How can we ensure financial and energy accounting and disclosures of organizations reconcile at a fundemental level? At the macro / statistical level we have environmentally extended input-output frameworks that connect the dots between sectors and help trace benefits and responsibility across the economy. In a new white paper we explore how we can achieve a rigorous linkage of energy flows to monetary flows from an individual accounting entity perspective.
The proposed integrated accounting framework imposes on energy related non-financial disclosures the same double-entry balance constraints that apply to conventional financial accounting and statements. We identify the key ingredients required for a rigorous multidimensional accounting framework in terms of concepts, postulates and design choices, and we illustrate these ideas with a worked-out example of linking financial and energy accounts.