Abstract

If a company’s share price rises when it sacks workers, or when it makes money from polluting the environment, it would seem that the accounting is not being done correctly. Real costs are not being paid. People’s ethical claims, which in a smaller-scale case would be legally enforceable, are not being measured in such circumstances. This results from a mismatch between the applied ethics tradition and the practice of the accounting profession. Applied ethics has mostly avoided quantification of rights, while accounting practice has embraced quantification, but has been excessively conservative about what may be counted. The two traditions can be combined, by using some of the ideas economists have devised to quantify difficult-to-measure costs and benefits in environmental accounting.