There are a number of reasons why the practice of financial accounting tends to ignore the social and environmental impacts caused by organisations. In this regard, explain:

how and why the way we define assets and expenses tends to exclude the recognition of social and environmental impacts

why the entity principle is inconsistent with the principle of sustainable development

why the recognition criteria for the elements of accounting can lead to organisations not recognising environment-related obligations and associated costs

why periodic (12-month) reporting can act to discourage a business organisation from taking a longer-term view of its operations.