A History of Social Value Accounting

We’re not the first group to want to take stock of the way we account for value in business and to find a better way to accurately measure the true impact of an oragnisations activity. The economist John Maynard Keynes wrote about the limitation of the current calculation of economic growth as a measure of nation’s wealth. Many have considered better reporting methods to measure an organisations value and we’re simply looking to build on past work.

For the last couple of hundred years businesses, communities, societies and countries have run on the financial numbers and financial stories told by accountants. But more often than not these reports tell an incomplete financial story, which means decisions made based on these reports will, at best, be second rate.

The standard financial reports for an organisation tell the reader the financial position at the beginning of a period, what happened during the period and the financial position at the end of the period. The problem with this system is that it only accounts for the risk directly incurred by an organisation and ignores any risk or cost that is external. It also ignores any external benefits from an organisations activity.

Anyone looking into Social Value Accounting is looking for a better way to value their organisation and their activity.