Impact Accounting Has an Equity Problem

Its advocates predict impact accounting will engender a more transparent, responsible, and sustainable capitalism. In a previous SSIR article, "Heroic Accounting," we reviewed the potential for miscalculation and misuse of impact accounting measures. There is another important problem we overlooked in that review: Impact accounting has an equity problem, because practical means for calculating impacts discriminate against poor people. Proponents of impact accounting shrug their shoulders at such concerns and respond that any accounting of social costs, even if done inaccurately, is better than no accounting at all. We expect the proponents of impact accounting to continue to promote it as the heir apparent to ESG.