Reimagining the Conceptual Foundation of Accounting : Environmental Wealth and the Society at Large

There is increasing awareness in the critical accounting literature of the need for a sea change in financial reporting that goes beyond expanding disclosures. However, efforts to bring environmental matters onto the balance sheet have been criticized for being inconsistent with many core accounting conventions. This paper contributes to research on ‘out-of-the-box’ solutions to tackle the environmental crisis by proposing an alternative conceptual foundation that extends the boundaries of conventional accounting. To this end, the paper revisits the ideational foundation of economics and develops an alternative concept that allows considering an entity’s environmental responsibilities in its financial accounts. In our endeavor, we draw inspiration from Boltanski and Thévenot’s (2006) ‘orders of worth’ framework to detail how the translation of the market world in the conceptual foundation of traditional accounting only leads to an ill-fitting hybrid with the green world. We examine how market logic has been translated into the concepts of wealth and property rights in economic accounting (Fisher, [1906] 1965; Coase, 1960) and how it has shaped our contemporary definitions of assets and liabilities. We also demonstrate how this specific economic thought imposed conceptual obstacles for the recognition of environmental matters on the balance sheet. Based on this analysis, the paper mobilizes features of a green order of worth and proposes introducing the concept of environmental wealth owned by the global society at large. We argue that the institutionalization of a ‘society at large’ creates a vessel that may transcend both market and green rationality within financial reporting