International Accounting

MSc in Accounting & Finance

Overview of Circular Accounting

Fall 2023
International
Accounting

CIRCULAR ACCOUNTING
 Course Material
1. Overview
a) Sustainable Finance
b) Circular Economy
2. Key Concepts and Principles
a) What do we mean by the Circular Economy?
b) What are the Principles behind the Sustainable Development Goals (SDGs)?
c) Can companies achieve both the Sustainable Development Goals (SDGs) and
a healthy profit?

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 Overview
• Let’s introduce Circular Accounting through the following question:

Does sustainable finance have an impact on accounting?

 A first intuition would be to answer definitely!! However, this may not be the correct question
to ask. Sustainable finance is a very broad, ambitious, and pressing topic given the
profound changes that are impacting our lives
 Corporations, NGOS, governments, individuals, etc… around the globe are striving to find
ways for making our way of living more sustainable. Recall that accounting is about
gathering, measuring, and presenting data in order to support the decision-making process
 Therefore, the correct question to ask is whether accounting can help sustainable
finance be deployed and reach its goal

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 Overview
• Let’s introduce Circular Accounting through the following question:

Does sustainable finance have an impact on accounting?

 Today, the answer is probably no because traditional accounting has not been designed to
accommodate the needs of sustainable finance
 To give you an example relating to a similar topic, Circular Accounting is fairly recent
branch of accounting that seeks to identify, measure, and report dimensions that are
fundamental for the Circular Economy

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 Overview
• Let’s introduce Circular Accounting through the following question:

Does sustainable finance have an impact on accounting?

 For example, the Circular Economy promotes the recycling of products and therefore breaks
away from the traditional linear model in which consumers purchase, consume, and bin
 Traditional accounting can help assess the value of such disposable products. However,
traditional accounting does not know how to assess the value of products that can be
recycled multiple times or that can be leased (in theory indefinitely) or marketed through
PaaS (or Product-as-a-Service, which is an approach inspired by the SaaS model used in
the software industry). In addition, product recycling is expected to have positive impacts on
society and the environment, and such benefits are typically non-quantitative factors
 Circular accounting is being developed to address those limitations (in particular, the
“Integrated Profit & Loss” and “Multi-Capital Balance Sheet” are being developed to help
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capture those difficult-to-value benefits)
 Course Material
1. Overview
a) Sustainable Finance
b) Circular Economy
2. Key Concepts and Principles
a) What do we mean by the Circular Economy?
b) What are the Principles behind the Sustainable Development Goals (SDGs)?
c) Can companies achieve both the Sustainable Development Goals (SDGs) and
a healthy profit?

7
 Key Concepts and Principles
• What do we mean by the Circular Economy?
 Please review the below LinkedIn Learning Module on the Circular Economy and
evaluate your understanding of the topic through the various quizzes offered:
 https://www.linkedin.com/learning-
login/share?account=2182636&forceAccount=false&redirect=https%3A%2F%2Fwww.linkedi
n.com%2Flearning%2Fcircular-economy-business-
strategies%3Ftrk%3Dshare_ent_url%26shareId%3DU8Bot8KUQwWgxpjCMYW8%252Fw%
253D%253D

 Additional videos and testimonials about the Circular Economy

 https://www.weforum.org/about/circular-economy-videos

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 Key Concepts and Principles
• What are the Principles behind the Sustainable Development Goals (SDGs)?
 Please review the below LinkedIn Learning Module on The Principles of Sustainable
Development:
 https://www.linkedin.com/learning-
login/share?account=2182636&forceAccount=false&redirect=https%3A%2F%2Fwww.linkedi
n.com%2Flearning%2Fprinciples-of-sustainable-
development%3Ftrk%3Dshare_ent_url%26shareId%3DjgYRCEYiR7%252BreqbcX5CQfQ%
253D%253D

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 Key Concepts and Principles
• Can companies achieve both the Sustainable Development Goals (SDGs) and a healthy profit?
 Please review the below LinkedIn Learning Module on The Business Sector and the
Sustainable Development Goals:
 https://www.linkedin.com/learning-
login/share?account=2182636&forceAccount=false&redirect=https%3A%2F%2Fwww.linkedi
n.com%2Flearning%2Fthe-business-sector-and-the-sustainable-development-
goals%3Ftrk%3Dshare_ent_url%26shareId%3Dw%252FzLOOhvQoKm%252BCPceZh9tQ
%253D%253D

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