A spotlight on Raphaël Hara, Managing Director and co-founder of Ksapa Sustainability & ESG Consulting, and Adrien Covo, Ksapa Senior Program Officer, whose work on Triple Capital Accounting features in the recently published Routledge-CoBS book Responsible Finance and Accounting: Performance and profit for better business, society and planet
Triple Capital Accounting: From outside in to inside out by Tom Gamble, from an interview with Raphaël Hara and Adrien Covo.
Raphaël Hara and Adrien Covo are part of Ksapa, founded in 2019 and one of the fastest growing European consulting firms specialised in sustainability and ESG. We asked Ksapa to share their expertise and include an insight on triple capital accounting in the Routledge-CoBS book Responsible Finance & Accounting. Following on from the publication of the book, we interviewed Raphaël Hara and Adrien Covo on the key takeaways of their work.
But first of all, what is Triple Capital Accounting? In a nutshell, state Hara and Covo, Triple Capital Accounting is designed to reflect the impact of a company’s activities both in terms of financial capital and also natural and human assets. These can include, among others, the environmental and psychological impacts of work, accidents, and corporate initiatives.
Key takeaways on Triple Capital Accounting
According to Hara and Covo, new frameworks are needed to offer a larger and more comprehensive view of economic activities – and also to better account for a firm’s socio-environmental externalities. “Accounting, as the prime reading and comprehension tool for all economic players,” asserts Raphaël Hara, “holds the necessary potential to set up a transformative framework much needed to shift corporate and investment policies.” Indeed, pushing businesses to seek a sounder appreciation of the resources they use and on which they rely is the first step to valuating positive and negative socio-environmental impacts. “It’s not only about P&L, but also about monitoring … and enhancing the natural & human capitals,” adds Adrien Covo.
The relevance of Triple Capital Accounting
https://www.routledge.com/Responsible-Finance-and-Accounting-Performance-and-Profit-for-Better-Business/Zicari-Gamble/p/book/9781032329185Both authors see TCA as being important. “Moreover,” states Hara, “the purpose of the responsible finance & accounting movement is to push forward ideas and concepts that further the social and environmental causes and better represent double materiality approaches. That is, how a firm’s business is affected by sustainability issues – outside in – and how their activities impact its stakeholders, society, and the environment – inside out.
“As such,” says Raphaël Hara, “any tools that might help to account for and better manage those considerations are key.” The authors also see providing concrete alternatives as also more impactful than any commitment or declaration on those topics. “In view of the transformative potential of triple capital accounting,” states Hara, “it is our role to push business leaders and decision-makers to take action and test those models – and also to make them evolve using tangible case study examples.”
Triple Capital Accounting: Future hopes
We asked Raphaël Hara and Adrien Covo what changes they would like to see happening as a result of their work. The immediate response was a call for large corporations – and/or investors on a test portfolio – to take action by testing out the different possibilities behind the concept of triple capital accounting through pilots.
For Adrien Covo, this represents a prime means to allow for further advances in the concept and the establishment of concrete operational guidelines that any business can adopt and implement. “Indeed,” asserts Covo, “a robust methodological and conceptual approach is needed to guide these experiments, but these approaches must also be tested on various organizations, in various contexts and continents, to become more operational and focus on material issues.”
“In this respect,” adds Raphaël Hara, “we think public authorities have a major role to play by setting an example and testing these new frameworks. It’s also a new track to follow to guide regulatory & tax policies in the future.”
Business for people and planet
Tackling current social & environmental issues is complex in today’s world. Not least because many stakeholders have different views and understandings of the same problems. “Ideological approaches must be avoided as much as possible,” states Raphaël Hara, “in order to focus on the overriding issue that is positive impact on people and planet and not positions and standpoints.” For him, the question of giving a value to nature and human capital is also an ethical question, remaining largely unsolved.
But the authors are upbeat, hoping “that positive impact on natural and human capital or regenerative approaches will be fully integrated in the future framework developments.” Moreover, they affirm that providing a commonly agreed-upon framework – basically a new IFRS standard – will allow for alignment across businesses and industries – and thus enable concrete actions to take place, otherwise difficult to implement when you don’t have the necessary visibility.
Ksapa is continuously providing insights into other ESG, finance, and impact topics, as well as others such as human rights and responsible sourcing. It might be wise to take a look at their blog, briefing papers & webinars on ksapa.org.
Discover Triple Capital Accounting: Putting a price on the planet and people, an insight by Ksapa’s Raphaël Hara and Adrien Covo, included in the book:
Responsible Finance and Accounting: Performance and profit for better business, society and planet
Useful links:
- Discover a host of reads and downloads via Ksapa’s Advocacy page
- Learn about Ksapa’s team and partners
- Link up with Raphaël Hara and Adrien Covo on LinkedIn
- Read a related article: How social and environmental accounting can change the nature of our game.
Learn more about the Council on Business & Society
The Council on Business & Society (The CoBS), visionary in its conception and purpose, was created in 2011, and is dedicated to promoting responsible leadership and tackling issues at the crossroads of business and society including sustainability, diversity, ethical leadership and the place responsible business has to play in contributing to the common good.
Member schools are all “Triple Crown” accredited AACSB, EQUIS and AMBA and leaders in their respective countries.
- ESSEC Business School, France-Singapore-Morocco
- FGV-EAESP, Brazil
- School of Management Fudan University, China
- IE Business School, Spain
- Keio Business School, Japan
- Smith School of Business, Canada
- Stellenbosch Business School, South Africa
- Trinity Business School, Trinity College Dublin, Ireland
- Warwick Business School, United Kingdom.
