Process is at the center of performance and efficiency. In the past efficiency has been all about lower costs and more profit, but in the future optimization of performance will require equal consideration to be given to impact on society (people) and impact on environment (planet). Making this happen requires significant rethinking of the metrics so that impact is quantified in a similar way that all the money profit transactions are quantified.

1. MULTI DIMENSION IMPACT ACCOUNTING
MDIA
PROCESS
THE MAIN DETERMINANT OF
SOCIO-ENVIRO-ECONOMIC EFFICIENCY
File: MDIA-p3-12-0-PROCESS-150707.odp Peter Burgess (c) All rights reserved

2. MULTI DIMENSION IMPACT ACCOUNTING
WORK-IN-PROGRESS.
SLIDESET STILL IN DEVELOPMENT.
UPDATES WILL BE POSTED OVER
THE NEXT SEVERAL WEEKS

3. PROCESS IS EVERYWHERE ...
MULTI DIMENSION IMPACT ACCOUNTING

4. PROCESS uses inputs (labor, materials,
energy, knowhow, natural resources, etc.) and
in the process degrades the environment;
PROCESS produces PRODUCTS (goods and
services) that enable good quality of life and
living standards.
MULTI DIMENSION IMPACT ACCOUNTING

5. The EFFICIENCY of the PROCESS determines
the IMPACT on PEOPLE and PLANET.
EFFICIENCY is not only the PROFITABILTY of
the PROCESS …
… but also how much GOOD IMPACT there is
for PEOPLE …
… and how little BAD IMPACT for SOCIETY
and the ENVIRONMENT.
MULTI DIMENSION IMPACT ACCOUNTING

6. MULTI DIMENSION IMPACT ACCOUNTING
Sun
BOP
Sun
Financial
Capital
Human
Capital
Man Built
Capital
Natural
Capital
Sun SunSun
Financial
Capital
Human
Capital
Man Built
Capital
Natural
Capital
Sun
EOP
EFFICIENCY AND EFFECTIVENESS
Reference … see MDIA - CORE CONCEPTS

7. However …
MULTI DIMENSION IMPACT ACCOUNTING

8. 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
Financial accounts
describe economic
activity in financial
or money terms
while completely
ignoring impact
on everything else.

9. The next slides show how the data
architecture has to be designed in
order for IMPACT to be accounted for
in a rigorous and logical way …
MULTI DIMENSION IMPACT ACCOUNTING

10. 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
Capital
Natural
Capital
Sun SunSun
Financial
Capital
Human
Capital
Man Built
Capital
Natural
Capital
Sun
COSTS

11. 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
Capital
Natural
Capital
Sun Sun
Financial
Capital
Human
Capital
Man Built
Capital
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

12. 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
Capital
Natural
Capital
Sun Sun
Financial
Capital
Human
Capital
Man Built
Capital
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

13. 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
Capital
Natural
Capital
Sun Sun
Financial
Capital
Human
Capital
Man Built
Capital
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

14. PRODUCT AND SUPPLY CHAIN
… The MONEY dimension of the supply chain
is routine; however
… The IMPACT of the supply chain on
SOCIETY (PEOPLE) and ENVIRONMENT
(PLANET) are rarely implemented in a
coherent manner.
… This is very big next step!
MULTI DIMENSION IMPACT ACCOUNTING

15. MULTI DIMENSION IMPACT ACCOUNTING
PRODUCT … flowing through the SUPPLY CHAIN
Zero to start
Costs this stage
Profit this stage
Price this stage
Zero to start
Costs this stage
Profit this stage
Price Stage 1
FINANCIAL ACCOUNTS EACH STEP OF THE SUPPLY CHAIN
Cost =
Price stage 1
Costs Stage 2
Profit Stage 2
Cum Costs
Cum Profit
Price Stage 2
Cost =
Price stage 2
Costs Stage 3
Profit Stage 3
Cum Costs
Cum Profit
Price Stage 3
Financial
Dimension
Zero to start
Initial Stage STATE STATEFLOWFLOW

16. MULTI DIMENSION IMPACT ACCOUNTING
MBC
Natural
Capital
Human
Capital
PRODUCT … flowing through the SUPPLY CHAIN
ADJUSTMENTS TO REFLECT IMPACT (EXTERNALITIES)
Zero to start
Costs this stage
Profit this stage
Price this stage
Zero to start
Costs this stage
Profit this stage
Price Stage 1
FINANCIAL ACCOUNTS EACH STEP OF THE SUPPLY CHAIN
Cost =
Price stage 1
Costs Stage 2
Profit Stage 2
Impact
Stage 1
Impact
Stage 1
Impact
Stage 1
Cum Costs
Cum Profit
Price Stage 2
Impact
Stage 2
Impact
Stage 2
Impact
Stage 2
Cum
Impact
Cum
Impact
Cum
Impact
Cost =
Price stage 2
Costs Stage 3
Profit Stage 3
Cum Costs
Cum Profit
Price Stage 3
Impact
Stage 3
Impact
Stage 3
Impact
Stage 3
Cum
Impact
Cum
Impact
Cum
Impact
Financial
Dimension
Zero to start
Initial Stage STATE STATEFLOWFLOW

17. 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
Economic Activities
PROCESS
are responsible for
changing the
STATE
of everything

18. 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
Financial Accounts describe Economic Activity
Financial Costs
Financial Profit
Financial Revenues
Financial
Balance
Sheet
BOP
Financial
Balance
Sheet
EOP

19. The next slide shows …
… how the money P&L report describes the
impact of the money transactions on the
money balance sheet of the operation …
… while the IMPACTS of the operations on
society and the environment are ignored
because they are outside the reporting
envelope.
MULTI DIMENSION IMPACT ACCOUNTING

20. 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
Financial Accounts describe Financial Impact
Financial Costs
Financial Profit
Financial Revenues
Financial
Balance
Sheet
BOP
Financial
Balance
Sheet
EOP
Impact Accounts reflect Externalities
Balance
Sheet
Changes
Impact on Institutions
Impact on People
Impact on Society
Impact on Physical
Impact on Knowledge
Impact on Resources
Impact on Environment
Impact on EcoSystem
Balance
Sheet
Changes
Balance
Sheet
Changes
Balance
Sheet
Changes

21. A better framework for reporting
would be this …
MULTI DIMENSION IMPACT ACCOUNTING

22. 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
Financial Accounts describe Financial Impact
Financial Costs
Financial Profit
Financial Revenues
Financial
Balance
Sheet
BOP
Financial
Balance
Sheet
EOP
Impact Accounts reflect Externalities
Balance
Sheet
Changes
Impact on Institutions
Impact on People
Impact on Society
Impact on Physical
Impact on Knowledge
Impact on Resources
Impact on Environment
Impact on EcoSystem
Balance
Sheet
Changes
Balance
Sheet
Changes
Balance
Sheet
Changes

23. So think of all this miniaturized:
MULTI DIMENSION IMPACT ACCOUNTING

24. MULTI DIMENSION IMPACT ACCOUNTING
Sun
Every single PROCESS has IMPACT on EVERYTHINGBOP EOP
Sun
Financial
Capital
Human
Capital
Man Built
Capital
Natural
Capital
Sun SunSun
Financial
Capital
Human
Capital
Man Built
Capital
Natural
Capital
Sun

25. MULTI DIMENSION IMPACT ACCOUNTING
Sun
PRODUCT made by one PROCESSBOP EOP
Sun
Financial
Capital
Human
Capital
Man Built
Capital
Natural
Capital
Sun SunSun
Financial
Capital
Human
Capital
Man Built
Capital
Natural
Capital
Sun

26. 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
PRODUCT
PRODUCT … the result of a SUPPLY CHAIN … with
series of PROCESSES

27. MULTI DIMENSION IMPACT ACCOUNTING
Sun
One of the PROCESSES in a PLACEBOP EOP
Sun
Financial
Capital
Human
Capital
Man Built
Capital
Natural
Capital
Sun SunSun
Financial
Capital
Human
Capital
Man Built
Capital
Natural
Capital
Sun

28. MULTI DIMENSION IMPACT ACCOUNTING
Sun
One of the PROCESSES in a PLACE and also
a PROCESS in an ORGANIZATION
BOP EOP
Sun
Financial
Capital
Human
Capital
Man Built
Capital
Natural
Capital
Sun SunSun
Financial
Capital
Human
Capital
Man Built
Capital
Natural
Capital
Sun

29. 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
ORGANIZATION
A big ORGANIZATION is the aggregation of many
operations or PROCESSES in many PLACES

30. MULTI DIMENSION IMPACT ACCOUNTING
Sun
Everybody has a role in making this world of ours
a better place
BOP EOP
Sun
Financial
Capital
Human
Capital
Man Built
Capital
Natural
Capital
Sun SunSun
Financial
Capital
Human
Capital
Man Built
Capital
Natural
Capital
Sun
PEOPLE

31. … and specifically this mean making
all the PROCESSES that are used to
support our QUALITY OF LIFE more
efficient not only to make more
PROFIT but also to have a BETTER
IMPACT on SOCIETY (PEOPLE) and
ENVIRONMENT (PLANET).
MULTI DIMENSION IMPACT ACCOUNTING

32. For example … OIL AND GAS ...
… attention to the use of ENERGY;
… attention to the matter of EMISSIONS into the
atmosphere;
… attention to the matter of waste water and
solid matter polluting the environment;
… attention to the matter of oil pollution during
production and transportation:
… and a whole lot more.
MULTI DIMENSION IMPACT ACCOUNTING

33. MULTI DIMENSION IMPACT ACCOUNTING
Sun
BOP
Sun
Financial
Capital
Human
Capital
Man Built
Capital
Natural
Capital
Sun SunSun
Financial
Capital
Human
Capital
Man Built
Capital
Natural
Capital
Sun
EOPOIL REFINERY

34. For example … in AGRICULTURE ...
… better stewardship of WATER use;
… attention to pollution from run-off containing
fertilizers, herbicides, pesticides, etc;
… more responsible use of animal medication to
avoid risk of drug resistance important for
human health;
… the issue of worker exploitation and
workplace safety;
… and a whole lot more.
MULTI DIMENSION IMPACT ACCOUNTING

35. MULTI DIMENSION IMPACT ACCOUNTING
Sun
BOP
Sun
Financial
Capital
Human
Capital
Man Built
Capital
Natural
Capital
Sun SunSun
Financial
Capital
Human
Capital
Man Built
Capital
Natural
Capital
Sun
EOPIRRIGATION

36. For example … TRANSPORTATION ...
… attention to the use of ENERGY;
… attention to the matter of EMISSIONS into the
atmosphere;
… attention to the matter of waste water and
solid matter polluting the environment;
… and a whole lot more.
MULTI DIMENSION IMPACT ACCOUNTING

37. MULTI DIMENSION IMPACT ACCOUNTING
Sun
BOP
Sun
Financial
Capital
Human
Capital
Man Built
Capital
Natural
Capital
Sun SunSun
Financial
Capital
Human
Capital
Man Built
Capital
Natural
Capital
Sun
EOPCONTAINER SHIP

38. For example … OFFICE BUILDINGS ...
… attention to the use of ENERGY;
… attention to the matter of EMISSIONS into the
atmosphere;
… and a whole lot more.
MULTI DIMENSION IMPACT ACCOUNTING

39. MULTI DIMENSION IMPACT ACCOUNTING
Sun
BOP
Sun
Financial
Capital
Human
Capital
Man Built
Capital
Natural
Capital
Sun SunSun
Financial
Capital
Human
Capital
Man Built
Capital
Natural
Capital
Sun
EOPCITY BUILDINGS

40. For example … HEAVY INDUSTRY ...
… attention to the use of ENERGY;
… attention to the matter of EMISSIONS into the
atmosphere;
… attention to the matter of waste water and
solid matter polluting the environment;
… the issue of worker exploitation and
workplace safety;
… and a whole lot more.
MULTI DIMENSION IMPACT ACCOUNTING

41. MULTI DIMENSION IMPACT ACCOUNTING
Sun
BOP
Sun
Financial
Capital
Human
Capital
Man Built
Capital
Natural
Capital
Sun SunSun
Financial
Capital
Human
Capital
Man Built
Capital
Natural
Capital
Sun
EOPHOT STRIP ROLLING MILL

42. For example … MINING ...
… attention to the use of ENERGY;
… attention to the matter of EMISSIONS into the
atmosphere;
… degradation of the land;
… attention to the matter of waste water and
solid matter polluting the environment;
… the issue of worker exploitation and
workplace safety;
… and a whole lot more.
MULTI DIMENSION IMPACT ACCOUNTING

43. 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
GOLD MINING IN PERU

44. For example … CONSTRUCTION ...
… attention to the use of ENERGY;
… attention to the matter of EMISSIONS into the
atmosphere;
… attention to the matter of waste water and
solid matter polluting the environment;
… the issue of worker exploitation and
workplace safety;
… and a whole lot more.
MULTI DIMENSION IMPACT ACCOUNTING

45. MULTI DIMENSION IMPACT ACCOUNTING
Sun
BOP
Sun
Financial
Capital
Human
Capital
Man Built
Capital
Natural
Capital
Sun SunSun
Financial
Capital
Human
Capital
Man Built
Capital
Natural
Capital
Sun
EOPCONSTRUCTION IN THE MIDDLE EAST

46. CONCLUDING OBSERVATION ...
… more than anything else improving the
EFFICIENCY of PROCESS will change the
trajectory of global socio-enviro-economic
performance;
… in the past efficiency has simply been about
less COSTS and more PROFIT;
… in the future EFFICIENCY has to be about
better QUALITY OF LIFE for PEOPLE with
very little of no damage to the ENIRONMENT
(PLANET)
MULTI DIMENSION IMPACT ACCOUNTING

47. INTEGRATED FINANCIAL AND IMPACT
ACCOUNTING ...
… integration of financial and impact
accounting
will make it possible for very much better
decisions to be made.
… high efficiency can be rewarded and there
can be social accountability for bad practices
and low efficiency.
MULTI DIMENSION IMPACT ACCOUNTING

48. CHIEF PERFORMANCE OFFICER
Maybe in the near future it will be possible to
rename the CFO (Chief Financial Officer) to be
the CPO … the Chief Performance Officer, a
C-level position that integrates both financial
performance and the impact on society
(people) and the environment (planet).
MULTI DIMENSION IMPACT ACCOUNTING

49. Follow up: Request for Feedback
Getting these ideas fleshed out into a clear, simple but
comprehensive structure is a big job and remains a work-in-
progress. Many organizations are making progress with this,
but there is no broad universal framework yet that will enable
all the pieces to come together and work efficiently.
I would like to get feedback from anyone and everyone to
help move this initiative forward. While I have some clear
concepts about much of this architecture, there are many
details that I do not know enough about and need help. So,
please feel free to contact me (peterbnyc@gmail.com).
Please put something relevant and catchy in the subject line.
MULTI DIMENSION IMPACT ACCOUNTING

50. Some links and contact information:
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 for MDIA slidesets
http://www.truevaluemetrics.org/DBadmin/DBtxt001.php?vv1=list0200-Burgess-p3-Slidesets
MULTI DIMENSION IMPACT ACCOUNTING