by Linyue Zhang
ABSTRACT
The rapid global proliferation of Environmental, Social, and Governance (ESG) metrics has transformed corporate accountability mechanisms, positioning accounting practices as central instruments of epistemic governance. This study advances the concept of “epistemic governance” to demonstrate how ESG metrics institutionalize financialized sustainability logics through accounting classifications, measurement protocols, and verification rituals. The research employs historical institutionalism and critical discourse analysis to trace three phases of ESG metric development from the 1970s to the present. Through archival research and comparative case studies of major standard-setting bodies, the study reveals how accounting classifications, measurement protocols, and verification rituals institutionalize particular governance logics while marginalizing alternative sustainability epistemologies. Key findings demonstrate that ESG metrics increasingly serve financialization agendas, with climate accounting standards exemplifying tensions between technical neutrality and political contestation. Theoretically, this work advances the concept of “epistemic governance” to analyze how calculative practices construct governable realities. Practically, it highlights democratic deficits in transnational sustainability governance, where unelected technical bodies wield disproportionate influence over disclosure regimes. The study contributes to accounting sociology by exposing the political dimensions of measurement objectivity and offers policy insights for more inclusive standard setting processes.
