
biggest number is 20 years and the range changes from 8 students under 18 years
and 2 students above 40 years.
In the Instituto Politécnico da Bragança in the Accounting Degree, in the last
school year with available information (2017/2018), the main statistics for the degree
shows more stability.
students enrolled in the firsst year, for the first time, in the academic years 2016/17
and 2017/18, such as: 34.1% other forms for higher education access; 29.5% for the
other options or modalities for higher education access; 16.7% for the first option of
the national competition for higher education access; 16.7% for the second option of
the national competition for higher education access; 1.5% for access to older than
23 years; 1.5% for the change and transfer of the degree.
Figure 15.8 presents the distribution of the 123 students with 82.1% students are
Education (because they are working); 3.3% students are enrolled in another course
of the Instituto Politécnico de Bragança; 4.1% of the total students are enrolled in
a course of another Higher Education Institution and 1.6% of the total students are
graduates in this course.
Fig. 15.7 IPB—Question 1—How the students entered on this course? Source DGEEC (2019)
Fig. 15.8 IPB—Question 2—Where are the students one year after starting this course? Source
DGEEC (2019)
Fig. 15.9 IPB—Question 3—Distribution of enrolled students by gender. Source DGEEC (2019)
national average is 55% for women and 45% for men.
Figure 15.11 presents the distribution of enrolled students by nationality based,
on the one hand, in the degree with a total of 227 students which represents 82% of
Fig. 15.10 IPB—Question 4—Percentage of recent graduates of this course who are registered in
Fig. 15.11 IPB—Question 5—Distribution of enrolled students by nationality. Source DGEEC

(2019)
programmes.
In the Instituto Politécnico de Coimbra in the Accounting and Auditing Degree,
in the last school year with available information (2017/2018), the main statistics for
the degree shows more stability. This degree exists only in Coimbra and Oliveira do
Hospital.
Figure 15.13 presents the distribution of the 188 students and their options in
which students enrolled in the first year, for the first time, in the academic years
2016/17 and 2017/18, such as: 32.4% for the first option of the national competition
for higher education access; 26.6% for the second option of the national competition
for higher education access; 25% for the other options or modalities for higher
education access; 5.9% other forms for higher education access; 5.3% for the change
and transfer of the degree and 4.8% for access to older than 23 years.
Fig. 15.12 IPB—Question 6—Distribution of enrolled students by age. Source DGEEC (2019)
Fig. 15.13 IPC1—Question 1—How the students entered on this course? Source DGEEC (2019)
Figure 15.14 presents the distribution of the 199 students with 86.4% students
who are enrolled in the same course; 8% students were not found in the National
Higher Education (because they are working); 5% students are enrolled in another
course of the Instituto Politécnico de Coimbra; 0.5% of the total students are enrolled
in a course of another Higher Education Institution.
Fig. 15.14 IPC1—Question 2—Where are the students one year after starting this course? Source
DGEEC (2019)
Fig. 15.15 IPC1—Question 3—Distribution of enrolled students by gender

Fig. 15.16 IPC1—Question 4—Percentage of recent graduates of this course who are registered
in IEFP as unemployed. Source IEFP (2019), DGEEC (2019)
Fig. 15.17 IPC1—Question 5—Distribution of enrolled students by nationality. Source DGEEC

(2019)
2018, which has an employability rate of 96%. It is further noted that this rate is
programmes.
Figure 15.18 represents the distribution of enrolled students by age in the school
Fig. 15.18 IPC1—Question 6—Distribution of enrolled students by age. Source DGEEC (2019)
In the Instituto Politécnico de Coimbra in the Accounting and Public Management
Degree, in the last school year with available information (2017/2018), the main
statistics for the degree show more stability. This degree only exists in Coimbra.
2016/17 and 2017/18, such as: 38% for the other options or modalities for higher
education access; 30% for the second option of the national competition for higher
education access; 21% for the first option of the national competition for higher
education access; 5% other forms for higher education access; 4% for the change
and transfer of the degree and 2% for access to older than 23 years.
Figure 15.20 presents the distribution of the 94 students with 87.2% students who
are enrolled in the same course; 5.3% students were not found in the National Higher
of the Instituto Politécnico de Coimbra; 1.1% of the total students are enrolled in a
course of another Higher Education Institution.
registered in IEFP as unemployed or employability rate, all 99 students who graduated
in the course between the 2013/14 and 2017/18 school years were considered in
relation to the 8 graduates who were unemployed and registered in the IEFP in 2018,
Fig. 15.19 IPC2—Question 1—How the students entered on this course? Source DGEEC (2019)
Fig. 15.20 IPC2—Question 2—Where are the students one year after starting this course? Source
DGEEC (2019)
Fig. 15.21 IPC2—Question 3—Distribution of enrolled students by gender. Source DGEEC (2019)
Fig. 15.22 IPC2—Question 4—Percentage of recent graduates of this course who are registered
by which has an employability rate of 97.4%. It is further noted that this rate is lower
than the training area of 95.2% and national level of 96.8%.
on the one hand, in the degree with a total of 192 students which represent 96% of
programmes.
Fig. 15.23 IPC2—Question 5—Distribution of enrolled students by nationality. Source DGEEC

(2019)
Fig. 15.24 IPC2—Question 6—Distribution of enrolled students by age. Source DGEEC (2019)
In the Instituto Politécnico de Viseu in the Accounting Degree, in the past school
year with available information (2017/2018), the main statistics for the degree that
shows a strong national commitment.
and 2017/18, such as: 57.8% for the first option of the national competition for higher
education access; 18.9% for the second option of the national competition for higher
education access; 7.8% other forms for higher education access; 6.7% for the other
options or modalities for higher education access; 6.7% for access to older than
23 years; 2.2% for the change and transfer of the degree.
are enrolled in the same course; 9.5% students are enrolled in another course of the
Instituto Politécnico de Viseu; 7.1% students were not found in the National Higher
Education (because they are working); 4.8% of the total students are enrolled in a
course of another Higher Education Institution.
Fig. 15.25 IPV—Question 1—How the students entered on this course? Source DGEEC (2019)
Fig. 15.26 IPV—Question 2—Where are the students one year after starting this course? Source
DGEEC (2019)
Fig. 15.27 IPV—Question 3—Distribution of enrolled students by gender. Source DGEEC (2019)
which has an employability rate of 98.1%. It is further noted that this rate is lower
programmes.
Fig. 15.28 IPV—Question 4—Percentage of recent graduates of this course who are registered in
Fig. 15.29 IPV—Question 5—Distribution of enrolled students by nationality. Source DGEEC

(2019)
Fig. 15.30 IPV—Question 6—Distribution of enrolled students by age. Source DGEEC (2019)
In the Instituto Politécnico de Lisboa, at the Instituto Superior de Contabilidade e
Administração de Lisboa, it is teacher one of the third Accounting and Management
Degrees in Portugal. In the past school year with available information (2017/2018),
the main statistics for the degree that shows a national commitment.
Fig. 15.31 IPL—ISCAL—Question 1—How the students entered on this course? Source DGEEC
(2019)
Fig. 15.32 IPL—ISCAL—Question 2—Where are the students one year after starting this course?
Source DGEEC (2019)
second option of the national competition for higher education access; 19.5% for
the first option of the national competition for higher education access; 7.4% for the
other options or modalities for higher education access; 4.7% for the change and
transfer of the degree and 0.8% for access to older than 23 years.
enrolled in the same course; 13.7% of the total students are enrolled in a course of
another Higher Education Institution, 6.7% students were not found in the National
Higher Education (because they are working); 2.2% students are enrolled in another
course of the Instituto Politécnico de Lisboa.
2018, by which has an employability rate of 96.6%. It is further noted that this rate
is lower than the training area of 95.2% and national level of 96.8%.
Fig. 15.33 IPL—ISCAL—Question 3—Distribution of enrolled students by gender. Source

DGEEC (2019)
Fig. 15.34 IPL—ISCAL—Question 4—Percentage of recent graduates of this course who are
registered in IEFP as unemployed. Source IEFP (2019), DGEEC (2019)
Fig. 15.35 IPL—ISCAL—Question 5—Distribution of enrolled students by nationality. Source

DGEEC (2019)
programmes.
and 48 students upper 40 years.
Fig. 15.36 IPL—ISCAL—Question 6—Distribution of enrolled students by age. Source DGEEC

(2019)
Fig. 15.37 IPCB—Question 1—How the students entered on this course? Source DGEEC (2019)
In the Instituto Politécnico de Castelo Branco, in the Escola Superior de Gestão,

the only one learned in Portugal, the Accounting and Financial Management. In the
last school year with available information (2017/2018), this is the last statistics for
this degree, because it will close.
other options or modalities for higher education access; 13.2% for the first option
of the national competition for higher education access; 6% for access to older than
23 years; 4% for the second option of the national competition for higher education
access; 4% for the change and transfer of the degree.
who are enrolled in the same course; 21.2% students were not found in the National
Higher Education (because they are working); 9.1% students are enrolled in another
course of the Instituto Politécnico; 6.1% of the total students are enrolled in a course
of another Higher Education Institution.
Fig. 15.38 IPCB—Question 2—Where are the students one year after starting this course? Source
DGEEC (2019)
Fig. 15.39 IPCB—Question 3—Distribution of enrolled students by gender. Source DGEEC

(2019)
Fig. 15.40 IPCB—Question 4—Percentage of recent graduates of this course who are registered
on the one hand, in the degree with a total 70 students which represent 75% of the
total students are Portuguese and 25% of the total students are foreigners. On the
programmes.
Fig. 15.41 IPCB—Question 5—Distribution of enrolled students by nationality. Source DGEEC

(2019)
Fig. 15.42 IPCB—Question 6—Distribution of enrolled students by age. Source DGEEC (2019)
and 11 students above 40 years. This is one of the degrees with a high level of age
concentrated between 25 and 27 years until 40 years.
In the Instituto Politécnico do Cávado e do Ave, in the Escola Superior de Gestão,
is learned the Accounting (day schedule). In the past school year with available
information (2017/2018), this is the last statistics for this degree.
for higher education access; 29.7% other forms for higher education access; 15.3%
for the second option of the national competition for higher education access; 8.5%
for the other options or modalities for higher education access; 4.2% for access to
older than 23 years; 2.5% for the change and transfer of the degree.
Education (because they are working); 5.5% of the total students are enrolled in
another course of Higher Education Institution and 4.5% students are enrolled in
another course of the Instituto Politécnico.
Fig. 15.43 IPCA—Question 1—How the students entered on this course? Source IEFP (2019),
DGEEC (2019)
Fig. 15.44 IPCA—Question 2—Where are the students one year after starting this course? Source
IEFP (2019), DGEEC (2019)
Fig. 15.45 IPCA—Question 3—Distribution of enrolled students by gender. Source DGEEC

(2019)
registered in IEFP as unemployed or employability rate, all 261 students who grad-
Fig. 15.46 IPCA—Question 4—Percentage of recent graduates of this course who are registered
Fig. 15.47 IPCA—Question 5—Distribution of enrolled students by nationality
programmes.
and 4 students above 40 years. This is one of the degrees with a high level of young
students concentrate between 18 and 22 years.
In the Instituto Politécnico de Setubal, in the Escola Superior de Ciências Empre-
sariais, it is learned the Accounting and Finance (day schedule). In the past school
year with available information (2017/2018), this is the last statistics for this degree.
Fig. 15.48 IPCA—Question 6—Distribution of enrolled students by age. Source DGEEC (2019)
Fig. 15.49 IPS—Question 1—How the students entered on this course? Source DGEEC (2019)
for higher education access; 30.4% for the other options or modalities for higher
education access; 6.5% for access to older than 23 years; 6.5% for the second option
of the national competition for higher education access; 4.2% other forms for higher
education access; 3.6% for the change and transfer of the degree.
Education (because they are working); 4% of the total students are enrolled in a
course of another Higher Education Institution and 1.7% students are enrolled in
another course of the Instituto Politécnico.
lower than the training area of 95.2% and the national level of 96.8%.
Fig. 15.50 IPS—Question 2—Where are the students one year after starting this course? Source
DGEEC (2019)
Fig. 15.51 IPS—Question 3—Distribution of enrolled students by gender. Source DGEEC (2019)
Fig. 15.52 IPS—Question 4—Percentage of recent graduates of this course who are registered in
Fig. 15.53 IPS—Question 5—Distribution of enrolled students by nationality. Source DGEEC

(2019)

programmes.
Fig. 15.54 IPS—Question 6—Distribution of enrolled students by age. Source DGEEC (2019)
Fig. 15.55 IPT—Question 1—How the students entered on this course? Source DGEEC (2019)
In the Instituto Politécnico de Tomar in the Accounting Degree, in the last school
year with available information (2017/2018), the main statistics for the degree shows
a degree with a strong commitment to graduates during the life of work.
students enrolled in the first year, for the fist time, in the academic years 2016/17
first option of the national competition for higher education access; 16.7% for the
second option of the national competition for higher education access; 16.7% for the
change and transfer of the degree; 12.5% for access to older than 23 years; and 8.3%
for the other options or modalities for higher education access.
Figure 15.56 presents the distribution of the 25 students with 72% students are
enrolled in the same course; 12% students were not found in the National Higher
Education (because they are working); 8% students are enrolled in another course of
the Instituto Politécnico; 8% of the total students are enrolled in a course of another
Higher Education Institution.
Fig. 15.56 IPT—Question 2—Where are the students one year after starting this course? Source
DGEEC (2019)
Fig. 15.57 IPT—Question 3—Distribution of enrolled students by gender. Source DGEEC (2019)
Fig. 15.58 IPT—Question 4—Percentage of recent graduates of this course who are registered in
programmes.
Fig. 15.59 IPT—Question 5—Distribution of enrolled students by nationality. Source DGEEC

(2019)
Fig. 15.60 IPT—Question 6—Distribution of enrolled students by age. Source DGEEC (2019)
Fig. 15.61 IPSANT—Question 1—How the students entered on this course? Source DGEEC
(2019)
biggest number is 20 years and the range changes from 1 student under 18 years
and 4 students above 40 years. Also, this degree has a long range of age of enrolled
students.
In the Instituto Politécnico de Santarém, in the Escola Superior de Gestão e
Tecnologia, it is learned the Accounting and taxation (day schedule). In the past
school year with available information (2017/2018), this is the last statistics for this
degree. This degree also is learned in Viana de Castelo.
and 2017/18, such as: 33.8% for the other options or modalities for higher education
access; 27.3% for the first option of the national competition for higher education
access; 27.3% for the second option of the national competition for higher education
access; 7.8% other forms for higher education access; 2.6% for the change and
transfer of the degree and 1.3% for access to older than 23 years;
Figure 15.62 presents the distribution of the 60 students with 80% students who
are enrolled in the same course; 8.3% students were not found in the National Higher
of the Instituto Politécnico; 5% of the total students are enrolled in a course of another
Higher Education Institution.
Fig. 15.62 IPSANT—Question 2—Where are the students one year after starting this course?
Source DGEEC (2019)
Fig. 15.63 IPSANT—Question 3—Distribution of enrolled students by gender. Source DGEEC

(2019)
Fig. 15.64 IPSANT—Question 4—Percentage of recent graduates of this course who are registered
Fig. 15.65 IPSANT—Question 5—Distribution of enrolled students by nationality. Source

DGEEC (2019)
Fig. 15.66 IPSANT—Question 6—Distribution of enrolled students by age. Source DGEEC

(2019)
programmes.
biggest number is 20 years and the range change from 10 students under 18 years
and 5 students upper 40 years.
In the Instituto Politécnico do Porto, in the Instituto Superior de Contabilidade e
Administração do Porto, it is teached the Accounting and Management Degree (day
schedule). In the past school year with available information (2017/2018), the main
statistics for the degree shows a national commitment.
education access; 10.5% for the change and transfer of the degree; 1.8% other forms
for higher education access; 0.8% for access to older than 23 years.
Figure 15.68 presents the distribution of the 562 students with 74% students who
are enrolled in the same course; 11% of the total students are enrolled in a course of
another Higher Education Institution; 8% students are enrolled in another course of
Fig. 15.67 IPP—ISCAP—Question 1—How the students entered on this course? Source DGEEC
(2019)
Fig. 15.68 IPP—ISCAP—Question 2—Where are the students one year after starting this course?
Source DGEEC (2019)
the Instituto Politécnico; and 6.9% students were not found in the National Higher
Education (because they are working).
Figure 15.69 presents the distribution of 1004 enrolled students by gender. For
one side, the degree average is 57% for women and 43% for men. For the other side,
the national average is 55% for women and 45% for men.
2018, hich has an employability rate of 95.9%. It is further noted that this rate is
Fig. 15.69 IPP—ISCAP—Question 3—Distribution of enrolled students by gender. Source

DGEEC (2019)
Fig. 15.70 IPP—ISCAP—Question 4—Percentage of recent graduates of this course who are
Fig. 15.71 IPP—ISCAP—Question 5—Distribution of enrolled students by nationality. Source

DGEEC (2019)

programmes.
Fig. 15.72 IPP—ISCAP—Question 6—Distribution of enrolled students by age. Source DGEEC

(2019)
Fig. 15.73 UA—ISCAA—Question 1—How the students entered on this course? Source DGEEC
(2019)
and 12 students above 40 years. This degree has a big concentration from 18 to
22 years.
In the Universidade de Aveiro, in the Instituto Superior de Contabilidade e Admin-
istração de Aveiro, it is teached the Accounting Degree (day schedule). In the past
school year with available information (2017/2018), the main statistics for the degree
shows a national commitment.
education access; 8.6% other forms for higher education access; 4.3% for the change
and transfer of the degree and 1.2% for access to older than 23 years.
who are enrolled in the same course; 6.2% students were not found in the National
Higher Education (because they are working); 6.2% of the total students are enrolled
in a course of another Higher Education Institution and 2.1% students are enrolled
in another course of the Instituto Politécnico.
Fig. 15.74 UA—ISCAA—Question 2—Where are the students one year after starting this course?
Source DGEEC (2019)
Fig. 15.75 UA—ISCAA—Question 3—Distribution of enrolled students by gender. Source

DGEEC (2019)
Fig. 15.76 UA—ISCAA—Question 4—Percentage of recent graduates of this course who are
2018, by which has an employability rate of 94.6%. It is further noted that this rate
is lower than the training area of 95.2% and national level of 96.8%.
programmes.
Fig. 15.77 UA—ISCAA—Question 5—Distribution of enrolled students by nationality. Source

DGEEC (2019)
Fig. 15.78 UA—ISCAA—Question 6—Distribution of enrolled students by age. Source DGEEC

(2019)
biggest number is 20 years and the range changes from 53 students under 18 years and
6 students above 40 years. This degree has a big concentration from 18 to 20 years.
In the Instituto Politécnico de Leiria, in the Escola Superior de Tecnologia e
Gestão, it is teached the Accounting and Finance (day schedule). In the past school
year with available information (2017/2018), this is the last statistics for this degree.
and 2017/18, such as: 40% for the first option of the national competition for higher
education access; 16.5% other forms for higher education access; 14.1% for the
other options or modalities for higher education access; 2.4% for access to older
than 23 years; 2.4% for the change and transfer of the degree.
are enrolled in the same course; 10.8% students are enrolled in another course of
the Instituto Politécnico; 6% of the total students are enrolled in a course of another
Higher Education Institution and 3.6% students were not found in the National Higher
Education (because they are working).
Fig. 15.79 IP Leiria—Question 1—How the students entered on this course? Source DGEEC
(2019)
Fig. 15.80 IP Leiria—Question 2—Where are the students one year after starting this course?
Source DGEEC (2019)
Fig. 15.81 IP Leiria—Question 3—Distribution of enrolled students by gender. Source DGEEC

(2019)
Fig. 15.82 IP Leiria—Question 4—Percentage of recent graduates of this course who are registered
Fig. 15.83 IP Leiria—Question 5—Distribution of enrolled students by nationality. Source

DGEEC (2019)
programmes.
and 1 student from 31 to 39 years.
All these examples allow to prove that a resilient higher education institution can
absorb shocks, such as: strong reduction of Portuguese students and then change to
increase in foreign students, rather than getting disappointed with the system that
promotes the HEI near the sea. The strong and fast disclosure of information, such as:
employment rate of graduates is an important information that could have affected
them, including their families, thus the higher education institutions must share.
The last perspective of this research is the adoption of the Decree-Law nº 62/2018,
published on 6 August (PCM, 2018), of the International Student Status Law,
which is a very important tool to enrol students to the Portuguese higher educa-
tion system. Indeed, the Portuguese Higher Education Institutions had host students
from conflicting countries, especially for their cooperation over the past few years
with the Global Platform for Syrian Student Emergency Assistance.
Furthermore, Portugal has a Higher Education System with two different
focus: Science based on Universities and Professional Science based on Institutos
Fig. 15.84 IP Leiria—Question 6—Distribution of enrolled students by age. Source DGEEC

(2019)
Politécnicos. Thus, the international student’s entrance in the Higher Education

System, where they need to pay the real cost of education and the degree, estab-
lished on their expectations of success and employability of the degree. To be honest,
the less value-add of the degree is being graduate and the higher value-add is low
unemployment rate.
15.4 Conclusion
The education and training on the accounting degree have remained the central input
of this research that focuses on the accounting and reality. Furthermore, the access to
these data are unilateral and present a positive balance, because it does not damage
the economy due to the increase of the use of external data to carry out to the
report to the National Tax Agency or Stock Markets. Indeed, this demand for the
accounting degree produces more knowledge sharing between accounting students
and accountants professional.
The first opportunity of the accounting degree in Portugal is to answer to organiza-
tion’s demand of workers in the accounting area. These graduates are more focused
on training and their education is at international level, because it prepares them to
answer to markets. The stakeholders recognize the trade-off between the accounting
information system and the dynamic of markets that it is greater and faster than in the
past. So, the challenge is increasing the relation of the accounting information with
the technology and communication systems that generate big data which is relevant
each day for organizations, governments, and national authorities, to improve the
well-being of the citizen.
The second opportunity of the accounting degree in Portugal is the future itself,
because the strong combination of different sources, pilot projects and statistics allow
to produce innovative systems useful to organizations all over the world. The chal-
lenge is producing a powerful accounting information system that demands concepts,
definitions and standards that are more flexible with the reality of markets. The reuse
of the accounting information to plenty of sources generates more transparency and
guarantee for the future of the accounting degree.
The third opportunity of the accounting degree in Portugal, in general, and in the
Instituto Politécnico da Guarda, in particular, is the answer to employers’ need for
skills and knowledge. The fundamental question of the curriculum in the accounting
area is preparing students for the real world, putting emphasis on the professional
science based. So, the challenge of this degree to many students is giving the capa-
bility of the learnability to answer the substantial activities of the tasks on the
organization.
References
Ansoff, H. I. (1965, September). The firm of the future. Harvard Business Review.
Assembleia da República (AR). (1986, October 14). Basic law of the educational system. Diário
da República, 237, I Série.
Bakker, R. (2013, March). Accountants will save the world. Harvard Business Review.
DGEEC. (2019). Estatísticas do Ensino Superior. Lisboa: DGEEC.
Direção Geral do Ensino Superior (DGES). (2019). Estatísticas do Ensino Superior. Lisboa: DGES.
El-Jardali, F., Ataya, N., & Fadlallah, R. (2018). Changing roles of universities in the era of SDGs:
Rising up to the global challenge through institutionalising partnerships with governments and
communities. Health Research Policy and Systems, 16(38).
IEFP. (2019). Statistical information system. Lisboa: IEFP.
Pordata. (2019). Statistical information system. Lisboa: FFMS.
Presidência Conselho Ministros (PCM). (2018, August 6). Decree-Law nº 62/2018, amends and
republishes the International Student Statute, published by Decree-Law No. 36/2014, of 10 March
and amended by Decree-Law No. 113/2014, of July 16. Diário da República, 150, I Série.
United Nations Conference on Sustainable Development (UNCSD). (2012). Education for
sustainable development. New York: UN.
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future we want: UN decade of education for sustainable development (2005–2014) final report.
Paris: United Nations Educational, Scientific and Cultural Organization.

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Approaches to Global Sustainability, Markets, and Governance

Series Editors: David Crowther · Shahla Seifi

More information about this series at http://www.springer.com/series/15778

CSR and Sustainability

ISSN 2520-8772 ISSN 2520-8780 (electronic)

1 The Developing Public Sector Perspective . . . . . . . . . . . . . . . . . . . . 1

Part I Social Responsibility in the Public Sector

Part II Developing Sustainability in the Public Sector

8 Emerging Trends on Sustainability/Integrated Reporting:

Part III The Role of the University

Rute Abreu Instituto Politécnico da Guarda/UDI-IPG/CICF-IPCA/CISeD-IPV,

Fued Abrão Junior Brazilian Airport Infrastructure Company (Infraero), Brasília,

Christos Tsatsis Centre de Comptabilité et Contrôle, Universite Libre de

Shahla Seifi and David Crowther

Keywords Sustainable development · Brundtland · Environment · Standards ·

Although the generally accepted term is Corporate Social Responsibility, it is widely

1.2 The Brundtland Report and After

It was in 1983 when the World Commission on Environment and Development

Section II: resource management and conservation

Section III: empowerment of principal groups

Section IV: implementing tools

4 22nd April 2016.

1.3 Impacts and Implications of Environmental Issues

1.4 Manufacturing and the External Environment

will be required. Although it might happen in a distant future, however, what is of

1.5 Standardising and Production

might not be to the benefit of individuals to follow social responsibility voluntarily

1.6 Critiquing Sustainability

There is an almost undisputed assumption that growth is still possible (Elliott,

Spangenberg, J. H. (2004). Reconciling sustainability and growth: Criteria, indicators, policy.

Fabiana Roberto, Roberto Maglio, and Andrea Rey

Keywords Sustainability reporting · Public sector · Content analysis ·

Sustainable development is essentially the recognition that that global risks of

F. Roberto (B) · R. Maglio · A. Rey

on what a group of Italian municipalities reports in their stand-alone sustainability

2.2 Literature Review and Theoretical Framework

2.3 Research Method

There is no consensus on what SR means, nor a common shared framework (Biondi

Table 2.1 The coding instrument for SR in the public sector

Table 2.1 (continued)

Table 2.2 Length and framework followed for SR

Table 2.3 Total SR disclosure by all items

Table 2.4 Type of information disclosed

Fátima David, Lúcia Marques, and Rute Abreu

Keywords Non-profit institutions · Tax system · Social responsibility · Portugal

F. David (B) · L. Marques · R. Abreu

Although the Non-Profit Institutions (NPI or, in Portuguese, ESNL), in general,

3.2 The Framework of NPI in Civil Society

Under Article 2 (1) of the Cooperative Code, approved by Law 51/96, of

In addition, pursuant to Article 61 (2) of the Portuguese Constitution (PC or, in

and free membership; democratic management by members; economic participa-

In this sense, the foundations are:

Table 3.1 PISS typologies

3.3 The Historical Context of the Piss

Table 3.2 Historical evolution of PISS statutes/regulations

Source Prepared by authors

It also refers, in the same paragraph 1 (MAS, 1983: 643), that:

This is reasonable since, paragraph 1 of the same Decree-Law (MFPTSS, 1985:

Later, the Decree-Law 402/85, of October 11 (MTSS, 1985b: 3359), proceeded

That is, as referred to in Article 7 (2) as:

The following year, the Decree-Law 29/86, of February 19 (MTSS, 1986),

After almost 30 years, the Decree-Law 172-A/2014, of November 14 (MSESS,

of November 14 (MSESS, 2014), revisited the definition of PISS, highlighting the