Social and environmental accounting – Wikipedia

The Social and environmental accounting ( social and environmental accounting in English) is a form of accounting of companies aimed at taking into account their behavior in social matters, in particular with regard to labor law, and relating to the environment and sustainable development. The interest in it has developed with the globalization and the increased importance of multinationals, relocating part of their production to countries sometimes endowed with an ineffective legal system for the protection of rights ^{[ first ]} . Today, at the time of the anthropocene, while companies are faced with their own production, exchanges and distribution systems, The normative dimension of accounting is felt. Like any language – and there are few so universal -, accounting induces an interpretation of the world. “Accounting is actually the only language common to all the players and partners of the company […] However, behind accounts, there are accounting standards. These are the rules of the game. And such rules are never neutral. They can have consequences that ultimately influence business strategies and decisions. This is why accounting standards, underlying concepts and their logical foundations are of decisive importance. This theoretical material influences understanding and piloting business activity, and therefore potentially the march of the whole economy “Maurice Levy. This stranglehold is all the more significant today, since the economy has never occupied such a central place in human societies. Accounting according to International Financial Reporting Standards by its structure, offers a biased vision of the world. It does not make it possible to make visible the ethical, technical or socio-ecological issues. It is blind to interrelations between organizations and their institutional, social and natural environment. Models and methods of environmental and social accounting are based on the transfer of accounting information systems, on the decompartmentalization of accounting which must call on other disciplines: law, ecology, economics, taxation, history, sociology, philosophy, etc …, on a principle of strong sustainability ^{[ 2 ]} .

They are of two types:

1. Environmental expenditure directly counted in business accounts (in charge or as assets);
2. Environmental liabilities, generating environment -related provisions.

Environmental expenses (within the meaning of the CNC) [ modifier | Modifier and code ]

They are in France defined by the 2003-R02 recommendation of the National Accounting Council (CNC).
These are expenses “Carried out with a view to preventing, reducing or repairing the damage that the company has caused or could cause by its activities, the environment” , in particular induced by ^{[ 3 ]} :

• the elimination of waste and the efforts undertaken to limit the quantity;
• the fight against soil pollution, water (surface and/or underground);
• preservation of air and climate quality;
• the reduction of noise pollution;
• The protection (or if applicable renaturation/catering) of biodiversity and landscape.

However, only “additional” expenses (that is, neither recurrent “expenses, or accessories intended to prevent, reduce, compensate or repair damage caused to the environment will be retained. Puppet is an environmental expenditure, but its maintenance costs are not). On the other hand, new expenses that increase its capacities would be classified as “environmental expenditure” ^{[ 3 ]} .

If an additional expenditure is inseparable from other costs (of which it is possibly “integral part”), it is estimated if it essentially aims at “Prevent, reduce or repair damage caused to the environment” ^{[ 3 ]} .

These expenses in environmental accounts are found in France and in other countries.

Noticed : Some investment expenses differ clearly from those that are simple charges. For them the CNC defined ^{[ 4 ]} Environmental expenses that can be recorded in assets if they combine the following three conditions ^{[ 3 ]} :

1. be justified by the safety of people, or environmental protection;
2. be legally compulsory;
3. Their non-realization would imply the cessation of the business (or installation) of the company.

The costs of future upgrading to environmental equipment standards are therefore generally not counted in charges; But in investment expenditure coming to increase the value of the assets concerned (and allow the continuity of the activity of the company); These expenses are assimilated to assets, because bringing a priori an economic advantage to the company in its future ^{[ 3 ]} .
Sometimes the burden and the asset are difficult to distinguish, for example when so -called “environmental” expenses are close to current operational expenses ( waste treatment, water management … ). In these cases a certain freedom of interpretation and accounting rules are admitted ^{[ 3 ]} But this implies that the financial efforts of business in favor of the environment cannot be compared based on their environmental expenses and/or investments (or their evolution) ^{[ 3 ]} .

Environmental liabilities [ modifier | Modifier and code ]

An international accounting standard ^{[ 5 ]} defines as provision a passive whose deadline or the amount is uncertain (unlike those of debt); The passive therefore results from past events and whose extinction will result in the company by new resources ^{[ 3 ]} .

The liabilities have a legal or contractual origin, or is implicit (following the life of the company) and must be recognized.
The “environmental liabilities” is recognized as a provision if ^{[ 3 ]} :

1. The company has a current obligation, resulting from a past event;
2. An exit from resources is likely (that is to say: more likely than improbable);
3. The amount of the obligation can be evaluated reliably.

Annexes to the financial statements, give quantitative and qualitative information on these provisions, including their accounting value (when opening and closing the financial year) except in the context of business groupings, the environmental liabilities are not counted whether ^{[ 3 ]} :

1. The obligation exists but it is unlikely that a resource exit is necessary to extinguish the obligation;
2. The obligation exists but the obligation cannot be weakly evaluated;
3. The obligation is only potential (in case of occurrence (or not) of future uncertain events, which are not under the control of the company. If it is important, it must appear in the annex of the accounts , with description of the nature of the liabilities, an evaluation (if possible, without compulsory details on uncertainty).

Estimating a passive is sometimes delicate, for example when the lifespan of a site is not regulatory, or that its future use is still unknown. Scenarios can then be established. According to the standard, the estimate of the exit of resources cannot be compensated by the amount of possible reimbursements expected ^{[ 3 ]} . If a polluted site must be sold or sold, the amount of provisions cannot therefore be assigned by the amount of the added value expected for this transaction ^{[ 3 ]} .

Unlike International Accounting Standards (IFRS) French accounting standards for provisions do not make the updating compulsory, even when its effect is significant ^{[ 3 ]} .

Multi-space accounting [ modifier | Modifier and code ]

In financial capital, environmental and social accounts, associate environmental and social capital, for a performance that incorporates into the accounting assessment of a company, both assets and liabilities, a financial recovery of the effects of its activity on the society and the environment, whether these effects are positive or negative. “With multi-capital accounts, companies would be judged directly on their ecological and social performance. This would require changing societal indicators, but that would be a change of change.” ^{[ 6 ]}

From 2011, the declarations published by the European national accounting system (as satellite accounts), previously based on gross domestic product, gross national product, gross national income, net national income and raw inner expenditure, Europe sets up a first environmental accounting Integrated into its economic accounts which will integrate atmospheric emissions, the eco -taxes perceived (on energy, transport, pollution and consumption of resources) and the flows of materials (solid, liquid and sparkling except air and water) ^{[ 7 ]} . A regulation produces a common framework for the collection, development, transmission and evaluation of European economic accounts of the environment, with a period of two years to the maximum left to the Member States to transmit their data ^{[ 7 ]} .
In 2013, other indicators may be proposed by the Commission (expenses and revenues related to environmental and ecosystem goods and services, environmental protection, natural resources or energy ^{[ 7 ]} . Certain transfers (of the environment -related subsidies type), as well as expenses related to the use or management of resources (including water, quantitatively and qualitatively), waste …) could be taken into account. Accounts related to forests and certain materials could also be included ^{[ 7 ]} .

The June 7, 2011 , the MEPs have expressed their support for the integration of a social component by adopting a non -binding resolution on the theme “GDP and beyond” , following the eponymous communication made by the European Commission in 2009 ^{[ 7 ]} . They wish there concrete proposals on the integration of these new indicators in Eurostat ^{[ 7 ]} .

Corporate social responsibility and public relations [ modifier | Modifier and code ]

Social accounting is one of the tools implemented in order to take into account corporate social responsibility (CSR). Taking into account the criteria other than financial in the establishment of these assessments aims mainly to improve the brand image of the company, both for commercial and political purposes. It is therefore a form of public relations, integrated in order to meet the expectations of consumers and shareholders concerned with the production methods used in the making of the product purchased.

The balance sheets can be written by the company itself. However, in order to ensure the veracity of information, firms sometimes use independent audit firms that can establish social and environmental assessments. Various lawyers, such as Alec Stone Sweet, advocate these kinds of audits more ^{[ first ]} .

Finally, some NGOs themselves establish social assessments of firms, sometimes against their will.

Social balance sheets, which appeared in the United States in the 1950s in certain companies and were established in France by a decree of December 8, 1977 ^{[ 8 ]} , are distinguished from the current audits advocated in the context of social and environmental accounting in that they are strictly intended for communication internal of the company. They are not intended to be made public. In this sense, the social and environmental accounting approach aims to deepen the existing use of social balance sheets, in particular by their publication.

In France, the social assessment has seven chapters:

– employment;

– compensation ;

– hygiene and safety;

– labor conditions ;

– Training ;

– Professional relations;

– Living conditions in the company.

He therefore does not integrate environmental concerns, and is mainly concerned by working conditions. In 2002, the CDJES (Center for young leaders and actors of the social economy) implemented the “societal assessment”, which had 15 criteria including some concerning the ^{[ 9 ]} . Unlike the social assessment, which has been legally compulsory since 1977, the societal assessment is done on a voluntary basis.

Finally, the Grenelle II law has introduced an environmental reporting obligation, the implementing decree being being drafted. In England, the Companies Act de 2006  (in) incorporates similar bonds.

Socio-environmental models and methods of accounting [ modifier | Modifier and code ]

The first 5 methods offer an extra-financial approach = social and environmental indicators are presented in the form of an annexed reporting or not to the financial statements, and certified or not by an external organization. The other 6 propose a financial approach with an enhancement of extra-financial data using indicators, then integrated into the model of representing the financial value of the company, either by adding information to the financial statements, or by production of restructured financial statements. ^{[ ten ]}

Life cycle analysis (ACV) [ modifier | Modifier and code ]

The analysis of the life cycle (ACV) lists and quantifies, throughout the life of the products, the physical flows of matter and energy associated with human activities. She assesses the potential impacts and then interprets the results obtained according to her initial objectives.

« Communication on progress » (COP) du Global Compact [ modifier | Modifier and code ]

Blow ^{[ 11 ]} Allows you to communicate on the progress made in the implementation of the ten principles and the contribution to the achievement of the 17 sustainable development objectives.

[ modifier | Modifier and code ]

The dpefs ^{[ twelfth ]} is a European CSR reporting system which aims to build a strategic steering tool for the company, both concise and accessible, focused on essential information.

Global reporting initiative (GRI) [ modifier | Modifier and code ]

The GRI incorporates other stakeholders (companies, organizations, associations, etc.) around the world. It was set up to establish a standard of indicators to measure the level of progress of business programs in terms of sustainable development. To this end, it offers a series of guidelines in order to report on the different degrees of performance, social and environmental levels.

Task force on climate-related financial disclosures (TCFD) [ modifier | Modifier and code ]

La TCFD ( Task-Force on Climate Related Financial Disclosure ), working group on the publication of climate financial information, aims to improve the financial transparency of companies in terms of climate. It encourages economic players to publish information on how climate -related opportunities and risks are taken into account in governance, strategy, risk management and indicators and metrics used.

Intangible capital – Thesaurus Bercy [ modifier | Modifier and code ]

French standard for the measurement of extra-financial and financial value of the intangible capital of companies ^{[ 13 ]} .

EP & L (Environmental income statement) [ modifier | Modifier and code ]

The ep & l Measure, throughout the supply chain, CO² emissions, water consumption, air and water pollution, soil use and waste production, thus making visible, Quantifiable and comparable the impacts of group activities on the environment. These impacts are then converted into monetary value in order to quantify the use of natural resources.

International integrated reporting council (IIRC ou IR) [ modifier | Modifier and code ]

The International Integrated Reporting Council (IIRC) is a global coalition of actors convinced that businesses must evolve

Towards a communication on value creation ^{[ 14 ]} .

Social return on investment (SROI) [ modifier | Modifier and code ]

The social return on investment consists in measuring the change which can be attributed to the intervention studied and then grant a monetary value as a common unit of measure of the social value created.

CARE – Comprehensive accounting in respect of ecology (CARE) [ modifier | Modifier and code ]

Based on the traditional principles of accounting, the Conceptual Care Conceptual framework (declined in a methodology) aims to ensure the joint preservation of capital (defined as advances/debts) financial, human and natural, mobilized by economic activities ^{[ 15 ]} . Care is based on a coupling between extra-financial data and estimates of the costs necessary for the preservation of the capital concerned.

Universal accounting [ modifier | Modifier and code ]

Method which makes it possible to establish, in addition to financial accounts, an accounting expanded mainly to 4 areas (social, societal, environmental and governance) and which is based on a “fair value” valuation of intangible or external elements the company.

Related articles [ modifier | Modifier and code ]