The scale and speed of the Covid 19 disaster must force us to rethink our societies. As after every disruptive event, our social fundamentals, our value systems and our production methods are being profoundly questioned. Today, this health crisis must convince us that another world is possible and that it must be more ecological, more democratic and more united.
We note that current accounting is blind to the destruction of the natural and social capitals that make up our living conditions or common goods (health, water, soil, air, etc.). To maintain the habitability of the earth - which is non-negotiable - and the resilience of the "wealth factors" that are living ecosystems, we need a new accounting framework.
Global and biological limits force us to confront the causes of the destruction of resources and living conditions and to provide concrete and operational solutions. Why do our human activities end up mortgaging the habitability of the Earth? The economy is built on a set of accounting conventions whose definition and negotiation remain the prerogative of small groups of experts, far removed from public debate. Yet these define the categories, concepts and valuation methods by which we view the world and represent the values that our society seeks to create. Yet the common goods (air, water, soil, biodiversity) and living environments are not taken into account in our accounts! If a company deteriorates an ecosystem, a forest or a river, or if it participates in their regeneration, nothing will make a difference in the balance sheet. Everything happens as if the supports for our survival were neglected, excluded from the information systems responsible for providing information on human activities.
The aim is to integrate into the accounts of organizations the depreciation of living environments and human communities used or degraded to produce.
This accounting evolution is necessary for companies to truly "take into account" the socio-environmental dimensions of their production. It must be articulated with traditional accounting in a three-fold logic bottom line (John Elkington). Thus the last line (bottom line) viewed by shareholders would no longer be only that of the economic outturn account but also those of the environmental and social outturn accounts.
This new framework is capable of reviewing the notions of performance (no financial performance without ecological and social performance), externalities (considering the costs of maintaining living environments as debts, integrated into expenses), and raison d'être (valuing the company's contributions to the maintenance of common goods).
This framework, on which a number of European organisations are working (in the context of the Green Deal, green taxonomy, etc.) and also French organisations (ANC, AMF, the 10% network for change, the Chair in Ecological Accounting, the Alliance ComptaRegeneration2020 , etc.), has become a structuring change. It requires tax changes, a reconsideration of the extra-financial sector and relevant, standardised and reliable indicators.
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This work is essential to put the economy back under political and social constraint, considering the reality of our activities still dependent on the biosphere, as evidenced by the effect of a simple virus.
It restores coherence in the governance of organizations, which are now able to perceive the risks of destruction of their own resources. As a result, and this is relevant in the current context of health crisis, many relocations will prove unprofitable.
Source: Contribution to the Next Day Forumonline, by 50 parliamentarians on April 4