Introduction - Social Accounting

Social accounting means many things to many people and the extremes are best summarised by:

A corporation's social responsibility is to make a profit.
Milton Friedman (Economist)

Companies must internalise the concept of Corporate Social Responsibility (CSR). If there's a CSR ethos at the core, your policies and practices will develop organically.
Luc Vandevelde (Former Marks and Spencer CEO) at the Business in the Community's annual conference, July 2003

These two comments span the range of ideas that social accounting now encompasses. Many companies now prepare social accounting reports and appendices to their annual report and accounts as a matter of routine. Others don't do so on the grounds that they don't benefit from it and that it's too costly. There are currently no statutory requirements in the UK relating to the preparation, publication or independent review of corporate environment and social reports.

There is a key feature of social accounting and that is that its effects are felt throughout an organisation. This means that we can't do a bit of social accounting in the factory or the office but not in the canteen: social accounting involves us all. Governments are also keen to see the development of social reporting and accounting as they are keen for organisations to include corporate social responsibility as part of their every day decision making routine. The UK Government has given its Department of Trade and Industry (DTI) the job of working with the business community and social accounting.

Traidcraft plc is a leader in the trade/aid field and has been actively preparing and publishing social accounts since the early 1990s. Traidcraft was the first plc to do so and they may also be the first to admit that preparing social accounts is difficult. They also admit that it provides major learning opportunities for all staff. They have learned how to communicate better as a result of preparing their social accounts. To make accounts understandable for non-accountants and non-business people requires levels of skill that Traidcraft didn't have before.

In this resource we will explore social accounting in the context of the modern enterprise.

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