MULTI DIMENSION IMPACT ACCOUNTING
File: MDIA-p3-03-PERSPECTIVES-150420.odp Peter Burgess (c) All rights reserved
MDIA
PERS...
TRIPLE BOTTOM LINE (TBL)
This idea of the TBL is that a company
should not only be looking at the 'profit'
performance but...
PERSPECTIVES
A unique object can look very different
depending on the position of the observer.
Multiple perspectives are ...
PERSPECTIVES
The next slide is very simplistic … but the
top view of this solid object has the object
looking like an elli...
MULTI DIMENSION IMPACT ACCOUNTING
SIDE VIEW
TOP VIEW
S
I
D
E
V
I
E
W
The next 4 slides
● Graphic with PEOPLE at the center
● With ORGANIZATION at the center;
● With PRODUCT at the center;
● W...
MULTI DIMENSION IMPACT ACCOUNTING
Putting PEOPLE at the Center
MULTI DIMENSION IMPACT ACCOUNTING
Putting ORGANIZATION at the Center
MULTI DIMENSION IMPACT ACCOUNTING
Putting PRODUCT at the Center
MULTI DIMENSION IMPACT ACCOUNTING
Putting PLACE at the Center
THE CHALLENGE
The challenge is to have a data system
that is meaningful from every perspective
of the socio-enviro-economi...
THE TVM-MDIA SOLUTION
● MDIA uses concepts from conventional
double entry accounting where there
are both Balance Sheet an...
THE METRIC SOLUTION (cont.)
● This MDIA building block will aggregate
to enable summary reporting; and
● enable drill down...
SOCIO-ENVIRO-ECONOMIC
● SOCIO is a PEOPLE perspective.
Everything should result in people
progressing.
● ENVIRO is about N...
YELLOW:
The PEOPLE piece … Human Capital
DIRTY BROWN:
The ECONOMIC piece … Man Built Capital
GREEN:
NATURE, ENVIRONMENT … ...
MULTI DIMENSION IMPACT ACCOUNTING
MULTI DIMENSION IMPACT ACCOUNTING
MULTI DIMENSION IMPACT ACCOUNTING
MULTI DIMENSION IMPACT ACCOUNTING
MULTI DIMENSION IMPACT ACCOUNTING
MULTI DIMENSION IMPACT ACCOUNTING
Trajectory to disaster!
This must be changed
to give this …
MULTI DIMENSION IMPACT ACCOUNTING
MULTI DIMENSION IMPACT ACCOUNTING
PEOPLE progressing
MBSS efficient
PLANET healthy
MULTI DIMENSION IMPACT ACCOUNTING
SO …
What is the PEOPLE perspective?
What is the ORGANIZATION perspective?
What is the PRODUCT perspective?
What is the PL...
Part of the answer is
BETTER METRICS
MULTI DIMENSION IMPACT ACCOUNTING
The next slide shows the
components of the system
by segment
MULTI DIMENSION IMPACT ACCOUNTING
MULTI DIMENSION IMPACT ACCOUNTING
ELEMENTS OF THE SYSTEM by SEGMENT
Financial
Capital
Human
Capital
Man Built
Structures
&...
Note that FINANCIAL CAPITAL has
been separated out from the other
parts of the MBSS segment
Note also the addition of SUN ...
THE NEXT SLIDE SHOWS:
(1) … STATE at the Beginning of the
Period (BOP)
(2) … STATE at the End of Period (EOP)
(3) … a fina...
MULTI DIMENSION IMPACT ACCOUNTING
Sun
FINANCIAL
P&L ACCOUNT
Financial Accounts describe Economic Activity
REVENUES
Product...
But the financial accounts are only
about money transactions, nothing
about impact on people and planet
and externalities ...
MULTI DIMENSION IMPACT ACCOUNTING
Sun
BOP EOP
Sun
Financial
Capital
Human
Capital
Man Built
Structures
& Systems
Natural
C...
MULTI DIMENSION IMPACT ACCOUNTING
Sun
BOP EOP
Sun
Financial
Capital
Human
Capital
Man Built
Structures
& Systems
Natural
C...
MULTI DIMENSION IMPACT ACCOUNTING
Sun
FINANCIAL
P&L ACCOUNT
Financial Accounts describe Economic Activity
REVENUES
Product...
MULTI DIMENSION IMPACT ACCOUNTING
Sun
ADD positive impact not accounted forBOP EOP
REVENUES
Products Sold X Price
VALUE to...
MULTI DIMENSION IMPACT ACCOUNTING
Sun
DEDUCT negative impact not accounted forBOP EOP
For products and
energy bought
and t...
MULTI DIMENSION IMPACT ACCOUNTING
Sun
ACCOUNTING FOR EVERYTHINGBOP EOP
REVENUES
Products Sold X Price
VALUE to buyer
Equal...
This framework needs to be applied to
everything:
● for ORGANIZATIONS (PROFIT);
● for PEOPLE;
● for PLACE … and ENVIRONMEN...
This framework needs to be applied as a
PEOPLE perspective:
(1) … STATE (quality of life) at the Beginning of
the Period (...
This framework needs to be applied as a
ORGANIZATION and investor view:
(1) … STATE (balance sheet) at the Beginning
of th...
This framework needs to be applied as a
PLACE perspective:
(1) … state of the place at the Beginning of
the Period (BOP)
(...
FOR A PRODUCT
A product flows through a life cycle that includes
supply chain, use, and post use waste chain.
In the proce...
http://truevaluemetrics.org
MULTI DIMENSION IMPACT ACCOUNTING
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Mdia p3-03-perspectives-150420

  1. 1. MULTI DIMENSION IMPACT ACCOUNTING File: MDIA-p3-03-PERSPECTIVES-150420.odp Peter Burgess (c) All rights reserved MDIA PERSPECTIVES
  2. 2. TRIPLE BOTTOM LINE (TBL) This idea of the TBL is that a company should not only be looking at the 'profit' performance but also impact on people and planet: ● PROFIT; ● PEOPLE; ● PLANET. This good, but it is only the perspective of the ORGANIZATION. MULTI DIMENSION IMPACT ACCOUNTING
  3. 3. PERSPECTIVES A unique object can look very different depending on the position of the observer. Multiple perspectives are essential: ● a PEOPLE perspective; ● an ORGANIZATION perspective; ● a PRODUCT perspective; ● a PLACE perspective; ● etc. MULTI DIMENSION IMPACT ACCOUNTING
  4. 4. PERSPECTIVES The next slide is very simplistic … but the top view of this solid object has the object looking like an ellipse while the side views show the object as a rectangle with different lengths depending on which side is being observed. MULTI DIMENSION IMPACT ACCOUNTING
  5. 5. MULTI DIMENSION IMPACT ACCOUNTING SIDE VIEW TOP VIEW S I D E V I E W
  6. 6. The next 4 slides ● Graphic with PEOPLE at the center ● With ORGANIZATION at the center; ● With PRODUCT at the center; ● With PLACE at the center. MULTI DIMENSION IMPACT ACCOUNTING
  7. 7. MULTI DIMENSION IMPACT ACCOUNTING Putting PEOPLE at the Center
  8. 8. MULTI DIMENSION IMPACT ACCOUNTING Putting ORGANIZATION at the Center
  9. 9. MULTI DIMENSION IMPACT ACCOUNTING Putting PRODUCT at the Center
  10. 10. MULTI DIMENSION IMPACT ACCOUNTING Putting PLACE at the Center
  11. 11. THE CHALLENGE The challenge is to have a data system that is meaningful from every perspective of the socio-enviro-economic-system. Hence, the need for a Multi Dimension and Multi Perspective data framework. MULTI DIMENSION IMPACT ACCOUNTING
  12. 12. THE TVM-MDIA SOLUTION ● MDIA uses concepts from conventional double entry accounting where there are both Balance Sheet and Profit and Loss Accounts. ● The building block for MDIA is similar: … State1-Flow-Process-Flow-State2 that can be applied to every economic activity in any setting anywhere. MULTI DIMENSION IMPACT ACCOUNTING
  13. 13. THE METRIC SOLUTION (cont.) ● This MDIA building block will aggregate to enable summary reporting; and ● enable drill down to activities that are relevant at any and all subsidiary levels down to the individual level. MULTI DIMENSION IMPACT ACCOUNTING
  14. 14. SOCIO-ENVIRO-ECONOMIC ● 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 the man built structures and systems (MBSS) that have been built to enable progress. MULTI DIMENSION IMPACT ACCOUNTING
  15. 15. YELLOW: The PEOPLE piece … Human Capital DIRTY BROWN: The ECONOMIC piece … Man Built Capital GREEN: NATURE, ENVIRONMENT … Natural Capital MULTI DIMENSION IMPACT ACCOUNTING COLOR KEY
  16. 16. MULTI DIMENSION IMPACT ACCOUNTING
  17. 17. MULTI DIMENSION IMPACT ACCOUNTING
  18. 18. MULTI DIMENSION IMPACT ACCOUNTING
  19. 19. MULTI DIMENSION IMPACT ACCOUNTING
  20. 20. MULTI DIMENSION IMPACT ACCOUNTING
  21. 21. MULTI DIMENSION IMPACT ACCOUNTING
  22. 22. Trajectory to disaster! This must be changed to give this … MULTI DIMENSION IMPACT ACCOUNTING
  23. 23. MULTI DIMENSION IMPACT ACCOUNTING
  24. 24. PEOPLE progressing MBSS efficient PLANET healthy MULTI DIMENSION IMPACT ACCOUNTING
  25. 25. SO … What is the PEOPLE perspective? What is the ORGANIZATION perspective? What is the PRODUCT perspective? What is the PLACE perspective? How must the MBSS be changed to get the best possible results? How can PEOPLE make better decisions? MULTI DIMENSION IMPACT ACCOUNTING
  26. 26. Part of the answer is BETTER METRICS MULTI DIMENSION IMPACT ACCOUNTING
  27. 27. The next slide shows the components of the system by segment MULTI DIMENSION IMPACT ACCOUNTING
  28. 28. MULTI DIMENSION IMPACT ACCOUNTING ELEMENTS OF THE SYSTEM by SEGMENT Financial Capital Human Capital Man Built Structures & Systems Natural Capital Sun Financial Capital Human Capital Man Built Structures & Systems 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
  29. 29. Note that FINANCIAL CAPITAL has been separated out from the other parts of the MBSS segment Note also the addition of SUN to enable metrics about renewables MULTI DIMENSION IMPACT ACCOUNTING
  30. 30. THE NEXT SLIDE SHOWS: (1) … STATE at the Beginning of the Period (BOP) (2) … STATE at the End of Period (EOP) (3) … a financial profit and loss about the economic activity or flow that links the two states MULTI DIMENSION IMPACT ACCOUNTING
  31. 31. MULTI DIMENSION IMPACT ACCOUNTING Sun FINANCIAL P&L ACCOUNT Financial Accounts describe Economic Activity REVENUES Products Sold X Price Products Bought X Price BOP EOP Energy Bought X Price Employee Benefits Employee Payroll Other expenditures Asset use costs Depreciation Financial expenses Pro-good expenditures Taxation PROFITSun Financial Capital Human Capital Man Built Structures & Systems Natural Capital Sun SunSun Financial Capital Human Capital Man Built Structures & Systems Natural Capital Sun COSTS
  32. 32. But the financial accounts are only about money transactions, nothing about impact on people and planet and externalities ignored! Financial accounts are mostly from the perspective of an organization and for investors. MULTI DIMENSION IMPACT ACCOUNTING
  33. 33. MULTI DIMENSION IMPACT ACCOUNTING Sun BOP EOP Sun Financial Capital Human Capital Man Built Structures & Systems Natural Capital Sun SunSun Financial Capital Human Capital Man Built Structures & Systems Natural Capital Sun Financial Accounts describe Economic Activity Financial Costs Financial Profit Financial Revenues Financial Balance Sheet BOP Financial Balance Sheet EOP
  34. 34. MULTI DIMENSION IMPACT ACCOUNTING Sun BOP EOP Sun Financial Capital Human Capital Man Built Structures & Systems Natural Capital Sun SunSun Financial Capital Human Capital Man Built Structures & Systems Natural Capital Sun FINANCIAL ACCOUNTS DESCRIBE ECONOMIC ACTIVITY IN FINANCIAL OR MONEY TERMS WHILE COMPLETELY IGNORING IMPACT ON EVERYTHING ELSE Financial Accounts describe Economic Activity
  35. 35. MULTI DIMENSION IMPACT ACCOUNTING Sun FINANCIAL P&L ACCOUNT Financial Accounts describe Economic Activity REVENUES Products Sold X Price Products Bought X Price BOP EOP Energy Bought X Price Employee Benefits Employee Payroll Other expenditures Asset use costs Depreciation Financial expenses Pro-good expenditures Taxation PROFITSun Financial Capital Human Capital Man Built Structures & Systems Natural Capital Sun SunSun Financial Capital Human Capital Man Built Structures & Systems Natural Capital Sun COSTS
  36. 36. MULTI DIMENSION IMPACT ACCOUNTING Sun ADD positive impact not accounted forBOP EOP REVENUES Products Sold X Price VALUE to buyer Equals HUMAN CAPITAL ADD Wages and benefits What value to employee? Pro-good expenditures What value to society? Taxation What value to society? POSITIVE IMPACT NOT ACCOUNTED FOR Financial Capital Human Capital Man Built Structures & Systems Natural Capital Sun Sun Financial Capital Human Capital Man Built Structures & Systems Natural Capital Sun FINANCIAL P&L ACCOUNT REVENUES Products Sold X Price Products Bought X Price Energy Bought X Price Employee Benefits Employee Payroll Other expenditures Asset use costs Depreciation Financial expenses Pro-good expenditures Taxation PROFIT COSTS
  37. 37. MULTI DIMENSION IMPACT ACCOUNTING Sun DEDUCT negative impact not accounted forBOP EOP For products and energy bought and this process Free use of the commons and public services & infrastructure Degradation of land Water scarcity and degradation Air pollution: Impact on people Air pollution: Impact on climate Air pollution: Impact on people Solid waste Resource depletion Environmental Degradation Negative impact File: MDIA-Framework-004-150411-WIP.odp Peter Burgess (c) All rights reserved Financial Capital Human Capital Man Built Structures & Systems Natural Capital Sun Sun Financial Capital Human Capital Man Built Structures & Systems Natural Capital Sun FINANCIAL P&L ACCOUNT REVENUES Products Sold X Price Products Bought X Price Energy Bought X Price Employee Benefits Employee Payroll Other expenditures Asset use costs Depreciation Financial expenses Pro-good expenditures Taxation PROFIT COSTS
  38. 38. MULTI DIMENSION IMPACT ACCOUNTING Sun ACCOUNTING FOR EVERYTHINGBOP EOP REVENUES Products Sold X Price VALUE to buyer Equals HUMAN CAPITAL ADD Wages and benefits What value to employee? Pro-good expenditures What value to society? Taxation What value to society? For products and energy bought and this process Free use of the commons and public services & infrastructure Degradation of land Water scarcity and degradation Air pollution: Impact on people Air pollution: Impact on climate Air pollution: Impact on people Solid waste Resource depletion Environmental Degradation POSITIVE IMPACT NOT ACCOUNTED FOR Negative impact Financial Capital Human Capital Man Built Structures & Systems Natural Capital Sun Sun Financial Capital Human Capital Man Built Structures & Systems Natural Capital Sun FINANCIAL P&L ACCOUNT REVENUES Products Sold X Price Products Bought X Price Energy Bought X Price Employee Benefits Employee Payroll Other expenditures Asset use costs Depreciation Financial expenses Pro-good expenditures Taxation PROFIT COSTS
  39. 39. This framework needs to be applied to everything: ● for ORGANIZATIONS (PROFIT); ● for PEOPLE; ● for PLACE … and ENVIRONMENT; ● for PRODUCT. MULTI DIMENSION IMPACT ACCOUNTING
  40. 40. This framework needs to be applied as a PEOPLE perspective: (1) … STATE (quality of life) at the Beginning of the Period (BOP) (2) … STATE (quality of life) at the End of the Period (EOP) (3) … all the activities or flows that had impact and changed the state (quality of life) during the period MULTI DIMENSION IMPACT ACCOUNTING
  41. 41. This framework needs to be applied as a ORGANIZATION and investor view: (1) … STATE (balance sheet) at the Beginning of the Period (BOP) (2) … STATE (balance sheet ) at the End of the Period (EOP) (3) … all the activities or flows that had impact and changed the state (balance sheet) during the period MULTI DIMENSION IMPACT ACCOUNTING
  42. 42. This framework needs to be applied as a PLACE perspective: (1) … state of the place at the Beginning of the Period (BOP) (2) … state of the place at the End of the Period (EOP) (3) … all the activities or flows that had impact and changed the state of the place during the period MULTI DIMENSION IMPACT ACCOUNTING
  43. 43. FOR A PRODUCT A product flows through a life cycle that includes supply chain, use, and post use waste chain. In the process there is impact on people, place and organization … and there is impact on people, profit and planet. PRODUCT, that is goods and services, is the link that connects everything AND helps deliver Quality of Life for PEOPLE MULTI DIMENSION IMPACT ACCOUNTING
  44. 44. http://truevaluemetrics.org MULTI DIMENSION IMPACT ACCOUNTING

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