Some businesses are founded with the stated aim of changing the world. Others, whether on their own initiative or at the instigation of public authorities, are also driven by this desire, as there are many issues at stake. The environment, inclusion and diversity, making the right decisions in the face of new constraints in a changing world—there are many reasons for businesses to adjust their strategies and trajectories in a number of areas.
In a techno-enthusiastic world, we like to see technology as the answer to all our problems, or hope that it is, for lack of a better answer, while for others the answer is regulation, and for others activism. But perhaps it lies in one of the oldest and most misunderstood tools of business management: accounting.
Behind balance sheets, income statements, and IFRS standards lies a system of representing the world that shapes what we consider to be of value, a system that we may wonder whether it is still appropriate for today’s constraints. It is not that the very concept of accounting is obsolete, but rather that the way it is structured and operates can lead to completely rational, even regulatory, choices that are not rational at all.
So at a time when businesses claim to be integrating climate, social, and human issues into their strategies, accounting remains largely blind to these issues and continues to focus on the short term, recognizing only what can be monetized and ignoring everything related to externalities or intangible capital.
If we start from the principle that as long as we don’t change what we measure, we won’t change what we do, then this is a subject that deserves our attention.
Changing accounting is not necessarily a matter for experts, but rather a political act. It means redefining performance criteria, sustainability conditions, and the very legitimacy of economic decisions. It is also a way of reintroducing the long term, complexity, and meaning into the management tools that currently guide most decisions in both the private and public sectors.
Too often seen as a support or administrative function, accounting is in fact the architecture that underpins our economic models. Questioning it means questioning what we choose to value and what we are willing to sacrifice. Not changing accounting standards means giving up on transforming economic practices in a profound way.
In brief:
- Current accounting structures the economic vision of businesses but remains blind to environmental and social issues.
- Its standards favor the short term and tangible assets, neglecting human, natural, and social capital as well as externalities.
- Transforming accounting is a political act that redefines performance criteria and introduces long-term sustainability into management.
- Tools such as Strategy Maps and integrated reporting make intangible assets and their causal link to financial results visible.
- Pioneers (Danone, La Nef) are proving that it is possible to extend accounting to extra-financial impacts without waiting for comprehensive regulatory reform.
Accounting, the invisible infrastructure of capitalism
Accounting is not neutral. It does not simply measure; it structures our view of the economy and our decisions. What it values is financed, and what it ignores is often marginalized. In its current form, it continues to reflect a Taylorist and patrimonial view of business.
This mental architecture, inherited from an industrial era with little concern for sustainability,makes deferred costs, interdependencies, and the degradation of common goods invisible. Human capital is treated as an expense, natural capital is treated as free, and social ties, relational quality, and reputation are absent.
The direct consequence is well known: businesses make decisions that are rational in terms of their measurement tools, but irrational in terms of social, environmental, or collective imperatives. Investment in psychosocial risk prevention, biodiversity, or talent retention may be deemed non-priority because it is not visible in the accounts.
Faced with this asymmetry in terms of prioritization, any CSR or sustainability strategy therefore remains confined to the periphery of the dominant model.
Restoring value to the intangible
In an economy based on knowledge, relationships, and reputation, it is paradoxical that accounting remains rooted in a materialistic logic inherited from the industrial era. Intangible capital, whether in the form of team skills, innovation, customer trust, or the quality of relationships with partners, has become central to value creation, yet it remains invisible on balance sheets.
According to OECD estimates, more than 80% of the value of listed companies is now based on intangible assets. However, in the absence of a regulatory framework, these assets are ignored or only partially accounted for (particularly in goodwill, during acquisitions). This discrepancy between economic reality and its translation into accountingconstitutes a blind spot in the strategic management of organizations.
Credible initiatives are nevertheless attempting to structure this recognition: the WICI (World Intellectual Capital Initiative), the ISO 30414 standard on human capital, and the work of the FNEGE on strategic intangibility. But until these dimensions are integrated into financial statements themselves, they will remain optional.
Maps to make the essential visible
To make this intangible wealth visible and give it a place in strategic decision-making, some businesses rely on strategy maps derived from Kaplan and Norton’s Balanced Scorecard. These maps make it possible to visualize the intangible value chain: they link human resources, process quality, innovation capabilities, and customer satisfaction to economic performance.
In other words, they structure a causal logic between invisible investments (training, culture, interpersonal skills, etc.) and visible results (profitability, growth, impact).
Strategy maps offer a managerial translation of intangible assets. They make it possible to track their evolution, demonstrate their usefulness, and sometimes even begin to estimate their value.
They can therefore serve as a springboard for expanded accounting, helping to draw lines between human, social, and intellectual capital and expected accounting results.
These practices are part of a broader shift toward integrated reporting models, such as those of the IIRC’s IR Framework, which extend the concepts of capital and performance beyond the financial realm.
For example, EDF has used strategy maps to connect its CSR engagements to the performance of its units by integrating them into management control, and Schneider Electric has linked its sustainable development strategy to its internal dashboards using a logic inspired by strategy maps.
Pioneers changing the rules of the game
While accounting standards reform remains slow, some players have decided to take matters into their own hands by redefining the rules of the game.
Danone puts carbon in the figures
Long before the terms “green accounting” and “Green CapEx” became slogans, Danone was already experimenting with expanding its accounting scope to include environmental externalities. In the late 2000s, driven by its carbon strategy, the group rolled out a pioneering system in partnership with SAP to integrate CO? emissions into its management systems (If it matters measure it. If it’s new build a new frame of reference.).
The aim was to be able to measure, product by product, the complete carbon footprint throughout the entire life cycle (raw materials, manufacturing, transport, distribution, use, end of life). The system is based on SAP ERP, automatically queries logistics and production data, and produces monthly carbon indicators that can be used directly by local teams.
But Danone didn’t stop at measurement. It linked these indicators to its management policies: up to 30% of plant managers’ bonuses were indexed to carbon reduction results. In just a few years, the business reduced its emissions by more than 20%, while increasing internal environmental awareness.
This system did not directly alter the published financial statements, but it did establish a genuine parallel accounting system integrated into operational management. By linking financial data and impact data in a single information system, Danone created the conditions for a form of double accounting: one focused on economic performance, the other on environmental performance, with aligned objectives, indicators, and incentive mechanisms.
Although marginal at the time, this approach foreshadowed the principles of multi-capital accounting promoted today by the most forward-thinking thinkers and shows that it is possible to broaden the scope of management without waiting for accounting standards to be reformed, by building a parallel layer of analysis that gradually becomes structural.
La Nef
An ethical and cooperative bank, La Nef only finances projects that have a social or environmental benefit. Every year, it publishes a full list of the projects it has financed, ensuring unprecedented transparency in the allocation of savings. This consistency between its mission, governance, and accounting practices makes it a living example of accounting that is aligned with the purpose of the organization.
The integrated reporting framework
Adopted by a growing number of large businesses, the integrated reporting framework allows reporting to be structured around six interdependent capitals: financial, manufacturing, natural, human, intellectual, and relational. This framework, supported by the IIRC and the IFRS Foundation, paves the way for a more systemic representation of performance.
Bottom line
Accounting is not just a technical language. It is a kind of collective compass. It indicates what matters, what deserves to be monitored, invested in and protected.
Changing accounting means making the viability of our economic models dependent on their ability to preserve ecological, human, and social balances and finally allowing businesses to be evaluated not only on what they produce, but also on what they preserve.
It is not a question of eliminating net income or saying that it does not matter, but rather of contextualizing it and placing it within a broader vision of value creation.
Image credit: Image generated by artificial intelligence via ChatGPT (OpenAI)
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