Listen And Understand

Pressure from consumers during the 1970s to get large companies to become more ethically and socially constructive made an impression on them to the extent that we now have social accounting practices that monitor and evaluate the impact of business on the environment, society and the economy. At first it had an adverse effect as large companies tried to keep sensitive information hidden. Now many corporation and enterprises of all sizes are seriously interested in assessing their social impact. Social accounting is one way of assessing whether a business is meeting its stated ethical and social goals. The Institute for Social and Ethical Accountability has developed the AA1000 which is not an enforceable and compliance based standard but a set of principles to stimulate innovation above an agreed quality floor. The social accounting process includes accounting data collection and analysis, independent auditing and dissemination of results. It encourages people to take impact assessment seriously. It can be put into a social audit. It can be used to show how a business works regarding social indicators. It can lead to learning and change. The social accounting matrix is a tool which can be used to elaborate the linkages between supply and use tables and institutional sector accounts linking environmental, social and economic data with things like the distribution of earnings and sustainability.

Social accounting is one example of how important listening and proper understanding are in business and the economy. It can take some time but eventually when business listens properly they can respond in ways that lessen the social impact and communicate the message to the world.