CARE Tri-Capital Accounting System

= reforming accounting by introducing human and environmental capital

URL = http://www.compta-durable.com/comptabilite-environnementale-sociale/modele-care/

Description

Coop des Communs:

(translated from the French)

"The notion of "capital" is central in accounting and economics, but it does not have the same definition in both:

Historically and in "classical" accounting, capital is a debt and not a set of assets, i.e., productive resources.

In economics and so-called "market value" accounting, capital is an asset.

In the C.A.R.E. model, a capital is an "entity" (material or immaterial, human or non-human), employed and consumed (by the organization), whose existence is independent of the organization's activity (particularly of its utility/productivity), recognized as a source of concern that must be preserved (soil, climate, watercourses, employee/professional identity, employee/physical health, etc.).

C.A.R.E. is based on a systematic extension of monitoring the uses/consumptions in the organization's activity and on guaranteeing the repayment of these capitals in due course. This implies the implementation of biophysical accounting, dashboards, etc.

C.A.R.E. leads to the monetary valuation of capitals and their uses. This valuation is based on the cost of the real and concrete activities required to preserve these capitals. This perspective opposes the so-called "neoclassical" approach, which is based on the monetization of socio-environmental issues and the benefits they can provide, and on the financialization of nature and humans.

C.A.R.E. encourages questioning how to preserve the capitals used and restructuring business models. Alongside the "operating function", a "preservation function" is highlighted.

Consequently, whereas profit and profitability, as currently measured, are achieved at the expense of the capital "entities" (natural and human) that need to be preserved, with C.A.R.E., an organization can only calculate its profit or define its performance once it has guaranteed the repayment of its ecological debt to these natural and human capitals, just as it already does for its financial capital.

Like financial capital, which represents the company's debt to its shareholders, human and natural capitals are recorded on the liabilities side of the balance sheet as debts to humans and non-human living beings, respectively. C.A.R.E. therefore has an impact on the company's accounts. The result incorporates the cost of conservation actions for all capitals.

The conceptual framework of C.A.R.E. is a "natural" extension of the liability and asset concept in accordance with historical cost accounting theory. For these reasons, C.A.R.E. is adaptable to the structure and very theory of most national accounting standards, but requires a profound evolution of these (particularly to include new types of ecological liabilities). In this respect, C.A.R.E. appears as a pre-standardization accounting project, clearing the way for the structure that accounting standards aligned with ecological sciences and the reality of organizational management/control should follow."

(https://nextcloud.coopdescommuns.org/index.php/s/XgssJY9q9J8ZmYw?)

Characteristics

Coop des Communs:

(translated from the French)

"The fundamental principles of the C.A.R.E. method

The C.A.R.E. model includes a method, logically deduced from this framework, which evolves in a process of continuous improvement, while remaining organized by the conceptual framework.

The main principles guiding the method's implementation concern the identification of capitals, strong sustainability, and double materiality:

The identification of capitals to be preserved is carried out by the people concerned; for human capitals, these are employees, volunteers, etc., with the help of experts (occupational physicians, work psycho-sociologists, union representatives, ergonomists...). The same applies to the analysis of types of degradation, the definition of standards to be respected, and the determination of actions necessary for the maintenance of human and natural capitals. Contrary to the concept of externality, in which degradation is not considered as such, but only as economic damage, it is not a matter of giving a price to human life or nature, but of valuing the actions that are necessary for the preservation of these capitals; "the goal is indeed to preserve nature on the basis of a maintenance cost and not to give it a price" (Rambaud and Richard, 2020).

There is no possible compensation between the three types of capitals. In a logic of strong sustainability, capitals are preserved for what they are intrinsically. This is the negation of the right to pollute, of "carbon" markets which have been shown to be, at the very least, counterproductive for achieving climate change objectives.

With the principle of double materiality, it is not just a matter of integrating, in the company's accounts, the risks that the environment poses to the company (financial materiality), but also the company's responsibilities towards its environment (impact materiality).

Expanded accounting systems can be of the 'Outside-In' (E/I) or 'Inside-Out' (I/E) type. An 'E/I' accounting system is designed to integrate the (positive and negative) impacts of the environment (broadly defined) on the company.

In this context, the organization (the inside) views the environment (the outside) solely as:

• a source of constraints or risks (natural, human and/or regulatory), i.e. negative impacts of the environment on the company;

• or opportunities, i.e. positive impacts of the environment on the company.

An 'I/E' accounting system, on the other hand, is organized to report the impacts of the company on the environment (broadly defined). According to this view, advocated particularly by ecological economics, the company is directly embedded in the ecosphere, on which the economy depends in a primary way (Passet, 1979). An integration aimed at sustainability should thus include a significant 'I/E' component (Richard, 2012)."

C.A.R.E. can thus lead to the restructuring of business models: to exploit capital entities and thus create value, the C.A.R.E. method requires questioning, upstream, how to preserve the capitals used for this value creation.

By extending the notion of debt-capital to other capitals and by advocating genuine co-management of organizations (Rambaud and Richard, 2018), the C.A.R.E. model falls within a logic of dialogic accounting, as opposed to the current mono-logic accounting which addresses itself essentially to one category of actors, the shareholders (Brown, 2009), and which recognizes the diversity of actors and representations and establishes dialogue and debates within a broad stakeholder system: "the usefulness of such accounting does not lie in its representation of an 'infallible truth', but in the creation of a range of environmental and social visibilities and in the exposure of values and priorities that become inputs for broader democratic processes and decision-making... Dialogic accounting thus hopes to promote a more pluralistic expression of the public interest, extend the limits of environmental accounting beyond traditional corporate reports, give a place to the needs of people most affected by corporate operations, and challenge the taken-for-granted primacy of shareholder value maximization" (Bigoni, Sideeq, 2023)."

(https://nextcloud.coopdescommuns.org/index.php/s/XgssJY9q9J8ZmYw?)

Discussion

Capitalism and Accounting: A Contentious Relationship

Coop des Communs:

"Based on a specific definition of capitalism, the designers of C.A.R.E. attribute a central role to accounting, establishing a determining influence of accounting on capitalism and its evolution. In doing so, it seems to us that they minimise the social relations that are fundamental to capitalism and the role they play in the evolution of this system, as well as capitalism's capacity to co-opt any social innovation that is not carried by new social relations.

In line with the concept of debt-capital which is at the heart of their accounting model, the designers of C.A.R.E., in their work "Philosophy of an Anti-Capitalist Ecology", distance themselves from the definition of capitalism based on the ownership of the means of production and production relations: "Before being characterised by production relations, modern capitalism is first characterised by conservation or preservation relations; these condition production relations."

Consequently, the preservation of the three capitals would lead to "true capitalism": "The objective of the CARE/TDL model is to pave the way for an exit from this system while preserving an innovative market economy, but under the constraint of preserving the three types of capitals. It can be considered as the vector of a 'true capitalism' that will replace a truncated pseudo-capitalism that has usurped and disfigured the name of capital for centuries. In a sense, we have never been true capitalists! In these times of great ecological and human dangers, it is necessary to become 'true capitalists' in order to protect and preserve our living conditions. But to do this, we will have to dare to transform society: to dare to change not only appearances, but also to think radically differently" (Rambaud and Richard, 2022).

Beyond the ambiguity over the definition of capitalism, the debate mainly concerns the conclusion they draw from this conception and the role they attribute to accounting in capitalism: "This is why a true and effective struggle against capitalism must above all be a struggle against its inequitable accounting system that protects only financial capital, and not an anti-productivist struggle"; or a little further on in the same work: "Some accountants enabled the creation of modern capitalism. Others, perhaps, will enable its peaceful replacement by an ecological and social economy in order to avoid the outbreak of more violent revolutions." It would therefore no longer be a question of establishing a true capitalism but of exiting capitalism by relying on accountants.

By attributing an essential responsibility to accounting in changing the system, they uphold, as Bernard Colasse reminds us, a highly debated hypothesis: "they (the promoters of CARE) advocate for an 'accounting revolution' (Richard, 2020). They implicitly assume that accounting can contribute to the advent of a new economic and social system, just as it contributed in the 15th century to the birth of commercial capitalism, then in the 19th to that of industrial capitalism, and at the end of the 20th to that of financial market capitalism. Note that this is a performative hypothesis highly debated by historians: indeed, if, following Werner Sombart (1928), they note the interweaving of the evolution of accounting with that of capitalism, they do not, however, make it the driver of capitalism and, a fortiori, its sole driver (Braudel, 1979, p. 512)" (Colasse, 2025).

In their work entitled "Accounting Revolution", Alexandre Rambaud and Jacques Richard note that "all previous attempts (to CSE) intended to replace the capitalist system have failed... and even more interesting attempts such as those of the social and solidarity economy of the commons movement initiated by Elinor Ostrom" and attribute this failure to accounting: "This, and this is our thesis, is because they did not want or were unable to change capitalist accounting rationality: no exit from capitalism without a drastic change in corporate accounting" (Rambaud and Richard, 2020). This causal link would deserve to be argued; as actors in the SSE and the commons, we do not share this analysis; we rather observe that it is mainly the question of the economic model, its balance via financing corresponding to the societal responsibilities borne by these companies, that is at issue (cf. § 3.5.2.).

That accounting must evolve to exit capitalism, we are convinced of this and, from this point of view, C.A.R.E. makes perfect sense. This is moreover the analysis made by Jacques Richard in an earlier text, in which he shows how accounting evolutions have accompanied the three phases of capitalism: "Capitalism has gone through these three stages from an extremely cautious attitude to an increasingly anticipatory attitude. It has equipped itself with instruments that tend towards the appearance of increasingly short-term profits... I defend the thesis that they (the shareholders) promote a new accounting theory... One can summarise things by saying that the ideology underlying stock market practice, an ideology of conquest of future time, first won over the minds of neoclassical economists before contaminating, through them, accountants, after a long resistance from the latter...

In the context of globalisation, the objective was to ensure that investors could compare performance from one country to another on a global scale. It was, in a word, about creating the global market. Accounting was naturally called upon to play a role in this comparison of performance. Initially, the United States remained behind in this accounting standardisation movement...

There is, moreover, nothing more remarkable in capitalism than the way it concerns itself with maintaining its sole capital, financial capital. It has equipped itself with instruments to do so, the main one being what is called 'depreciation' (Richard, 2010)."

This is also the analysis of Eve Chiapello regarding the birth of the concept of capitalism: "Rational accounting is not one institution among others of rational capitalism, but it is the institution par excellence... It does not give birth to capitalism, but its existence is a sign of capitalism, because it needs all the other institutions of capitalism (free labour market, significant monetary circuits, calculability, etc.) to function" (Chiapello, 2005).

Ultimately, "The history of accounting shows that its object has continually evolved to coexist with the different forms of capitalism. If the will is to move towards a 'green capitalism', the object of accounting should evolve to become an instrument of information and dialogue to support not only the ecological transition but also the social challenges of the digital age" (Godowski et al., 2024).

Another point of debate in Rambaud and Richard's analysis is the absence of mention of social relations: "The initial intuition of the reconstructors of accounting is correct: accounting is not neutral, its function is to 'serve on a plate', so to speak, profit. But one must not exaggerate its performative effect: it may shape our minds by making us believe that profit is the decisive element in the future of society, but it is not accounting that determines that future. Capitalism will not be changed by manipulating numbers; it is capitalism that adapts numbers to its own standards, which reflect the dominant social relations of production" (Harribey, 2022).

This analysis is shared by other economists: "If private or national accounts shape our perception of the economy, they are only an instrument that actors use to settle their conflicts... Changing society is not as simple as changing accounting rules... (because these) are far from exhausting what guides the functioning of societies, theoretical representations or ideologies... which are the product of institutions, of which accounting is a part, but which go beyond it... Accounting rules are only symptoms of relations of domination and instruments among others for resolving conflicts. Their modification does not allow us to avoid these conflicts" (Timbeau, 2022).

For this, the step to be taken is significant, as Jacques Richard acknowledges: "It is true that very powerful forces would be needed to challenge the calculation of results as it is today" (Richard, 2010).

Consequently, the formula "let's transform accounting to transform society" which is sometimes used in communication around C.A.R.E. should be questioned. If we want to talk about the transformation of capitalism, or even its transcendence, it seems essential to analyse the production relations within which contradictions between social classes are woven:

"There will be no passage from capitalism to post-capitalism without strong social conflict... It is through the articulation between these three modalities of transformation - conflict, reform, and extension of real utopias - that we can imagine a transition" (Baschet and JeanPierre, 2026).

"Without imagining that accounting can change the world, it is at least important to ask in which direction it operates. 'Which side are you on?', American trade unionists once sang" (Lemarchand and Nikitin, 2009).

Unless we rely on the emergence of an "ecological class" which would have, in a long-term vision, the objective of "restricting the place of social relations of production and re-embedding them in the search for conditions of habitability". One can measure the task to be accomplished by this ecological class which will have to "define itself as the majority" by challenging "the legitimacy of the former ruling classes" while claiming their support because it will be "indispensable for accepting the immense sacrifices through which we will have to pass, to change the regime" (Latour and Schultz, 2022).

Finally, one should not underestimate capitalism's capacity to co-opt and transform social innovations to its advantage, or even to make them fail: "Bigoni and Mohammed (2023) assert that accounting reform attempts are doomed to failure. Drawing on Deleuze and Guattari (1972) in Anti-Oedipus, they note that capitalism integrates critique as a motor of its own overcoming. It thus transforms any limit that one might seek to take into account into a profit opportunity, thereby continuing the systematic externalisation of the environmental and social costs it produces" (Musseau-Milesi, 2025).

One should therefore not rule out the hypothesis that, contrary to the wish of C.A.R.E.'s designers - "the peaceful replacement (of capitalism) by an ecological and social economy" (Rambaud and Richard, 2022) - "capitalism will not hand over the keys nicely" (Lordon, 2019)."

(https://nextcloud.coopdescommuns.org/index.php/s/XgssJY9q9J8ZmYw?)

Which Accounting for the Commons?

The Commons and Accounting group of La Coop des Communs:

"On the margins of the dominant system, the commons demonstrate both their potential—particularly in the face of failing public services in local territories (La Coop des Communs, 2024), the possibility of common action in service of concerns essential to the survival of the community of the living, at a time when withdrawal tends to dominate—and their fragility, linked to democratic governance that is often difficult to maintain over time when the activists from the early days withdraw, and to a socio-economic model that is underfunded and poorly financed. But also the difficulty of highlighting (showing and valuing) their functioning, their actions and the effects of these, of counting everything that matters for the commons.

At this stage of the GCC's work, it appears that we have not identified the accounting model that fully meets this objective.

Admittedly, the principles and approach of C.A.R.E. present many convergences with the commons approach:

• ecology and the preservation of ecosystems as a key element of their identity (La Coop des Communs, 2024),

• the central place of the people concerned in defining what matters within the community, and in its governance,

• the necessary modification of the hierarchy of decision-making criteria that places the objective of care and democracy at the heart of decisions on what and how to produce, by redesigning the governance of organisations,

• the construction of conventional or standardised management rules, notably through a governance system decided by the community,

• the importance given to sustainable work, to the establishment of dialogue spaces to define the conditions of real work,

• the disruptive potential of social innovations carried by C.A.R.E. and by certain commons,

• the underestimation of the place of social relations in governance and in the dynamics of organisations, both in E. Ostrom and among the designers of C.A.R.E.; conversely, commoners as well as C.A.R.E. experimenters cannot ignore this.

However, the commons need to represent, to have recognised and to report on:

• the practice of the commons through a recognition of commoning,

• the relationships between the producer (employee, volunteer) and the consumer/user, and the contribution of the latter to production,

• the processes that allow the commons to exist and to endure,

• the effects (particularly positive) that they produce on their ecosystems, in their territories.

This is precisely the essence of the commons approach to demonstrate these things.

In addition to socio-environmental accounting, other approaches that integrate these concerns need to be explored and even experimented with, such as ecosystem-centred accounting, ethnocomptability (ethno-accounting) or the communality scale:

• by helping public and private actors to organise among themselves, to share costs and efforts, and to track their commitments to preserving the ecosystems in which they operate, the research project (and the experiments) on ecosystem-centred accounting aims to "become a support for dialogue and for organising action in a diversity of collective contexts." In doing so, "accounting, far from being a simple technique, fully regains its heuristic and political function" (Rambaud and Feger, 2022). Ecosystem-centred accounting could meet the expectations of public actors who wish to better grasp complex issues, such as ZAN (Zero Net Artificialisation) and support for urban and peri-urban agriculture. It therefore opens the possibility of becoming a key tool for articulating public action and the practice of the commons (La Coop des Communs, 2025),

• critiques of "quantofrenia" (Jany-Catrice, 2011) challenge the postulate that "if it's not in the accounts, it's not taken into account," arguing that what we care about is also defined in practices without measurement: gestures and words that demonstrate attachment, or even judgments (saying whether we agree or disagree). From this point of view, research in ethnocomptability aims "to rediscover the multiple dimensions of evaluation and not to treat economic value separately from other evaluations of everyday life," even if "taking into account what people take into account is a simplicity to be conquered, as it has the characteristics of a detoxification" (Cottereau, 2016).

• for a community, the communality scale (Rochfeld et al., 2021) is characterised by the identification of three common interests—preservation of the good over time, access to the good, participation in its governance—and the degree of inclusiveness with regard to these common interests. It proposes to organise relationships between people around three legal bodies: the "community of use" for people who can access and/or enjoy a good, the "deliberative community" composed of people authorised to participate in governance relating to the good, and the "control community" designating the community authorised to defend respect for usage rights. This articulation between open property rights and uses could be mobilised by an alternative accounting approach that equips both the management of collective property or a public domain and the preservation of a common good."

((https://nextcloud.coopdescommuns.org/index.php/s/XgssJY9q9J8ZmYw?))

More information

French-language Bibliography

Bibliographie de base (ordre chronologique)

• Pearce D (1976) The limits of cost benefit analysis as a

guide to environmental policy .Kyklos , vol 29-Fasc 1, 97-112.

• Richard J (2012) Comptabilité et développement

durable Ed Economica .

• Richard J et Plot E (2014) La gestion

environnementale . Ed La Découverte.

• Gadrey J et Lalucq (2015) « Faut il donner un prix à la

nature? » Les Petits Matins . Institut Veblen

• Rambaud A (2015) La valeur d’existence en

Comptabilité Thèse Université Paris Dauphine Dir J Richard.

• Rambaud A et Richard J (2015) « The triple

depreciation line instead of the triple bottom line: toward a genuine integrated reporting » CPA, Dec.187

• Rambaud A et Richard J (2015) Sustainability, Finance

and Accounting: from the today’s Fisherian model(Falsified) Hicksian perspective to a traditional accounting approach Working Paper. Presented at the ACRN Oxford Session 10/6/2015

• Richard J (2015a) « Refonder l’entreprise » in Vol 19

du Centre Français de Droit Comparé (175-216)

• Richard J (2015b) « The dangerous dynamics of

capitalism : from static towards futuristic IFRS accounting » Critical Perspectives on accounting (CPA),30,9-34

• Pottier A (2016) comment les économistes réchauffent

la planète . Anthropocène Seuil

• Rambaud A and Richard J (2017) « the triple

depreciation line accounting model and its application to the human capital. In S Alijani and C Karyotis Ed: Finance and economy for Society: integrating Sustainability. Emerald Press

Thèses sur la comptabilité écologique en lien avec CARE

– Altukhova Y (2013) Comptabilité agricole et développement durable. Etude comparative de la France et de la Russie. (Dir J.Richard) . Un Paris Dauphine – Bicalho T (2013) Les limites de l’ACV: étude de la soutenabilité d’un biodiesel issu de l’huile de palme brésilienne (Dir J Richard). Un Paris Dauphine – Feger C (2016) Nouvelles comptabilités au service des écosystèmes (Dir L Mermet) AgroParisTech – Ionescu C (2016) Biodiversité et stratégie des organisations: construire des outils pour gérer des relations multiples et inter-temporelles. (Dir M Trommetter) Université de Grenoble Alpes. – Morlat C (2016) Modélisation dynamique des systèmes de coûts pour une gestion durable des territoires. (Dir S Faucheux et K Pinto-Silva) Un Versailles Saint Quentin

• Wang XR (2016) The clash of environmentalism, neoliberalism , and socialism: a research on practices and ideologies in China’s sustainability accounting for agriculture. (Dir J. Richard) Un Paris Dauphine • Bardy J (2018) Le concept comptable de passif environnemental, miroir du risque environnemental de l’entreprise . Thèse en droit. Dir G. Martin . Université Côte d’Azur