Stanford Social Innovation Review
By Andrew A. King & Kenneth P. Pucker Sep. 20, 2021
As concerns mount about social and environmental sustainability, an unlikely planetary hero has emerged: the accountant. A growing collection of investors, academics, and business leaders have proposed that better accounting practices can overthrow what Financier Ronald Cohen calls “the tyranny of profit” and set capitalism on a more sustainable track. This new “Impact Accounting” promises to tabulate every way that individual companies influence planetary welfare—including economic profit, employment, social equity, biodiversity, and climate—and translate all of them into a single measure of impact, represented in dollars and cents. According to Cohen and Harvard Professor George Serafeim, the resulting “impact transparency will reshape capitalism…it will redefine success, so that its measure is not just money, but the positive impact we make during our lives.” Another Harvard Professor, Rebecca Henderson, expresses the plan concisely: “Accountants hold the key to the salvation of civilization.”
Read the full article: https://ssir.org/articles/entry/heroic_accounting
For the past 30 years, celebrated academics and business leaders have promoted the idea that companies often profit by addressing social and environmental problems. Although these proposals have been hailed as promising breakthroughs, they are unscientific and counterproductive.