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Abstract
This study resituates the notion of Natural Capital (NC) in a cosmological perspective and mobilizes accounting theory to propose a fresh approach to the concept. Thus, we firstly offer a critical analysis of NC to clarify the differences between its (capitalist) economic and ecological approaches. To do this, we perform a “Latourian” anthropological analysis of the mainstream notion of capital, repositioned in the Modern cosmology, as well as the notion of “Ecology.” We show that the mainstream use of NC is incompatible with an ecological perspective, even in the case of Economic “Strong Sustainability.” As an outcome, this study renews the critical analysis of Strong versus Weak sustainability. We then connect this debate with the concept of capital in “Traditional” Accounting (TA). We argue that TA theory provides a relevant framework to structure the debate on NC and to implement an ecological conceptualization of this notion. At the corporate level, in particular, the difference between a capitalist and an ecological NC relies on the difference between a debit (economic) and a credit (accounting) concept of capital. This study so proposes an extension of the “classical” accounting practices in historical costs to a more ecological vision of NC, linking accounting practices understood by current corporate stakeholders to ecological requirements. By doing this, we want to open a potential path of research in ecological economics and accounting based on an alternative perspective on NC.
Acknowledgements
The author wishes to thank the two anonymous reviewers for their positive and insightful comments.
Disclosure Statement
No potential conflict of interest was reported by the author(s).
Notes
1 We use a capital letter to represent the absolute, and, so, fictive, characteristics of the elements in the domains of Objects and Subjects.
2 As a consequence of this analysis of Modernity, the differences between Marxism and Liberalism (or other Modern socioeconomic conceptions) can be interpreted as what is considered as Subjective or Objective (Latour Citation2014). For instance, in Liberalism, Society is seen from a Nominalist point of view (Centore Citation1997): Individuals are Subjects, whereas Society is a set of Subjects and therefore is a mere Object, controllable by Subjects. From Marxist viewpoints (and related theories), some communities, such as Classes, are partially Subjectified: a Class receives some attributes of the Subject (Power, in particular) and individuals that constitute this Class are partially Objectified (their existence is conditioned by their membership of this Class). Collectivism is also a partial Subjectification of a group (Society) and a partial Objectification of individuals. In fact, “the fusion of the subject-object inversion with the problem of the concept of capital is the fundamental theme of Marx’s œuvre” (Hudis Citation2012, 15); this shows the importance, in the understanding of Modern socioeconomic theories, of an analysis in terms of what is Objective or Subjective.
3 That is why we can, for instance, “choose,” in Modern thinking, to be a realist or a constructivist.
4 Another representative, with Latour, of the French political ecology “school.”
5 Castoriadis (Citation2013) specifies that this drive towards mastery is directed towards the whole of society: it is present not only in production, but also in consumption, and not only in the economy, but also in education, law, political life, and so on. Moreover, this drive provides itself with new means, and means of a special type—rational—to achieve it. It is no longer magic or victory in battle that are the means used, as in pre-Modern periods, but precisely Modern rationalization.
6 We stress the fact that workers, even if they are human, can be seen as partially Objectified. This is the case from a Marxist viewpoint, as stated by Lukács: “Marxism […] has discovered the true identical subject-object of history: the proletariat. The worker, we recall, becomes within capitalism a thing, an object, a commodity” (Cohen, Citation1994, 113).
7 The present value of each asset of this stock can be also used as a proxy for entry value (Pigou, Citation1941).
8 DEB is basically a technical tool that has different interpretations (Toms, Citation2009; Williams, Citation1978), even non-Modern ones (Aiken and Lu Citation1998): we need to distinguish between DEB as “[…a] super-historical and technical concept [… and as a] substantial, historical and economical concept on the basis of the recorded matters of the enterprise” (Lane Citation1977, 186).
9 Therefore, we challenge the idea that “accountants traditionally use the word “capital” as an economic metaphor for financial asset and manufactured means of production, subject to financial valuation and representation” (Coulson et al. Citation2015). Indeed, as still noted at the beginning of the twentieth century, “every banker and every commercial man knows that there is only one kind of capital, and that is money. Every commercial and financial transaction is based on the truth of this proposition, every balance sheet is made out in accordance with this well-established fact; and yet every economist bases his teaching on the hypothesis that capital is not money” (Mitchell Innes, Citation1914, 151). The fundamental shift in capital from a credit to a debit concept, connected to an economic conception, had begun to germinate as early as the Renaissance, but really occurred, in particular, at the beginning of the twentieth century, notably because of Fisher’s work (Chambers, Citation1971).
10 Both spellings are used.
11 The debate on the tenuous links between HCA and the development of capitalism is, to some extent, beyond the scope of this paper. The opposition shown here between an accounting logic that we call classical’, of which HCA is a part, and Capitalism refers both to a precise definition of Capitalism, at an anthropological level (Castoriadis Citation2013; Nitzan and Bichler Citation2009), and not simply at an economic one; above all, it refers to the fact that the notion of capital at the centre of classical accounting differs radically from capital in the Capitalist sense, as defined here. Moreover, as shown, the principle of “accumulation” is extrinsic to capital in HCA, whereas it is intrinsic to it, particularly in fundism.
12 French College of Directors of Sustainable Development.
13 “We urgently need to start work on rebuilding the accounting system to include natural and human capital on the liabilities side of companies” balance sheets. How can we conserve, preserve, and protect what never appears in the accounts! Both natural and human capital should be valued at their maintenance cost without having to discount them, which would be like negotiating with nature, which makes no sense” (our translation).
14 The C.A.R.E. model arose from (Richard Citation2012), whereas it was first theorised in (Rambaud and Richard Citation2015). The latest version of this model, as well as the concrete academic, private, and public initiatives around this research and development programme are summarized in (Rambaud and Feger Citation2020), (Rambaud and Chenet, Citation2021) and on the site of the “CERCES” (Cercle des Comptables Sociaux et Environnementaux – Circle of Social & Environmental Accountants) (https://www.cerces.org/). There is today a growing movement in the development, implementation and recognition of C.A.R.E. This model, and the associated research project, is supported by a community, composed of academics, professionals (companies like LVMH, French association of chartered accountants, etc.) and NGOs (such as WWF France), federated by the chair “Ecological Accounting” (https://www.chaire-comptabilite-ecologique.fr) at the research level, and by the NGO “CERCES” at the professional and NGO level. C.A.R.E. is also the subject of several French and international citations, encouraging its experimentation or exploration (see for instance (Bhattacharya et al. Citation2021; Notat and Senard Citation2018)). About thirty experiments have been conducted so far, in large companies (including multinationals), SMEs and public organisations. In addition, a dozen research programmes are currently working on this project.
15 The Lab Capital Naturel (Natural Capital Lab) is a joint initiative of WWF France and the Ecological Accounting Chair.
16 TNFD: Taskforce on Nature-related Financial Disclosures.
17 C.A.R.E. also takes into account human capitals in the same perspective (Rambaud and Richard, Citation2017).
19 Our translation.
Additional information
Notes on contributors
Alexandre Rambaud
Alexandre Rambaud has two PhDs, one in mathematics and one in management sciences (ecological accounting). He is a senior lecturer at AgroParisTech (French Institute of technology for life, food and environmental sciences)—CIRED (International Center of Research in Environment and Development) and Louis Bachelier Academic Fellow (https://www.institutlouisbachelier.org/en). He is co-director of the “Ecological Accounting” Chair, of the “Double Materiality” Chair and of the “Economy & Society” Department at the “Collège des Bernardins” (https://www.collegedesbernardins.fr/recherche/economie-et-societe). He is a member of the Sustainability Reporting Committee of the French Accounting Standards Setter and a former member of the Climate and Sustainable Finance Commission of the French Financial Markets Authority. He is also the scientific director and cofounder of the NGO “CERCES” (Cercle des Comptables Sociaux & Environnementaux—Association of Environmental and Social Accountants). ORCID: 0000-0002-4589-850X and LinkedIn: https://www.linkedin.com/in/alexandre-rambaud/