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Article
Publication date: 5 February 2020

Jeremy Andrew Nicholls

The purpose of this paper is to propose a public policy solution to updating mainstream financial accounting from its nineteenth century roots and make it more relevant…

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Abstract

Purpose

The purpose of this paper is to propose a public policy solution to updating mainstream financial accounting from its nineteenth century roots and make it more relevant and consistent with public policy, individual investor motivations and global needs as exemplified in the sustainability development goals. Many approaches to integrating social and environmental accounts with financial accounts are additive; the two types of accounting information sit alongside each other. The opportunity to revise the basic building block of financial accounting, information to help investors make economic decisions relating to investments to increase integration and recognition that this is a public policy decision and not an accounting profession decision, is rarely considered.

Design/methodology/approach

The approach is a viewpoint on the opportunities for and benefits of integration of financial, social and environmental accounting.

Findings

The current basis of financial accounting does not reflect private investors’ motivations, and changing the basis of accounting is a public policy issue.

Research limitations/implications

This is a viewpoint paper. The pros and cons of current approaches to valuation of social and environmental outcomes are not explored.

Practical implications

Changing policy would require support from asset managers and owners, accounting bodies, civil society and politicians and would need a plan for transitioning from the existing approach.

Social implications

This is a possible starting point for formal research that could support policy changes that could result in resource allocation decisions taking account of social and environmental impacts.

Originality/value

There are several approaches for integrating social environmental and financial accounting; however, the proposal that integration would result from a change in public policy specifically clarifying and updating investor motivation provides a possible solution to many of the challenges of integration.

Details

Sustainability Accounting, Management and Policy Journal, vol. 11 no. 4
Type: Research Article
ISSN: 2040-8021

Keywords

Book part
Publication date: 8 January 2021

Victoria Hurth

This chapter is about helping you provide a solid platform for your organisation to engage with impact, by shining a light on what sits behind the decisions you make. This…

Abstract

This chapter is about helping you provide a solid platform for your organisation to engage with impact, by shining a light on what sits behind the decisions you make. This chapter will firstly set out why focussing on societal impact, whilst historically relevant, is really not a natural thing for today's organisations – in a sense, it goes against everything we have told ourselves about business for the past number of decades. At the same time, uniting the energy of an organisation to drive positive wellbeing impact is where the heart of the current revolution to address our multifaceted sustainability crises lies. It is a challenge we must rise to.

Many useful frameworks of sustainability/corporate responsibility maturity exist that can help us think about impact (e.g., Schaltegger, Hansen, & Lüdeke-Freund, 2015; Baumgartner & Ebner, 2010; Ainsbury & Grayson, 2014). This chapter extends this by delving deeper into the underlying economic mental models that structure existing organisational decision-making logics regarding impact. It outlines three archetypes of impact logic and the level of impact you would expect to be able to achieve if you operate from each one. All three sit within a ‘capitalist’ approach. Two of them are tightly bounded with neo-classical economic assumptions that have dominated business, the third marks a seismic break with these assumptions. In clarifying these archetypes, this chapter sets a trajectory that leaders can follow if they want to move towards delivering greater impact. The leadership lesson is that when it comes to delivering impact, if you want to go far, you have to go deep.

Business enterprises…are organs of society. They do not exist for their own sake, but to fulfil a specific social purpose and to satisfy a specific need of a society, a community or individuals.

Drucker (1974, p. 39).

Business enterprises…are organs of society. They do not exist for their own sake, but to fulfil a specific social purpose and to satisfy a specific need of a society, a community or individuals.

Details

Generation Impact
Type: Book
ISBN: 978-1-78973-929-9

Keywords

Abstract

Details

Generation Impact
Type: Book
ISBN: 978-1-78973-929-9

Abstract

Details

Generation Impact
Type: Book
ISBN: 978-1-78973-929-9

Content available
Book part
Publication date: 8 January 2021

Abstract

Details

Generation Impact
Type: Book
ISBN: 978-1-78973-929-9

Book part
Publication date: 8 January 2021

T. Robert Zochowski

To catalyse the impact economy, we need a common language which unites the various disciplines covered by the universe of impact investing, including environmental…

Abstract

To catalyse the impact economy, we need a common language which unites the various disciplines covered by the universe of impact investing, including environmental science, sociology, anthropology, human capital, childhood education and development, workforce development, criminal justice, diversity equity and inclusion and more and which translates those into monetary estimates to enable decision-making, and to catalyse more sustainable and just outcomes. Impact accounting seeks to do just that by uniting the statements of an organisation's financial health and performance with monetised impact accounts that reflect the organisation's positive and negative impacts on employees, customers, the environment and the broader society. This chapter provides an argument for impact accounting, an implementation roadmap, and grapples with principles and ethics-based challenges for impact accounting.

Collectively, we can use impact accounting to demand accountability from the businesses from which we purchase or of which we are equity owners, either through from investment managers and our retirement accounts. We must demand that they start showing the impact-weighted earnings of their profits or the ‘true’ price of the product they produce.

Book part
Publication date: 8 January 2021

Ben Carpenter, Catherine Manning and Adrian Henriques

Assurance and audit are a necessary part of the ecosystem for financial accounting and performance management. We may take it for granted but the role of assurance and…

Abstract

Assurance and audit are a necessary part of the ecosystem for financial accounting and performance management. We may take it for granted but the role of assurance and audit is crucial in supporting decision-making and enabling the global economy to function. However, if we want the global economy to make decisions differently, so that social and environmental value are factored into decision-making alongside financial value, then we need the same level of scrutiny and confidence in this information as well.

This chapter first outlines a short history and purpose of assurance exploring how important it is for building trust and credibility in information that is used for decision-making. It then explores accountability and how assurance doesn't play as big a role as it should in (social and environmental) impact accounting. Crucially, raising the issue that most people who experience the social and environmental impacts do not have the mechanisms to hold an organisation to account for this impact. This is creating an accountability gap and is leading to increased inequality.

This chapter then briefly outlines the current state of impact assurance including reference to key legislation and frameworks that do exist. This chapter concludes with some recommendations on how the demand for assurance of nonfinancial value can be increased and how it can be improved in terms of accuracy, completeness and most importantly so that it is being provided on behalf of the people (with little or no power) who experience the impacts.

Details

Generation Impact
Type: Book
ISBN: 978-1-78973-929-9

Keywords

Book part
Publication date: 8 January 2021

Chien-wen Shen and Agnieszka Koziel

This chapter provides an overview of the social policy development and assessment in East Asia. Our study shows that social policy assessment in this region is still…

Abstract

This chapter provides an overview of the social policy development and assessment in East Asia. Our study shows that social policy assessment in this region is still relying on objective indicators and interviews, even though most of the regional governments have implemented the Regulatory Impact Assessment for improving regulation quality. General approaches to measuring social value such as Cost–Benefit Analysis, Cost-Effectiveness Analysis and Social Return on Investment are not commonly used in the formulation of social policies. We compare the features of these approaches and provide suggestions about how to embed social value assessment tools into social policy and strategy development process.

Details

Generation Impact
Type: Book
ISBN: 978-1-78973-929-9

Keywords

Article
Publication date: 1 February 1980

Peter Nichols and Jeremy Sergeant

This paper describes the development of an on‐line bibliographic retrieval service, InfoLine, during a period of rapid growth of availability of data transmission…

Abstract

This paper describes the development of an on‐line bibliographic retrieval service, InfoLine, during a period of rapid growth of availability of data transmission networks. Special reference is made to EURONET.

Details

Program, vol. 14 no. 2
Type: Research Article
ISSN: 0033-0337

Book part
Publication date: 8 January 2021

Karen E. Wilson

As social, environmental and economic challenges grow across the world, the imperative for managing, measuring and maximising impact has never been greater. With growing…

Abstract

As social, environmental and economic challenges grow across the world, the imperative for managing, measuring and maximising impact has never been greater. With growing evidence of increasing inequality and climate change there is a critical need to adjust economic growth models to embrace inclusiveness and sustainability. Companies and institutional investors are recognising that social and environmental factors can influence a company's bottom line in both positive and negative ways, and therefore are important elements in business, markets and competition. However, to address the growing environmental and societal challenges as well as make progress on the Sustainable Development Goals (SDGs), more focus is needed on actions and investments that seek measurable positive impact that result in increased well-being of stakeholders. A plethora of new frameworks and tools has been developed to measure societal and environmental factors. To date, these efforts have served as complements to existing economic models. For public and private actors to be able to make more effective resource allocation decisions, these broader sets of measures need to be integrated into existing accounting and economic models. Over the past several years, there has been growing momentum for action. There has also been a recognition that no organisation or sector can tackle these challenges alone. Business, government and civil society need to collaborate to take action that can have the urgently needed impact at scale.

Details

Generation Impact
Type: Book
ISBN: 978-1-78973-929-9

Keywords

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