Jacques Richard holds a doctorate in Management Science and is Professor Emeritus at the University of Paris-Dauphine. He is a leading researcher who has published numerous articles and books. He has made a major contribution to the fields of accounting and sustainable development, the history of accounting, and international accounting.
Alexandre Rambaud holds a doctorate in mathematics and management science, is a lecturer at AgroParisTech-CIRED, a research associate at the University of Paris-Dauphine and an Academic Fellow of the Institut Louis Bachelier. He is co-director of the “Ecological Accounting” chair and the “Economy & Society” department at the Collège des Bernardins.
Révolution Comptable : Pour une Entreprise Écologique et Sociale[i] is described by its authors as a social, ecological, and accounting manifesto. It discusses how to challenge our economic systems by rethinking their most fundamental basis: the principles of accounting. By using a tone less formal than in their research, and adding pedagogical introductory chapters, these two academics make accessible a topic that is as technical as it is crucial: the role of accounting standards in the global economic system. They share the conviction that these accounting standards, likened by Jacques Richard to a global body of hard law[ii], are the root cause of modern capitalist management and its excesses. Accounting, which seems neutral by virtue of its regulatory and fundamental nature, is now revealed as a political tool, holding the keys to our economic system. Following in the footsteps of great thinkers such as Max Weber in his understanding of the importance of accounting (“Economy and Society”, 1922), or Karl Marx (“Capital”, 1867) and his vision of wage labour, they seek to explain the dependencies between our social organisation and the practice of accounting centred on financial capital.
In this spirit, the book begins with a reminder of the history of accounting, describing the origins of the discipline and its initial objectives. Luca Pacioli is widely regarded as the founding father of double-entry bookkeeping – which records the origin and destination of funds – through his seminal work “Summa de arithmetica, geometria, proportioni et proportionalita” dating from 1494. The authors remind us, however, that these basic principles had been established in the previous century by the Italian merchant Francesco Datini. In their view, Datini’s aim was clear: to establish an accounting system designed to optimise the management process of his business, with the aim of creating added value and accumulating capital. This introductory statement then evolves into a sociological, if not philosophical, reflection on our goals as a society. What aspects should we preserve, reward, or ignore in our pursuit of progress?
The answer that Datini’s accounting system gave to this question (and which modern accounting has inherited) is then simply detailed, using images and concrete examples, making it accessible to any reader. From this demonstration, one underlying principle is key: financial capital takes precedence over any ecological or social considerations. The name ‘capital’ reflects this: in its Greek origins, it means ‘the head of man’, or everything that is essential. Repaying it, and replenishing it, are the stated aims of the leaders and managers constrained by these standards.
In a more technical section, the authors explain that financial capital, which Datini places on the liabilities side of the balance sheet, is seen as a debt that must be repaid to those who have invested in the company. As long as this debt has not been repaid, revenue will be channelled into it, leaving only limited room for self-financing, fair remuneration of workers, or restoration of the environmental damages caused by commercial activities. The accounting financial result and added value are therefore dedicated to the remuneration of capital.
The question posed by the authors at this point is the following: is there a coherent and viable model that could respond to these limits, and therefore respect both financial progress and the well-being and preservation of our environment? According to Jacques Richard and Alexandre Rambaud, their CARE-TDL (“Accounting adapted to the renewal of the environment -Triple Depreciation Line”) model, with its triple depreciation line, would enable us to achieve this goal. By taking up the conceptual foundations of the “accounting weapon”[iii], the authors propose an innovative model aimed at restoring the balance of power. This model proposes the establishment of two new types of capital: social capital and environmental capital. Like financial capital, social and environmental capital must be conserved and preserved, and will be elevated to the highest level of managerial consideration.
In environmental capital, one of the considerations would be, for example, climate protection. Including this in the accounting framework would involve calculating the budgets that would make it possible to comply with the limits on greenhouse gas emissions recommended by the IPCC (by investing in decarbonisation). These would be recorded as capital in the balance sheet. In terms of human capital, we need to move away from our current vision of a labour market. The recommended solution would be a decent and proper “conservation pay”, plus additional remuneration in the event of profits, as part of a value sharing scheme. We would then move away from a relationship of dominance between investors and employees.
Of course, these profound changes imply a wider reflection on the reorganisation of governance in our societies. Each capital would be represented by representatives who would each hold a third of the votes, putting an end to shareholder hegemony. In addition, accounting for environmental and social capital would require an overhaul of our national and international organisations. For example, they would have to show a much greater interest in locality (in order to correctly calculate subsistence income thresholds and environmental damages).
In conclusion, in this ecological and social manifesto, Jacques Richard and Alexandre Rambaud deconstruct the capitalist logic, offering us a way out of a fatalistic vision of the capitalist economy as the only viable option. In an anti-capitalist but not anti-liberal manifesto, they propose new foundations for recreating a more ecologically and socially responsible economic system.
Jules Welgryn, Research Fellow, Which levers to mobilise low-carbon investments?
[i] Richard, J. en collaboration avec Rambaud, A., Révolution Comptable : Pour une Entreprise Ecologique et Sociale, Ed. de l’Atelier, pp.143
[ii] Richard, Jacques. “Chapitre 4 – Révolution comptable : vers une entreprise écologique et sociale.” Dépasser l’entreprise capitaliste, Éditions du Croquant, 2021, pp. 81–98. Cairn.info, https://doi.org/10.3917/asava.bache.2021.01.0081.
[iii] “La révolution comptable avec Jacques Richard.” France Culture, 28 Sept. 2020, https://www.radiofrance.fr/franceculture/podcasts/la-bibliotheque-ideale-de-l-eco/la-revolution-comptable-avec-jacques-richard-8339392.