Six Capitals, or Can Accountants Save the Planet?

• DOI: http://doi.org/10.1002/jcaf.22147
• Published date: 01 March 2016
• Date: 01 March 2016

87

© 2016 Wiley Periodicals, Inc.

Published online in Wiley Online Library (wileyonlinelibrary.com).

DOI 10.1002/jcaf.22147

Six Capitals, or Can Accountants

Savethe Planet?

Tom Pryor

BOOK REVIEWED

Gleeson-White, Jane, 2015.

SixCapitals, or Can

Accountants Save the Planet?

(New York: W. W. Norton &

Company, First published in

Australia by Allen & Unwin

PtyLtd 2014).

This thought-provoking

book describes the 21st-century

revolution of accounting that

is unfolding, written by the

same author who chronicled

the 14th-century revolution,

double-entry bookkeeping.

This book should be read by

deans of business schools,

accounting professors, and

chief financial officers as they

prepare strategic plans.

The “why” for the

21st-century revolution is

captured in a question posed

in the book’s preface: How

much does a McDonald’s Big

Mac hamburger cost? Former

World Bank economist Raj

Patel estimates the real cost of

a Big Mac to be $200, not the

$2 reported by a traditional

accounting system:

The reason Big Macs

sell for almost one-

hundredth of this figure

is that their price does

not account for their

real costs. These include

their carbon footprint,

their impact on the

environment in terms

of water use and soil

degradation, and the

enormous health-care

costs of diet-related

illnesses such as diabetes

and heart disease. (p. xv)

Double-entry accounting

served the agricultural and

industrial ages adequately.

Using six lengthy chapters,

theauthor describes a story

of new forms of accounting in

the early 21st century proposed

for the information age. In the

six chapters, several emerging

global initiatives with goals to

define new accounting methods

are described. This reviewer

was familiar with some of the

initiatives but many were new:

• The Institute of Chartered

Accountants in Australia

is exploring challenges and

opportunities in the area

of corporate sustainabil-

ity. Sustainability denotes

long-term thinking with

a trifold focus on People,

Profit, & Planet.

• The Prince of Wales’s

Accounting for Sustain-

ability project.

• The European Account-

ing Association claims that

corporate accounts now

convey only 20 to 30% of a

firm’s value as compared to

40 years ago when account-

ing captured up to 90%.

• The International Inte-

grated Reporting Council

(IIRC), with its epicenter

in South Africa, pro-

poses a new corporate

reporting framework that

encompasses six capitals:

financial, manufactured,

intellectual, human, social

and relationship, and

natural capital.

• The Global Reporting Ini-

tiative (GRI), established

by Ceres and the Tellus

Institute, was to create a

generally accepted system