It wasn’t so long ago that the Enron scandal emerged and “cooking the books” became a common expression. Some corporations did almost anything to beat their competitors and as big banks were caught being leveraged more than 30 to 1, we witnessed another failed regulatory accounting method which has led to the current debt crisis. As we claw our way out of this recession, numerous variations of how to account for such downfalls are emerging. And this time the game is changing.
This past week over 1200 people from almost 80 countries and organizations, from Hess to Harvard, merged at the Amsterdam Global Conference on Sustainability and Transparency of the Global Reporting Initiative (GRI) to brainstorm on the issues of sustainable reporting and disclosure. At a time when corporate greed seems to still waft in the air, full-cost accounting was the topic of choice. Mark Gunther’s recent article The Next Debt Crisis Will Be Ecological seamlessly explains how we are living beyond our means. Speakers at the GRI conference reported we are currently using, on an annual basis, 130% to 140% of the earth’s biocapacity or basically an additional 40% on top of what the atmosphere is capable of chewing up and spitting back out all cleaned up.
This form of full-cost accounting measures both the financial debits and credits but also brings into consideration a company’s social and environmental impact. As stakeholders demand more transparency from their organizations, GRI reporting is making its way to the top of the “to do” list for executives. The Global Footprint Network organization will even guide individuals or families into finding out what their triple bottom line looks like. For corporations, it is becoming the norm to submit a GRI report.
For a country-by-country aspect on ecological debt throughout the world, a visual representation can really open one’s eyes.
As we all know, the true cost of things we buy really isn’t reflected in the price we pay. That pen from China sitting on your desk shouldn’t cost just 10 cents, should it? As this idea of triple cost accounting makes it way to the mainstream, consumers will become more aware of the devastation that is being brought to the planet’s biosphere and perhaps our accounting methods will be fullproof once and for all? That is, unless Mr. Lay or Mr. Madoff get out of the slammer any time soon.
Editors Note: Click Here to find out how you can get certified in the GRI methodology of sustainability reporting.