Study on impact of accounting systems and rules for companies on resource efficiency in the EU

This report analyses whether existing accounting rules can affect decisions companies make about investing in resource efficient assets or selling products that are more resource efficient. Across the EU, depending on whether or not a company is listed on an EU stock exchange, there are different accounting rules that need to be applied. As a simplification, if companies are listed on EU stock markets, they have to prepare consolidated accounts using International Financial Reporting Standards (IFRSs), but for other types of reporting national accounting systems are generally used. In this summary, we use the term 'accounting system' to refer to IFRS or one of these national accounting systems. The general conclusions of this report are that, most of the time, accounting rules do not materially influence companies' decisions on whether or not to invest in resource efficient assets. Rather, other factors affect these decisions, such as access to finance, tax policies, the ethics of business managers, incentive schemes for staff, the degree of short-termism in companies, and the fact that many environmental resources are either not priced or are underpriced compared to the value which society places on them.