WASTE is one of the biggest opportunities for improved performance in the modern SOCIO-ENVIRO-ECONOMIC system. Waste does not have much of a cost in conventional accounting, but the true cost of waste taking into account the impact on the environment, the huge. The conventional incentives for better performance encourage consumption, but only measure this at the point of sale ... the waste all the way through the product life cycle are ignored. Cleaning up the processes so that there is no production of waste should be a priority ... a getting consumers not to waste in another thing that needs to be done. Waste is causing untold pollution on land, in rivers and now also in the oceans. This is not the way man built systems should be functioning, and it must be fixed.

1. File: TVA-p3-00-WASTE-151010.odp Peter Burgess (c) All rights reserved
WASTE
HUGE OPPORTUNITY FOR A
BETTER PERFORMING SYSTEM
TRUE VALUE ACCOUNTING

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. WASTE exists because:
… the system is out of control;
… people are thoughtless and lazy;
… production process technology has not been
designed to minimize waste;
… companies hold themselves accountable for
costs but not about impact on the environment.
MULTI DIMENSION IMPACT ACCOUNTING

4. 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
Land Fill

5. 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
Food Waste

6. 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
Electronic Waste

7. 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
Plastic bottles

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
Plastic bottles

9. 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
Plastic waste

10. 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
Beach waste

11. MULTI DIMENSION IMPACT ACCOUNTING
Sun
Obsolete Military Aircraft
Sun
BOP
Financial
Capital
Human
Capital
Man Built
Capital
Natural
Capital
Sun SunSun
EOP
Financial
Capital
Human
Capital
Man Built
Capital
Natural
Capital
Sun

12. MULTI DIMENSION IMPACT ACCOUNTING
Sun
Obsolete Military Aircraft
Sun
BOP
Financial
Capital
Human
Capital
Man Built
Capital
Natural
Capital
Sun SunSun
EOP
Financial
Capital
Human
Capital
Man Built
Capital
Natural
Capital
Sun

13. COMPANIES MAKE WASTE
… by how their PRODUCTS are designed;
… by how they use advertising to get people to
buy more than they need;
… by how their performance metrics are all about
REVENUES and PROFIT without considering
PEOPLE and PLANET.
MULTI DIMENSION IMPACT ACCOUNTING

14. PROCESSES produce WASTE
… the processes that transform inputs into
products produce more or less waste;
… the use of fossil fuels to produce energy
results in waste (gaseous emissions, ash, etc.)
MULTI DIMENSION IMPACT ACCOUNTING

15. PRODUCT results in WASTE
… the design of a PRODUCT has a role in
reducing waste;
… decisions about manufacturing PROCESS and
SUPPLY CHAIN have a role in reducing waste;
… decisions about PRODUCT PACKAGING have
a role in reducing waste.
MULTI DIMENSION IMPACT ACCOUNTING

16. PEOPLE MAKE WASTE
… by how they buy PRODUCTS without any
reference to the related waste;
… by how they buy and use PRODUCTS with
little consideration to the matter of waste;
… by how they discard PRODUCTS after use;
… by buying too much;
… by throwing away half used products;
… by sloppy recycling or none at all.
MULTI DIMENSION IMPACT ACCOUNTING

17. SYSTEMIC ISSUES
… conventional metrics ignore all costs of waste;
… there are few incentives to reduce waste;
… recycling is usually inconvenient;
… more sales produce more PROFIT, while issue
of more waste is ignored.
MULTI DIMENSION IMPACT ACCOUNTING

18. ATMOSPHERIC WASTES
The atmosphere is a convenient dumping
ground. There are many components:
... Greenhouse gases;
... Particulates;
... Sulphur dioxide and acid rain;
... Nitrous oxides and automobile pollution;
... Natural atmospheric pollution (e.g.volcanoes);
... Aerosol propellants.
MULTI DIMENSION IMPACT ACCOUNTING

19. GREENHOUSE GASES
The Kyoto Protocol covers emissions of these six
main greenhouse gases:
... Carbon dioxide (CO2);
... Methane (CH4);
... Nitrous oxide (N2O);
... Hydrofluorocarbons (HFCs);
... Perfluorocarbons (PFCs); and
... Sulphur hexafluoride (SF6).
SHAME: The US did not sign the accord and Canada
subsequently withdrew its agreement
MULTI DIMENSION IMPACT ACCOUNTING

20. WASTEWATER
If wastewater from PROCESS contains toxins the
IMPACT on the environment can be significant,
long lasting and difficult to remediate.
e.g. Abandoned mines will pollute water for decades after they are
abandoned, killing fish and vegetation in the downstream
watershed.
MULTI DIMENSION IMPACT ACCOUNTING

21. WASTE associated with ENERGY
Air pollution has a bad impact on health and
wellness, e.g.;
… Urban smog containing particulates and noxious
compounds creates respiratory problems … rural cooking
on open fires.
Water pollution … bad impact;
… Polluted water carries many water borne diseases
including cholera, dysentery and others;
Solid Waste;
… Dangerous toxins in solid waste migrate into the supply
chain for food and leach into the groundwater.
MULTI DIMENSION IMPACT ACCOUNTING

22. 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 accounting
describes economic
activity in money
terms while completely
ignoring impact on
everything else

23. 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

24. MULTI DIMENSION IMPACT ACCOUNTING
Sun
BOP EOP
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
FINANCIAL ACCOUNTING

25. MULTI DIMENSION IMPACT ACCOUNTING
Sun
BOP 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
Funds government.
Good 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
FINANCIAL ACCOUNTING PLUS GOOD IMPACT

26. MULTI DIMENSION IMPACT ACCOUNTING
Sun
BOP 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
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
FINANCIAL ACCOUNTING LESS BAD IMPACT

27. MULTI DIMENSION IMPACT ACCOUNTING
Sun
BOP 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
Funds government.
Good 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
FINANCIAL ACCOUNTING PLUS GOOD & BAD

28. The next slide shows how the
operations of a process:
(1) through the money P&L report impact on
the money balance sheet of the
operation;
and,
(2) through the IMPACT accounts report on
the impact the operation is having on
society and the environment.
MULTI DIMENSION IMPACT ACCOUNTING

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
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

30. 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

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
University Recycling

32. SUPPLY CHAIN / LIFE CYCLE
... There is waste at every stage of the supply chain;
... Waste happens in every production process;
... Waste happens during the use of a product;
... Waste happens when a product is thrown away.
MULTI DIMENSION IMPACT ACCOUNTING

33. SUPPLY CHAIN
● The supply chain is a key part of the
modern economy;
● Supply chain has enabled much of the
low cost high profit performance of
business that is now the norm;
● Supply chain optimizes for profit;
● With prevailing laws, regulation and
metrics, optimizing for profit results
in a race to the bottom for social and
environmental impact
MULTI DIMENSION IMPACT ACCOUNTING

34. SUPPLY CHAIN
● The supply chain works when each
stage of the chain is profitable;
● The system works by every stage
aiming for maximum profit;
● Entities with the most negotiating power
make the most profit;
● However, the financial profit goal
excludes important impact issues that
are increasingly important.
MULTI DIMENSION IMPACT ACCOUNTING

35. MULTI DIMENSION IMPACT ACCOUNTING
MBC
Natural
Capital
Human
Capital
PRODUCT … the SUPPLY CHAIN
EXTERNALITIES IGNORED
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
ETC...
The supply chain optimizes through the interaction of
price for the buyer and profit for the seller … impact
on externalities is not part of the equation.

36. MULTI DIMENSION IMPACT ACCOUNTING
MBSS
Natural
Capital
Human
Capital
PRODUCT … 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

37. PROBLEM … no waste impact
metrics … only money metrics.
... The prevailing money profit metrics only
measure the money cost of production and
money revenues … components of profit
performance;
... There is nothing of equivalent power to
feedback the impact of waste into the business
performance metrics.
MULTI DIMENSION IMPACT ACCOUNTING

38. SOLUTION … must have waste
impact metrics ...
... at each stage of the PRODUCT life cycle;
... for all the entities involved in the supply chain /
life cycle, including post use recycling;
… for all the PROCESSES in the supply chain;
… for all the PEOPLE who buy and junk (waste);
… for all the PLACES where waste is processed.
MULTI DIMENSION IMPACT ACCOUNTING

39. 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:
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) involved.
http://www.truevaluemetrics.org/DBadmin/DBtxt001.php?vv1=N1-Slidesets-p3
TRUE VALUE ACCOUNTING

40. 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