Value-transforming financial, carbon and biodiversity footprint accounting

Sami El Geneidy, Maiju Peura, Viivi-Maija Aumanen, Stefan Baumeister, Ulla Helimo, Veera Vainio and Janne S. Kotiaho
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Sami El Geneidy: School of Resource Wisdom, University of Jyv\"askyl\"a
Maiju Peura: School of Resource Wisdom, University of Jyv\"askyl\"a
Viivi-Maija Aumanen: Division of Policy and Planning, University of Jyv\"askyl\"a
Stefan Baumeister: School of Resource Wisdom, University of Jyv\"askyl\"a
Ulla Helimo: School of Resource Wisdom, University of Jyv\"askyl\"a
Veera Vainio: School of Resource Wisdom, University of Jyv\"askyl\"a
Janne S. Kotiaho: School of Resource Wisdom, University of Jyv\"askyl\"a

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Abstract: Transformative changes in our production and consumption habits are needed to halt biodiversity loss. Organizations are the way we humans have organized our everyday life, and much of our negative environmental impacts, also called carbon and biodiversity footprints, are caused by organizations. Here we explore how the accounts of any organization can be exploited to develop an integrated carbon and biodiversity footprint account. As a metric we utilize spatially explicit potential global loss of species across all ecosystem types and argue that it can be understood as the biodiversity equivalent. The utility of the biodiversity equivalent for biodiversity could be like what carbon dioxide equivalent is for climate. We provide a global country specific dataset that organizations, experts and researchers can use to assess consumption-based biodiversity footprints. We also argue that the current integration of financial and environmental accounting is superficial and provide a framework for a more robust financial value-transforming accounting model. To test the methodologies, we utilized a Finnish university as a living lab. Assigning an offsetting cost to the footprints significantly altered the financial value of the organization. We believe such value-transforming accounting is needed to draw the attention of senior executives and investors to the negative environmental impacts of their organizations.

Date: 2023-09, Revised 2025-06
New Economics Papers: this item is included in nep-ene, nep-env, nep-ger and nep-hme
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