A company can record strong profits, expand its operations and increase production while depleting natural resources and damaging ecosystems. Yet much of the environmental cost associated with these activities may never appear in its financial statements.
That is the gap Dr Rexford Attah-Boakye, Associate Professor in Accounting at the University of Bradford, believes green accounting should help address. He argues that conventional accounting gives an incomplete picture of business performance because it focuses largely on financial transactions, costs and returns without adequately capturing the environmental consequences of economic activity.
Speaking to The High Street Journal following his presentation on green accounting at the International Conference on African Development (ICAD) 2026, Dr Attah-Boakye said businesses should account not only for the profits they generate but also for the natural resources they consume and the ecological impact of their operations.
His contribution formed part of the Ghana Scholarly Society‘s call at ICAD 2026 on Green Transitions and Inclusive Industrialisation in Africa: Theory to Policy and Practice.
“Companies are not only being recognised and being applauded for the profit they make, but also the current footprint,” he said, making the case for financial performance and environmental impact to be considered together.
He explains this through two dimensions of accounting: the Monetary Capital Ledger (MCL) and the Ecological Capital Ledger (ECL). The former captures the financial side of economic activity through conventional accounting, while the latter considers how the production of goods and services affects biodiversity and the natural environment.
The two dimensions are brought together in what he terms the Convergence Ecological Capital Theory, a framework intended to integrate financial and ecological considerations into business accounting. Although still under development, the theory proposes that businesses should be assessed not only on the financial value they generate but also on the ecological consequences of their activities.
This would require companies to look beyond the environmental effects of their immediate operations. A manufacturing company, for instance, may account for the fuel consumed by its vehicles and machinery, but its footprint also includes the electricity used in its offices and factories, the raw materials it purchases, the transportation of its products and the waste generated after consumers have used them.
These impacts fall under three categories of greenhouse gas emissions. Scope 1 covers direct emissions from sources owned or controlled by a company, such as fuel burned in its vehicles or machinery. Scope 2 accounts for indirect emissions associated with purchased electricity, heating and cooling. Scope 3 extends further into the value chain, covering other indirect emissions linked to suppliers, transportation, product use and disposal.
Dr Attah-Boakye considers Scope 3 particularly important because the environmental consequences of a product can emerge far beyond the premises of the company that produced it, sometimes in countries thousands of kilometres away.
Plastic waste found along Ghana’s coastline illustrates this problem. Products manufactured elsewhere can eventually become an environmental burden in Ghana, leaving local communities and ecosystems to deal with the waste. The companies involved may have recorded revenue from selling those products, but the environmental costs are borne elsewhere.
For businesses, this means their environmental responsibility cannot end when a product leaves the factory or is sold to a consumer. Its impact continues through transportation, use and eventual disposal, making the entire supply chain relevant to any assessment of a company’s ecological footprint.
The cost of economic activity also extends beyond the market value of the natural resources extracted. Cutting down a tree, for example, does not only mean losing the timber; it also affects the birds, insects and other organisms that depend on it. The destruction of a habitat can disrupt an entire ecosystem, yet those losses are not reflected in the market price of the wood.
Dr Attah-Boakye believes businesses must therefore look beyond carbon emissions when assessing their environmental performance. Measuring greenhouse gas emissions is important, but it does not capture every consequence of production. The loss of biodiversity and destruction of natural habitats must also be considered.
A mobile phone, for instance, requires the extraction and processing of raw materials, the manufacture of its components, assembly and transportation before it reaches the consumer. Its environmental footprint continues during use, as telecommunications networks and data centres require substantial infrastructure and energy to operate. The cooling systems needed to manage heat generated by these facilities add to their energy requirements.
The production of a shirt also involves several stages, from sourcing raw materials to processing, manufacturing and transportation. Water and electricity are consumed along the way, while the eventual disposal of the garment creates further waste.
In both cases, the price paid by the consumer does not necessarily reflect the full environmental cost of producing and using the item. The financial value assigned to a product may account for materials, labour, manufacturing and distribution, while leaving out the wider ecological consequences of bringing it to market.
The gap between economic value and environmental cost is not limited to individual products or companies. Dr Attah-Boakye also questioned the reliance on Gross Domestic Product (GDP) as an indicator of national economic progress, arguing that an increase in output does not necessarily mean a country is becoming more prosperous when the depletion of its natural resources is left out of the assessment.
Industrial expansion, higher production and increased consumption can all contribute to GDP growth, even when the activities driving that growth cause pollution, deforestation and the depletion of natural resources. The resulting damage can affect agriculture, water resources, livelihoods and the ecosystems on which economic activity depends, without being adequately reflected in the headline growth figure.
For African countries seeking to expand their industrial base, the challenge is to pursue that growth while accounting for the resources consumed and the ecological damage that may result. Industrialisation can create jobs, raise incomes and increase economic output, but those gains need to be considered alongside the environmental costs of achieving them.
This calls for greater attention from both businesses and governments. Companies need to account for the environmental effects of their operations and supply chains, while policymakers need to consider natural resource depletion and ecological damage when evaluating economic performance and setting development priorities.
The convergence of monetary and ecological accounting seeks to bring these considerations into the same assessment. By examining financial returns alongside environmental impacts, businesses could gain a more complete understanding of the value they generate and the ecological costs associated with their activities.
For Dr Attah-Boakye, the central concern is that businesses and countries continue to measure success largely by what they produce and earn, without giving sufficient attention to the natural resources and ecosystems that make that production possible. Financial performance, he argues, cannot provide a complete account of prosperity if the environmental costs of generating that wealth remain outside the assessment.
