I am attending a conference on accounting education at the University of Leeds this week.
I admit that much of what is being talked about will not excite readers here, but there are crossovers, of course.
One presentation was on the use of simulation models to teach sustainability in an accounting context.
It was explained that the students are given the task of managing a simulated company. They must do so whilst complying with as many of the United Nations Sustainable Development Goals as possible. They are told that this goal is more important than profit when the marks for best performance are awarded.
However, as those who designed the module, and now teach it, noted, however much they emphasise the issue of sustainability the message does not go through to many students. Every other module in the degrees the students are seeking to get is taught as if profit maximisation is the norm, and for many students it is impossible to give up that idea even when they are told to do so. So they compromise sustainability for profit, and are then upset when the marks do not reflect the simulated profits they have made.
The message is very obvious. If we tell people who are being trained to be in charge of the financial assets of the future that profit is all that matters then sustainability will always be a Cinderella issue to them.
No wonder we are in deep trouble.
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Tough assignment given there are 17 SDGs and almost 170 targets.
I assume students do get a briefing on Pigouvian externalities.
Does accounting ever include estimating and then costing such externalities ?
That is the aim of my sustainable cost accounting
It is possible, but it almost never happens.
The water companies are tasked with making a profit and rewarding shareholders. They are not tasked with keeping rivers clean from raw sewage. They meet these goals, and the CEOs get rewarded. Neoliberalism is as simple as that.
Perhaps it will be different at the MMT conference at Leeds University in July https://mmtconference.uk/conference2024/
Yet the water companies are obliged to comply with environmental pollution law, and have legal performance standards, which they are conspicuously failing to meet.
Simply internalise these externalities.
Was it not for the Tories cutting the Environment Agency’s budget by 70% since 2010 we may have seen effective monitoring and enforcement.
As it stands I think only massive fines, that equate to, or preferably exceed, the non-urinary value extraction these companies are taking during their ownership of the public utilities, are acceptable as an alternative to a return to public ownership, (and that with compensation at their current minimal capital value.)
Access to clean water, freedom from disease risk, and reduction of environmental degradation are some of the most crucial UN Sustainable Development Goals, referred to in today’s blog.
How come the world’s 6th largest economy cannot even meet these ?
What’s “non-urinary value extraction”? Taking the p**s?!
A thoroughly depressing thought!
Does this go deeper in terms of neoliberal conditioning? For example, “people” as a group would probably agree that sustainability is important. You would hope that their choices in say investments would follow. However, on an individual level, given a choice between a 10% return in a non-sustainable fund, or a 5% return but invested sustainably, how many would choose the 5%? And how do we move the needle so that more people would?
I think it is conditioning
If I may, it is even worse than that. This is an extract from a technical paper – on the network on which I was trained. The network remains by a long way, the best power network in the world in terms of reliability. Nothing else, anywhere even comes close (Japanese maybe but at an eye watering cost). The extract is a series of unsubstantiated assertions if not outright lies. There are no backup numbers. (the brick-built vs glass-fiber – you might get 30 – 40 years out of a fibre cabin … brick subs will last …..).
Cost – The meshed design philosophy has significantly increased capital and operational expenditures. The reinforcement costs in the SPM interconnected network are generally greater than in a radial equivalent. Unit protection in HV feeders requires complex protection systems including pilot wires, HV protection panels including backup batteries and an LV air-breaking circuit breaker. The additional substation equipment requires the substation to be of brick-built construction. This is more costly than a pre-fabricated glass reinforced plastic (GRP) enclosure.
• Complexity – The interconnected network is more complex to design, develop, operate and maintain. This requires specialist staff.
• Connections / extensions – Increased cost and complexity leads to increased connection costs and costs of network extensions / reinforcement
It is a utopian dream. We can’t design a known end and then expect all people will follow the regulated path towards it. No matter the rewards. People are going to ask themselves ‘is this regulation good’? They are going to ignore it and act on an impulse. Chief among the impulses is the attitude towards money. They are going to ignore the consequences.
They have placed a higher moral value to the act of making money than dealing with the consequences of how that money was made. Adjusting the utilitarian pay off matrix is completely irrelevant. Also irrelevant is making people think of duty. Because they were told that their duty is to follow the regulation, and they took ignored it.
Why are accountants not reporting the costs to the environment?
Doing so may show their companies are already bankrupt. Yet they continue trading.
Surely this should be illegal? Which of our political parties is committed to “Accounting for all the Costs”?
None