MDIA MAN BUILT CAPITAL 151010

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MAN BUILT CAPITAL comprises a whole range of things that mankind has developed over the years to make life better. The growth of knowledge over the past few hundred years has been remarkable, and this knowledge has been applied in all sorts of ways to improve quality of life. At the same time the amazing technology that has been created has also been used to do intentional damage. In addition the application of technology has also results in unintentional damage to the environment upon which everything depends.

Productivity which helps to make products available also results in unemployment and underemployment ... something not measured when business profits are computed and reported.

Society will be better off when there are better metrics that take into account not only the profit of the organization, but also the impacts on people and planet.

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  • As a member of The SUSTAIN America and SUSTAIN Global movements for establishing the common sense approach of Sustainability, I applaud Mr. Burgess for giving us a tool set to actually measure sustainable performance
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MDIA MAN BUILT CAPITAL 151010

  1. 1. MULTI DIMENSION IMPACT ACCOUNTING File: MDIA-p3-05-0-MAN-BUILT-CAPITAL-151010.odp Peter Burgess (c) All rights reserved MDIA MAN BUILT CAPITAL
  2. 2. CONTEXT This slideset is a Work-in-Progress and will be updated from time to time. It is part of a series that aims to describe the extremely complex socio-enviro-economic system that we live in, and how better metrics will make this system work better. TRUE VALUE ACCOUNTING
  3. 3. MBC … MAN BUILT CAPITAL ... is part of an extremely complex SOCIO-ENVIRO-ECONOMIC SYSTEM MULTI DIMENSION IMPACT ACCOUNTING
  4. 4. The next slides shows: MAN-BUILT CAPITAL GOVERNMENT, LAW, CITIES, INDUSTRY AND A LOT MORE MULTI DIMENSION IMPACT ACCOUNTING
  5. 5. MULTI DIMENSION IMPACT ACCOUNTING
  6. 6. MULTI DIMENSION IMPACT ACCOUNTING
  7. 7. MULTI DIMENSION IMPACT ACCOUNTING
  8. 8. MULTI DIMENSION IMPACT ACCOUNTING
  9. 9. MULTI DIMENSION IMPACT ACCOUNTING
  10. 10. MULTI DIMENSION IMPACT ACCOUNTING
  11. 11. OPPORTUNITY Everything that is MAN BUILT can be changed. 21st Century technology enables efficiency that has not been possible in the past. Better metrics will give incentive to allocating resources to phase out inefficient and damaging old processes. TRUE VALUE ACCOUNTING
  12. 12. MULTI DIMENSION IMPACT ACCOUNTING ELEMENTS OF THE SYSTEM by SEGMENT (1) Financial Capital Human Capital Man Built Capital Natural Capital Sun Financial Capital Human Capital Man Built Capital Natural Capital Sun Part of Man Built Capital (MBC) Metrics around money and wealth are everywhere Human Capital is about the Quality of Life and Standard of Living of PEOPLE, and as such, is the most important purpose of economic activity … but no metrics Man Built Capital(MBC) There are metrics for efficiency and effectiveness in private for profit organizations, but less so for the public sector and for the commons Everything is built on top of Natural Capital, that is all the resources that occur in nature, the environment in all its complexity and ecosystem services that it enables … very complex detail metrics, difficult to understand and no way to summarize these metrics and use them effectively Sun … the ultimate source of all energy
  13. 13. MULTI DIMENSION IMPACT ACCOUNTING ELEMENTS OF THE SYSTEM by SEGMENT Financial Capital Human Capital Man Built Capital Natural Capital Sun Financial Capital Human Capital Man Built Capital Natural Capital MoneyFood Government Nature (life) Sun Nature (life) Capital Market Value Water Laws. Rules Nature (life)Land Shelter Infrastructure WaterClothes Industry Nature (life)Air Health Mining Ecoservices Education EnergySkills Waste Recreation Retail Culture LogisticsReligion Knowledge Technology Security Energy Mobility Profit
  14. 14. Components of Man Built Capital: ... Financial ... Physical ... Knowledge ... Institutional MULTI DIMENSION IMPACT ACCOUNTING
  15. 15. MULTI DIMENSION IMPACT ACCOUNTING Money Government Laws/Rules Infrastructure Industry Mining Energy Waste Retail Logistics Knowledge Technology Financial Physical Knowledge Institutional Financial PhysicalKnowledgeInstitutionalMBC Water Sewer Regulations Security Private Sector Public Sector Energy Buildings Banks Capital Markets Insurance Roads Transport Land Research COMPONENTS OF MAN BUILT CAPITAL (MBC) Etc. Organizations Securitization Products
  16. 16. MULTI DIMENSION IMPACT ACCOUNTING Sun BOP EOP Sun Financial Capital Human Capital Man Built Capital Natural Capital Sun SunSun Financial Capital Human Capital Man Built Capital Natural Capital Sun Institutional Capital Physical Capital Knowledge Capital Financial Capital About Man Built Capital
  17. 17. Man Built Capital Man Built Capital … Man Built Structures and Systems (MBSS) … are everything not PEOPLE and not NATURE. MULTI DIMENSION IMPACT ACCOUNTING
  18. 18. These ALL may be changed! MULTI DIMENSION IMPACT ACCOUNTING
  19. 19. The PURPOSE of all economic activity is: (1) to enable an improved Quality of Life and Standard of Living for PEOPLE; and, (2) to do this without stressing nature and the enabling natural systems. Man Built Capital in all its manifestations have been developed and deployed to make this possible. MULTI DIMENSION IMPACT ACCOUNTING
  20. 20. SOCIO-ENVIRO-ECONOMIC ● SOCIO is Human Capital … PEOPLE; ● ENVIRO is Natural Capital … NATURE; ● ECONOMIC is everything that MONEY measures … that is MBC (Man Built Capital). MULTI DIMENSION IMPACT ACCOUNTING
  21. 21. ● SOCIO is a PEOPLE perspective. Everything should result in people progressing. ● ENVIRO is about NATURE and the ultimate source of everything that people can ever have; and, ● ECONOMIC is MAN BUILT CAPITAL … all sorts of structures and systems that have been built to enable progress. MULTI DIMENSION IMPACT ACCOUNTING
  22. 22. Financial Capital is part of Man Built Capital but separated out for the purpose of analysis because it has become such an important part of the conventional way of measuring … … specifically … (1) business profit; (2) capital market valuations; and, (3) GDP growth. MULTI DIMENSION IMPACT ACCOUNTING
  23. 23. MULTI DIMENSION IMPACT ACCOUNTING Sun BOP EOP Sun Financial Capital Human Capital Man Built Capital Natural Capital Sun SunSun Financial Capital Human Capital Man Built Capital Natural Capital Sun WHAT IS THIS? Future flows of profit determine capital market valuation. Change becomes an Increment to financial capital. This is the making of fictional or virtual wealth Debits and credits of money result in profit which Increments financial capital About Financial Capital Money Stocks and Bonds Ownership of Securities Real Estate Ownership of Physical Assets Ownership of Assets Ownership of Debt In the end, all FC is owned by people WHICH OF THESE IS RIGHT?
  24. 24. Institutional Capital comprises: ● Government Departments and Agencies; ● A framework of law; ● Systems of law enforcement and justice; ● Security capacities; ● Corporate organizations; ● Health systems; ● Education systems; ● etc. MULTI DIMENSION IMPACT ACCOUNTING
  25. 25. MULTI DIMENSION IMPACT ACCOUNTING Sun BOP EOP Sun Financial Capital Human Capital Man Built Capital Natural Capital Sun SunSun Financial Capital Human Capital Man Built Capital Natural Capital Sun Institutional Capital Physical Capital Knowledge Capital Financial Capital About Man Built Capital Institutional Capital Government, Rule of Law, Companies, Organizations. Systems for: Health Education, Banking, Social Services, Security, etc.
  26. 26. Physical Capital Some of this is owned by Corporate Organizations, some by Private People and some by the Public Sector. Ownership has been a key feature of modern capitalism … and is worthy of more study and understanding. MULTI DIMENSION IMPACT ACCOUNTING
  27. 27. Physical Capital comprises: ● Infrastructure; ● Factories; ● Machinery and equipment; ● Transports vehicles (ships, aircraft, trucks, railcars, etc.); ● Houses and apartments; ● Offices, hotels and commercial buildings; ● Computers, etc. MULTI DIMENSION IMPACT ACCOUNTING
  28. 28. MULTI DIMENSION IMPACT ACCOUNTING Sun BOP EOP Sun Financial Capital Human Capital Man Built Capital Natural Capital Sun SunSun Financial Capital Human Capital Man Built Capital Natural Capital Sun Institutional Capital Physical Capital Knowledge Capital Financial Capital About Man Built Capital Physical Capital Commercial buildings, Factory buildings, Housing, Stores, Machinery and equipment, Vehicles, Infrastructure: Roads and bridges Railroads Seaports and airports Communications Water and sewer Electricity, Oil and Gas, Hospitals, Schools. etc.
  29. 29. Knowledge Capital What we know enables productivity and performance. Some of this is shared universally and is available for free use, and some is owned by Individuals and Business entities and may be used for their private gain at the expense of society as a whole. MULTI DIMENSION IMPACT ACCOUNTING
  30. 30. Knowledge Capital Knowledge Capital is expanding rapidly … faster than at any previous time in history. Important parts of Knowledge Capital have been created with Government funds, often for military and security purposes. MULTI DIMENSION IMPACT ACCOUNTING
  31. 31. MULTI DIMENSION IMPACT ACCOUNTING Sun BOP EOP Sun Financial Capital Human Capital Man Built Capital Natural Capital Sun SunSun Financial Capital Human Capital Man Built Capital Natural Capital Sun Institutional Capital Physical Capital Knowledge Capital Financial Capital About Man Built Capital Knowledge Capital Mathematics Physics Biology Chemistry Science of materials Computer science Information technology Biotechnology Artificial intelligence Robotics
  32. 32. OWNERSHIP AND FINANCING The matter of OWNERSHIP is important in the understanding of MBC. This is especially true in connection with the financing of MBC, Capital market financing is facilitated by private ownership, but the metrics for this mean that important things cannot get done because they cannot be financed. MULTI DIMENSION IMPACT ACCOUNTING
  33. 33. Funding for Man Built Capital The funding for MBC depends on ownership. If ownership is private, then funding is facilitated by profit potential. If ownership is public (government) then funding is constrained by political will and government revenue limitations. A sad reality is that initiatives with a huge potential for good go unfunded because the dominant financial system only has focus on profit hardly at all on good. MULTI DIMENSION IMPACT ACCOUNTING
  34. 34. CONCLUSION Our future depends almost entirely on how MAN BUILT CAPITAL (MBC) is managed. KNOWLEDGE has the potential to be used to optimize PHYSICAL CAPITAL, INSTITUTIONS and SOCIETY so that impact on PEOPLE is as good as possible with as little negative impact on NATURAL CAPITAL as possible. Better metrics will help to enable these changes. MULTI DIMENSION IMPACT ACCOUNTING
  35. 35. More than anything else, this will be achieved by implementing better metrics, metrics that account not only for the profits of the organization and the impact on FINANCIAL CAPITAL, but also impact the organization has on HUMAN CAPITAL (PEOPLE) and NATURAL CAPITAL (PLANET). This is the goal of the MDIA (Multi Dimension Impact Accounting) initiative. MULTI DIMENSION IMPACT ACCOUNTING
  36. 36. REMINDER This slideset is A WORK-IN-PROGRESS. It will be upgraded periodically. It is part of a series of more than 100 slidesets. Navigation to these is available here: http://www.truevaluemetrics.org/DBadmin/DBtxt001.php?vv1=N1-Slidesets-p3 More about the True Value Metrics initiative is at: http://www.truevaluemetrics.org/DBadmin/DBtxt001.php?vv1=list0100-MainNav FEEDBACK is welcome. Please email to Peter Burgess … peterbnyc@gmail.com … with a catchy phrase in the subject line so that it gets attention, and please identify the specific slideset(s) or webpage involved. TRUE VALUE ACCOUNTING
  37. 37. THANK YOU Some links and contact information: Email Peter Burgess … peterbnyc@gmail.com Peter Burgess LinkedIn profile https://www.linkedin.com/in/peterburgess1 Link to TrueValueMetrics.org website http://www.truevaluemetrics.org/ Link to navigation to other resources: http://www.truevaluemetrics.org/DBadmin/DBtxt001.php?vv1=list0100-MainNav#1 TRUE VALUE ACCOUNTING

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