Impact accounting

: assessing and monetizing a firm’s impact through the lens of living wage

Abstract

The traditional economic and business models are becoming increasingly inadequate in addressing the modern inequalities and societal challenges. In order to better reflect their broader impacts on people and the planet, these models must be updated. This thesis develops a framework for implementing the emerging concept of impact accounting within companies, with a particular focus on ensuring living wages. Employing an approach that includes a literature review, expert interviews, and benchmarking, the study uncovers significant insights. The research reveals a lack of standardized methods for calculating living wages and integrating these calculations into corporate financial reporting. Furthermore, the absence of predefined indicators and the diversity in methodologies create challenges, demanding that companies draw on academic literature, their internal structures, and industry benchmarks to establish appropriate metrics. Additionally, the study highlights that many companies do not report on their wage practices, emphasizing the importance of impact measurement and accounting in response to new laws and reporting standards. The resolution of these challenges enables companies to significantly improve their social responsibility practices. This thesis makes a valuable contribution to impact accounting by providing insights and recommendations for companies seeking to incorporate living wages into their impact assessments. By advancing our understanding of how businesses can more effectively measure and report their societal impacts, this research paves the way for more equitable and sustainable economic systems.

Date of Award	25 Jun 2024
Original language	English
Awarding Institution	Universidade Católica Portuguesa
Supervisor	Nuno Moreira da Cruz (Supervisor)