‘George Serafeim, an Accounting professor at HBS, has been leading a very interesting and impressive project, called the Impact-Weighted Accounts (IWA) Project:
The mission of the Impact-Weighted Accounts Project is to drive the creation of financial accounts that reflect a company’s financial, social, and environmental performance. Our ambition is to create accounting statements that transparently capture external impacts in a way that drives investor and managerial decision making.
In this post, I’ll give some basics of their approach, and highlight how it relates to moral accounting. The upshot is that the impact accounting project proposes a particular improvement to reporting on how businesses affect the world; moral accounting provides a framework for resolving disagreements about what impacts matter, and how to integrate their reports into accountability systems. There will be a lot of such disagreements, and they are going to be distinctly moral disputes.