ecological transition
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No ecological transition without an accounting transformation!

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On the initiative of the F-M deputies. Lambert and Mr. Laqhila, a symposium is being held on February 7 to the National Assembly to question how "Accounting can serve environmental and social transition". The political and democratic stakes are enormous because accounting is the fundamental language of organizations. Today, however, living things are off the radar: ecological and social contributions to production are counted while neglecting their maintenance costs and the responsibilities they imply. To guarantee socio-environmental resilience, new frameworks and new representations are needed. This "common cause" is central to the transition and urgently needs to be debated.
 
Alobal and biological limits oblige 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.
 

Debating accounting policies and standards

In their report submitted to the government in March 2018 to guide the Pacte Act (which reforms the company), Nicole Notat and Jean-Dominique Senard (2) talk about an "unfaithful image" given to our companies by accounting systems. In their tenth recommendation, they call for "a concerted study of the conditions that accounting standards must meet in order to serve the public interest and the consideration of social and environmental issues".
The course is clear: companies must take account of reality, and according to a principle of general interest. Without this change, we are acting on the margins: CSR, responsible investment, sustainable finance, "integrated reporting" ... remain cosmetic changes.
 
Responding to this urgency requires us to identify gaps or anomalies in our accounting systems that keep us blind to the destruction of resources. A precautionary approach par excellence, this necessity brings to light the need to account for the ecological and human effects of our actions (which we call externalities, as if there were a garbage can system outside our planet). Faced with the urgency of living things, accounting is called upon to reexamine our conventions, our calculations and the relevance of the "substitutable" or "compensable". It must pay attention to the analysis of the relationships between organizations and living environments and propose concrete solutions for this "co-management" of the world. In this, it can serve as a test of coherence, and finally of truth, between our acts, our representations and our speeches.

A new grammar to integrate ecological performance

The maintenance of living conditions is based on a web of interlocking and interdependent living beings. This is why it is absurd to continue to consider living resources as "dead things" (cose morte (3)The fact that these assets are not recorded on the assets side of the balance sheet) without precaution, betrays a status of means available at will. This "utilitarian" point of view, which is still very dominant, is deeply rooted in conventional accounting standards and tools and even in most current extra-financial accounting models (such as Integrated Reporting or IR (4), removes the possibility of treating living organisms as partners or entities with which we co-evolve and puts the environment outside of us. It appears obsolete today, insofar as it maintains a fiction at the heart... of its own practices!
Accounting is a major technology, with its language and grammar. In fact, it is not neutral. Its frameworks, concepts and practices are based on voluntary or forced choices. It constructs a meaning to our actions and it draws, in particular, this crucial notion of performance which intends to give shared reference points as to the finality of our actions. Moreover, we often forget that accounting is also a form of international law that is applied, operational and enforceable against economic actors as a whole. Dreadful power, therefore, that we must question ...
The accounting world can be expected to provide a specific basis of information that can shed light on the concepts of environmental, societal or extra-financial performance of organisations. It could also, from a financial point of view, mobilise analyses to provide information on the diversity of possible performances when these are linked to a multiplicity of points of view, interests and representations of different stakeholders (shareholders, unions, etc.). Finally, today, if it is indeed the analysis of financial performance that gives meaning to financial accounting, the very interpretation of this analysis is not neutral: for if one
wanted to remember that the most important aspect of financial performance was solvency (repaying debts), well before profitability, so, in the future, could we base an accounting system integrating living beings on the notion of solvency, which guarantees the integrity or resilience of living beings.
But in order to make the resilience of living beings a full and complete performance, we still need an accounting system capable of talking about it?
 

Tools are emerging to account for living things

The search for new frameworks to integrate ecosystem uses and impacts has led to the development of the so-called extra-financial and its indicators (notably eco-efficiency) based on performance that remains "above ground". Although they represent real progress, these technical guidelines do not have the scope of new accounting models such as the CARE (Comprehensive Accounting in Respect of Ecology) method. (5), which aims to place the cost of preserving natural and human capital in financial accounts, and thus at the heart of corporate governance, on an equal footing with financial capital. It is currently being tested by various organisations, whether they are social and solidarity economy enterprises (as in the case of the "Fermes d'Avenir" network, whose accounting advocacy is based on CARE's principles) or multinational enterprises (mobilised, for example, in a collective operation in the PACA region, for example). (6), in partnership with public partners, such as ADEME, private partners, such as the firm "Compta Durable" or academic partners.
 
On 16 October, the BioRESP Forum - led by TEK4life and held at the French Academy of Agriculture - highlighted issues of public interest that directly challenge the political authorities. The Minister Bruno Le Maire has just asked the French Accounting Standards Authority (ANC) to produce proposals for accounting reforms that take into account the socio-environmental dimensions.
In this way, France could show the way for a far-reaching reform. The principle of defending the general interest continues to equip its historical culture, as shown by numerous initiatives in this direction. The opportunity provided by the forthcoming amendment of our Basic Law must be seized through the constitutional promotion of values of collective commitment to work towards the preservation of living things in order to guarantee the habitability of the Earth. The door would then be open to the modification of accounting and environmental law and to the promotion of other forms of accounting frameworks that would, in particular, stem the obreptitious dynamic of the groundswell of Integrated Reporting (IR).

Political and relational scope

Finally, we are faced with a geopolitical problem of the first order, that of whether or not to retain our sovereignty over the meaning that our national and European communities intend to give to their socio-economic actions. "Europe has already agreed to cede its sovereignty over financial accounting to the IASB (7), and there is clearly an attempt to do the same for extra-financial reporting (through RI). Europe must clearly react! » said Mr Patrick de Cambourg at the BioRESP Forum on 16 October 2018. (8). And to add that "Taking the risk of such a reaction could pay off economically in the long run. Indeed, we understand that the development of properly framed accounting systems, capable of representing and maintaining life in all its complexity, will lead to real competitive advantages!
Because, in the end, and the example of initiatives such as "C'est qui le patron" shows it, it is by being demanding, and at the same time, transparent on the framing, that it becomes possible not only to renew economic attractiveness, but perhaps and above all to give meaning to economic activities. This initiative proves that, if we no longer take human beings for mere passive economic agents, inclined to seek only their pure personal benefit, and if we generate a dialogue, via accounting - which has been used for this purpose since the dawn of time and not just to satisfy shareholders - we create the basis for a new relationship between consumers and companies conducive to solid value creation(s).                             
 
Alexandre Rambaud(AgroParisTech, CIRED1, Université Paris-Dauphine), Dorothée Browaeys
(President of TEK4life), Jean-Paul Karsenty (Forum BioRESP, CETCOPRA, University of Paris1), Clément Feger (AgroParisTech, MRM, University of Montpellier)
 
(1) International Research Centre for Environment and Development
(3) Expression used during the Renaissance by one of the fathers of Modern accounting, Manzoni, to designate what will become the assets of a balance sheet, as opposed to the "cose vive", living things, constituting the liabilities - the debts and obligations of the company - and referring exclusively to human beings, the only de facto sources of responsibility for the company according to this viewpoint.
(4) Extra-financial accounting framework, developed by the International Integrated Reporting Council since 2010, which is in the process of being "standardised" and which is tending to gain international acceptance. The is notably centred on shareholders and a natural and human world seen as pure resources for the creation of shareholder value.
(5 ) Model cited in the Notat-Senard report (p.62) and introduced both in Jacques Richard's book 'Comptabilité et Développement Durable' (2012) and in the article 'The 'Triple Depreciation Line' instead of the 'Triple Bottom Line': towards a genuine integrated reporting' (2015) (Critical Perspectives on Accounting) by Alexandre Rambaud and Jacques Richard.
 (7) Private body publishing accounting standards, known as IAS/IFRS (International Accounting Standards/International Financial Reporting Standards) and known as "international" standards, which are obligatorily used for the accounts of groups listed in the European Union, since no common agreement has been reached on a European accounting standard.
 
To go further
 
- The BioRESP Forum is organising a seminar dedicated to "The BioRESP Forum". How can you count on the living? »  on April 9, 2019, from 2:30 pm to 5:30 pm, at the PRODURABLE Exhibition (Palais des Congrès de Paris, Porte Maillot) 
- Book" L'urgence du vivant " by Dorothée Browaeys - Editions François BourinSeptember 2018 
 

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