Social accounting
is a financial measurement method that assesses a corporation's responsibility to the environment outside of its traditional marketplace. This method is quite different than traditional financial accounting. Social accounting applies to nonmarket organizations as well, such as special interest groups, government entities and similar groups.
In short, social accounting attempts to assess the impact of businesses---both large and small---on the natural environment and society in general.
Society
While social accounting falls under a large umbrella, it can have a different focus or form. One form of social accounting is measuring the effect of corporations on individual members in a society. While the traditional focus of business is to make profits, social accounting focuses on how companies improve the lives of individuals in the general public. In social accounting, corporations measure how well they improve society and remain relevant to people and communities who may not have a financial investment in the organization.
Environmental
Environmental accounting focuses on an organization's impact on the natural resources around the company. This involves measuring the use of natural materials and the impact its processes might have on the immedicate environment and wildlife. Business organizations can "go green" and use renewable power sources or recyclable packaging to improve their social accounting framework. This also works to promote goodwill among consumers who share the same environmental values.
Economic
Business organizations may also use social accounting to provide information on their overall impact on a nation's economy. This may involve improving education for individuals, using local resources rather than importing goods and the effects on their nation's gross domestic product. The impact of business on a nation's economic health goes far beyond dollars. Organizations that can measure the positive impact of their operations on the economy can promote themselves as socially and economically responsible.
