Multi Dimension Impact Accounting (MDIA)

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MDIA-brief-pres-001-131013 is a 12 slide deck that described the main elements of the Multi Dimension Impact Accounting (MDIA) framework that has been developed. The purpose of MDIA is to have as much rigor about impact of economic activity on people and planet as we have in money accounting for profit and business value that flows into capital markets.

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Multi Dimension Impact Accounting (MDIA)

  1. 1. MDIA – Multi Dimension Impact Accounting MDIA – Multi Dimension Impact Accounting An initiative for radical reform of the prevailing metrics Peter Burgess peterbnyc@gmail.com Copyright (c) 2013 Peter Burgess
  2. 2. MDIA – Multi Dimension Impact Accounting MDIA – Multi Dimension Impact Accounting About Prevailing Metrics ● Singular focus on money metrics • • • ● Money profit for business Prices in capital markets for investors GDP growth for policy makers One dimension • • Financial performance of the organization Stock price of the organization ● Short term decision focus ● Metrics ignore externalities • • ● Impact on people Impact on planet GDP ignores most things that really matter Copyright (c) 2013 Peter Burgess
  3. 3. MDIA – Multi Dimension Impact Accounting MDIA – Multi Dimension Impact Accounting What Radical Reform Will Look Like ● Based on old established accounting concepts • • • Money flows: revenues, costs, profit Double entry … balance sheet and transactions Standard values … similar to standard costs ● About impact on people as well as profit for business ● About impact on planet ● Short term and long term decision focus ● Metrics include externalities • • Impact on people Impact on planet ● Multiple reporting perspectives ● Economic activity the central focus Copyright (c) 2013 Peter Burgess
  4. 4. MDIA – Multi Dimension Impact Accounting MDIA – Multi Dimension Impact Accounting Economic Activity at the Center of MDIA ● An economic activity: • • • • Is anything that uses resources and has outputs Is located in a place Is implemented by an entity … individual or organization Is associated with products ● An economic activity has impact on people ● An economic activity has impact on planet ● An economic activity produces value change for place ● Economic activity aggregates • • For the place For the implementing organization Copyright (c) 2013 Peter Burgess
  5. 5. MDIA – Multi Dimension Impact Accounting MDIA – Multi Dimension Impact Accounting Metrics for the Place ● The state of the place • • • • • ● Progress … change in state over time • • • • ● Its natural resources Its human resources Its economic activities Its public infrastructure Its organizational infrastructure Quality of life for people Impact on planet Impact on place Profit for business Performance • ● How big the progress How much net consumption of non-renewable resources Copyright (c) 2013 Peter Burgess
  6. 6. MDIA – Multi Dimension Impact Accounting MDIA – Multi Dimension Impact Accounting Metrics for the Organization ● The state of the organization • • • • • ● The money based balance sheet The human capital The value of net social valuadd Provision for net resource depletion Provision for environmental degradation Profit and impact • • • • • • The money profit Direct valuadd for people Indirect valuadd for family Indirect valuadd for community Resource depletion Environmental degradation Copyright (c) 2013 Peter Burgess
  7. 7. MDIA – Multi Dimension Impact Accounting MDIA – Multi Dimension Impact Accounting Metrics for Products ● Products are used in production • • • ● Production • • • ● There is money cost There is also the impact elements in the supply chain There is also the profit component in the supply chain Add materials Add labor Add profit Products are the output • • • • They have a price They have a perceived value to the buyer They have cumulative people impact elements They have cumulative planet impact elements ● Products have an impact during use ● Products have a post use waste chain Copyright (c) 2013 Peter Burgess
  8. 8. MDIA – Multi Dimension Impact Accounting MDIA – Multi Dimension Impact Accounting Perspectives ● Place ● Organization ● Individual (people) • • • • • As investor As employee As consumer For the family For the community ● Planet ● Product ● National economy Copyright (c) 2013 Peter Burgess
  9. 9. MDIA – Multi Dimension Impact Accounting MDIA – Multi Dimension Impact Accounting Behavior Change ● In the organization ● By the organization ● By people • • • • As investors As employees As consumers As public officials ● About the place ● About the future ● About the nation Copyright (c) 2013 Peter Burgess
  10. 10. MDIA – Multi Dimension Impact Accounting MDIA – Multi Dimension Impact Accounting Quantifying Value ● Value is very personal ● Value is very important ● The concept of standard value • ● This is the same concept used in cost accountancy … standard costs Value profiles for everyone • Use technology to 'crowdsource' all the relationships ● All values are related one to another ● Values not directly related to a money unit Copyright (c) 2013 Peter Burgess
  11. 11. MDIA – Multi Dimension Impact Accounting MDIA – Multi Dimension Impact Accounting Invitation ● MDIA is a big idea ● It facilitates radical reform of the prevailing metrics ● The next steps are mainly associated with technology • • • ● Old fashioned easy information also has value • ● How to build the standard value database How to build a database of 'state of place' How to build a database of 'impact of product' Getting this organized and into a database Please get in touch. Please help Peter Burgess – TrueValueMetrics peterbnyc@gmail.com http://www.truevaluemetrics.org Copyright (c) 2013 Peter Burgess

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