What if Washington held companies accountable for their impact on people and planet?
WHERE WE ARE TODAY
We have poor job opportunities and a dangerous climate trajectory. Forty four percent of Americans age 18 to 64 (about 53 million people) are low-wage workers with limited opportunities, according to a Brookings Institution report. And few net zero targets are being regulated at the national or state level. Most are managed in the private sector, where actions are voluntary.
WHERE WE NEED TO BE
100% good, family-sustaining jobs and real-world strategies to get to net zero emissions while reducing economic risks to sectors and communities.
HOW WE GET THERE:
Let’s reimagine accounting standards to improve the relationship between profit, people, and planet. Those who want to invest in climate solutions and good, family-sustaining jobs should be asking how we can move from a marginally effective voluntary regime to a viable market capable of achieving net zero and creating good, stable American jobs.
Aside from government employees, businesses employ 85% of people — half of which work for small businesses. These businesses can play a huge role in reducing carbon emissions. They have a profound impact on the people who work for them and the stability of our planet.
We must update our accounting methods so that impact is tracked and either rewarded or penalized. I would form a Reimagining Accounting Team responsible for ensuring domestic and international accounting standards better reflect the connection between people, planet, and profit. The team would consist of 7-10 people with leaders from Securities & Exchange Commission, the Federal Accounting Standards Board (FASB), The International Accounting Standards Board (FASB), The MIT Good Jobs Institute, and the Steyer Center for Energy and Finance.
Step 1: Mandate reporting and develop a Human Capital Tax Credit towards training, living wages, childcare, and healthcare.
- Establish a Human Capital Tax Credit similar to the federal R&D Tax Credit and modeled after the Investing in American Workers Act. To qualify, businesses would report spending on training and benefits for workers who earn below a given threshold. A portion of this spending would qualify as a credit to either income, payroll, or alternative minimum taxes.
- Owner: SEC and FASB, IASB
Step 2: Create a mandated Emissions Liability Management program
- Build the foundation necessary to move from voluntary and sub-scale climate action to mandatory disclosure regimes and robust carbon markets. Account for emissions as supply chain liabilities and present a pathway for what we call Emissions Liability Management (ELM), akin to traditional balance sheet management.
- Owner: SEC and FASB, IASB