Tackling the root cause of natural and social inequity
Rethinking Capital is the home of normative accounting. An international community of intangible assets experts and a think-tank that brings together many bright minds to co-create and to solve complex problems.
The asset foundations of the economy have shifted from industrial to intangible but the rules that govern the economy haven’t kept up. We believe that this is the root cause of climate and social inequity and therefore exist to update the rules one by one.
Accounting practice has not kept up and has become the front line of the problem. Applied to the transition to net zero for example, accounting practice treats all net zero investments as a cost on the income statement and rewards doing nothing. The incentives are upside down. And the same upside down incentives govern the whole system.
Normative accounting flips the incentives and changes the rules of the game. Applying existing technical accounting rules and standards, normative accounting is designed to be used first in decision making. Normative accounting also renews the balance sheet as the store of long-term value and provides a bridge from accounting practice to enable fair and equitable decisions.
Each of Rethinking Capital’s solutions apply normative logic to enable the institutions and practices that govern the economy to align to social expectations and norms.
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