MULTI DIMENSION IMPACT ACCOUNTING
File: MDIA-p3-01-2-CORE-CONCEPTS-150420.odp Peter Burgess (c) All rights reserved
MDIA
C...
MULTI DIMENSION IMPACT ACCOUNTING
WORK-IN-PROGRESS.
SLIDESET STILL IN DEVELOPMENT.
UPDATES WILL BE POSTED OVER
THE NEXT SE...
From Accountancy:
● Double Entry
● State, Process and Flow;
● State, Progress and Performance;
● Cost, Price and Value;
● ...
From Accountancy:
● Double Entry Accounting;
● State, Process and Flow;
● State, Progress and Performance;
● Cost, Price a...
Double Entry Accounting
● Double Entry Accounting is the core
strength of a good accounting system;
● Every money transact...
MULTI DIMENSION IMPACT ACCOUNTING
These 3 slides explain the concept of
STATE and FLOW …
or in accounting terms, the
BALAN...
MULTI DIMENSION IMPACT ACCOUNTING
STEADY STATE
MULTI DIMENSION IMPACT ACCOUNTING
POSITIVE PROGRESS
MULTI DIMENSION IMPACT ACCOUNTING
DETERIORATION OF STATE
These reflect …
● Steady state;
● Positive progress; and
● Deterioration of state
MULTI DIMENSION IMPACT ACCOUNTING
No information about the activities is needed
in order to understand PROGRESS
… only information about changes in STATE
MU...
Data at the Center
● Used to plan
● Used to organize
● Used to implement
● Used to monitor progress
● Used to monitor cost...
MULTI DIMENSION IMPACT ACCOUNTING
State, Progress and Performance
● State is the Balance Sheet of the entity
at a moment in time;
● Progress may be measured...
MULTI DIMENSION IMPACT ACCOUNTING
EFFICIENCY AND EFFECTIVENESS
Cost, Price and Value
● There should be clarity about what is cost
and what is price;
● A buy/sell transaction takes place...
MULTI DIMENSION IMPACT ACCOUNTING
Quantification
Putting numbers on measurements is a
vital step in enabling management and
good decision making.
● Money is...
The role of monetization
Monetization is fatally flawed as a method
for measurement.
An exchange transaction … a market …
...
Standard Value
Cost accounting is often based on a
framework of standard costs. Impact
accounting can be based on a simila...
Beyond the Reporting Entity
Most reporting is done by implementing
organizations about their own progress
and performance ...
Ignoring Externalities
Conventional accounting enables ignoring
externalities.
If there is no money transaction there is
n...
The next slide shows:
Niger Delta oil pollution … this pollution
from oil industry activities has ruined the
lives of most...
MULTI DIMENSION IMPACT ACCOUNTING
SunSun
BOP
Financial
Capital
Human
Capital
Man Built
Structures
& Systems
Natural
Capita...
The last slide showed pollution caused
by the oil and gas industry in the Niger
Delta where there was once a thriving
arti...
The next slides show:
Amazing complexity …
● Global North/Global South/Community
● Big Organizations - National and
Intern...
MULTI DIMENSION IMPACT ACCOUNTING
MULTI DIMENSION IMPACT ACCOUNTING
MULTI DIMENSION IMPACT ACCOUNTING
Feedback
● Feedback is best when it is fast
and very focused on practical
actionable response
● In this example feedback h...
MULTI DIMENSION IMPACT ACCOUNTING
Malaria in the community
● Get data / facts about malaria in the community
● This becomes the STATE – BOP*
● PLAN malaria ...
MULTI DIMENSION IMPACT ACCOUNTING
Next 2 slides
● The first slide is a simplified representation of
the State – Flow – State idea for ALL elements
of the So...
MULTI DIMENSION IMPACT ACCOUNTING
STATE - BOP STATE - EOPPERIOD ACTIVITES
MULTI DIMENSION IMPACT ACCOUNTING
STATE - BOP STATE - EOPPERIOD ACTIVITES
The makeup of:
● Human Capital;
● Financial Capital;
● Man Built Capital*; and
● Natural Capital
MULTI DIMENSION IMPACT AC...
MULTI DIMENSION IMPACT ACCOUNTING
ELEMENTS OF THE SYSTEM by SEGMENT
Financial
Capital
Human
Capital
Man Built
Capital
Natu...
STATE – FLOW (activities) – STATE
● Financial Capital;
● Human Capital;
● Man Built Capital*;
● Natural Capital;
● Sun
MUL...
MULTI DIMENSION IMPACT ACCOUNTING
Resource
Depletion
Environment
Degradation
Improves
QoL
Super Rich
Affluent
BoPyramid
In...
The next 4 slides
STATE BOP … ACTIVITY ACCOUNTING … STATE EOP
● Financial accounting:
● Financial accounting plus GOOD imp...
MULTI DIMENSION IMPACT ACCOUNTING
Sun
FINANCIAL
ACCOUNTS
Financial Accounts describe Economic Activity
REVENUES
Products S...
MULTI DIMENSION IMPACT ACCOUNTING
Sun
FINANCIAL
ACCOUNTS
ADD positive impact not accounted for
REVENUES
Products Sold X Pr...
MULTI DIMENSION IMPACT ACCOUNTING
Sun
FINANCIAL
ACCOUNTS
DEDUCT negative impact not accounted for
REVENUES
Products Sold X...
MULTI DIMENSION IMPACT ACCOUNTING
Sun
FINANCIAL
ACCOUNTS
ACCOUNTING FOR EVERYTHING
REVENUES
Products Sold X Price
Products...
The next slide shows how the
operations of a process:
(1) through the money P&L report impact on
the money balance sheet o...
MULTI DIMENSION IMPACT ACCOUNTING
Sun
BOP EOP
Sun
Financial
Capital
Human
Capital
Man Built
Capital
Natural
Capital
Sun Su...
MULTI DIMENSION IMPACT ACCOUNTING
Sun
BOP EOP
Sun
Financial
Capital
Human
Capital
Man Built
Capital
Natural
Capital
Sun Su...
The next series of slides ...
STATE BOP … ACTIVITY … STATE EOP
Shows how an individual optimizes his/her
performance relat...
MULTI DIMENSION IMPACT ACCOUNTING
ACTIVITIES OF AN INDIVIDUAL
Input of
Human
Capital:
Time, Effort,
Skill, Ability,
Knowle...
MULTI DIMENSION IMPACT ACCOUNTING
Job-Money Work
Housing
Health
Time
Skills
Income
Recreation
Education
ProGood Work
Energ...
MULTI DIMENSION IMPACT ACCOUNTING
Sun
Small decisions by people make all the differenceBOP EOP
Sun
Financial
Capital
Human...
MULTI DIMENSION IMPACT ACCOUNTING
Sun
Use of Pesticides
Use of Land
The IMPACT of FOOD
Use of Water
Use of Fertilizers
Air...
MULTI DIMENSION IMPACT ACCOUNTING
Sun
Use of Land
The IMPACT of ENERGY
Use of Water
Use of Finite
Resources
Air Pollution
...
MULTI DIMENSION IMPACT ACCOUNTING
Sun
LAND USE
Sustainable agriculture
Water purification
About LAND USE
Wetlands
Intensiv...
MULTI DIMENSION IMPACT ACCOUNTING
Sun
WATER USE
Food production
uses water
Beverage production
uses water
About WATER USE
...
MULTI DIMENSION IMPACT ACCOUNTING
Sun
EMISSIONS
SO2 … acid rain
CO2-Greenhouse Gas
About ATMOSPHERIC POLLUTION
Air polluti...
MULTI DIMENSION IMPACT ACCOUNTING
MBSS
Man-Built
Structures
& Systems
Sun
Natural
Capital
FINANCIAL
ACCOUNTSHuman
Capital
...
The next slides
STATE BOP … ACTIVITY … STATE EOP
How to apply the MDIA core concepts to the
supply chain:
● First thinking...
MULTI DIMENSION IMPACT ACCOUNTING
Sun
FINANCIAL
ACCOUNTS
Economic Activity … Process Accounts
REVENUES
Products Sold X Pri...
MULTI DIMENSION IMPACT ACCOUNTING
MBSS
Natural
Capital
Human
Capital
PRODUCT … the SUPPLY CHAIN
IMPACT ACCOUNTING ADJUSTME...
MULTI DIMENSION IMPACT ACCOUNTING
MBSS
Natural
Capital
Human
Capital
PLACE … Where people live and work … where impact can...
The next slide:
A graphic from the MIT PROMISE initiative
… and then how the same type of thinking
might be applied in the...
MULTI DIMENSION IMPACT ACCOUNTING
File: MDIA-Framework-004-150411-WIP.odp Peter Burgess (c) All rights reserved
MULTI DIMENSION IMPACT ACCOUNTING
Sun
BOP EOP
File: MDIA-Framework-004-150411-WIP.odp Peter Burgess (c) All rights reserve...
MULTI DIMENSION IMPACT ACCOUNTING
Sun
Small decisions by people make all the differenceBOP EOP
Sun
Financial
Capital
Human...
MULTI DIMENSION IMPACT ACCOUNTING
Sun
Small decisions by people make all the differenceBOP EOP
Sun
Financial
Capital
Human...
MULTI DIMENSION IMPACT ACCOUNTING
Sun
Small decisions by people make all the differenceBOP EOP
Sun
Financial
Capital
Human...
MULTI DIMENSION IMPACT ACCOUNTING
Sun
Small decisions by people make all the differenceBOP EOP
Sun
Financial
Capital
Human...
MULTI DIMENSION IMPACT ACCOUNTING
Sun
Small decisions by people make all the differenceBOP EOP
Sun
Financial
Capital
Human...
MULTI DIMENSION IMPACT ACCOUNTING
Sun
External Resources Create Impact Value
Sun
BOP
Financial
Capital
Human
Capital
Man B...
Moving forward … Request
for collaboration
Money is part of a complex socio-enviro-economic
system. While it works … it do...
Some links and contact information:
Peter Burgess … peterbnyc@gmail.com
Peter Burgess LinkedIn profile
https://www.linkedi...
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Mdia p3-01-core-concepts-150420

  1. 1. MULTI DIMENSION IMPACT ACCOUNTING File: MDIA-p3-01-2-CORE-CONCEPTS-150420.odp Peter Burgess (c) All rights reserved MDIA CORE CONCEPTS
  2. 2. MULTI DIMENSION IMPACT ACCOUNTING WORK-IN-PROGRESS. SLIDESET STILL IN DEVELOPMENT. UPDATES WILL BE POSTED OVER THE NEXT SEVERAL WEEKS
  3. 3. From Accountancy: ● Double Entry ● State, Process and Flow; ● State, Progress and Performance; ● Cost, Price and Value; ● Quantification; ● Standard Value; ● Data at the Center; ● Feedback; ● Reporting Boundaries; ● Consolidation Rules. MULTI DIMENSION IMPACT ACCOUNTING
  4. 4. From Accountancy: ● Double Entry Accounting; ● State, Process and Flow; ● State, Progress and Performance; ● Cost, Price and Value; ● Quantification; ● Standard Value; ● Data at the Center; ● Feedback; ● Reporting Boundaries; ● Consolidation Rules. MULTI DIMENSION IMPACT ACCOUNTING
  5. 5. Double Entry Accounting ● Double Entry Accounting is the core strength of a good accounting system; ● Every money transaction impacts two accounts; and the system as a whole is always in balance; ● Enables analysis of State, Process and Flow The next three slides show how ACTIVITY or process and flow changes STATE MULTI DIMENSION IMPACT ACCOUNTING
  6. 6. MULTI DIMENSION IMPACT ACCOUNTING These 3 slides explain the concept of STATE and FLOW … or in accounting terms, the BALANCE SHEET / PROFIT AND LOSS relationship …
  7. 7. MULTI DIMENSION IMPACT ACCOUNTING STEADY STATE
  8. 8. MULTI DIMENSION IMPACT ACCOUNTING POSITIVE PROGRESS
  9. 9. MULTI DIMENSION IMPACT ACCOUNTING DETERIORATION OF STATE
  10. 10. These reflect … ● Steady state; ● Positive progress; and ● Deterioration of state MULTI DIMENSION IMPACT ACCOUNTING
  11. 11. No information about the activities is needed in order to understand PROGRESS … only information about changes in STATE MULTI DIMENSION IMPACT ACCOUNTING
  12. 12. Data at the Center ● Used to plan ● Used to organize ● Used to implement ● Used to monitor progress ● Used to monitor cost effectiveness ● Used to plan follow up next steps MULTI DIMENSION IMPACT ACCOUNTING
  13. 13. MULTI DIMENSION IMPACT ACCOUNTING
  14. 14. State, Progress and Performance ● State is the Balance Sheet of the entity at a moment in time; ● Progress may be measured by comparing the Balance Sheet changes between the beginning and the end of the period; ● Performance is a measurement that relates Progress to the resources consumed. MULTI DIMENSION IMPACT ACCOUNTING
  15. 15. MULTI DIMENSION IMPACT ACCOUNTING EFFICIENCY AND EFFECTIVENESS
  16. 16. Cost, Price and Value ● There should be clarity about what is cost and what is price; ● A buy/sell transaction takes place at a price; ● The buy price becomes the buyer's cost; ● There is a lot of data about price, but relatively little accessible data about cost; ● Value is a very important idea, but quantified data about value is missing; ● Money based cost, price and value ignore everything about impact on people and planet. MULTI DIMENSION IMPACT ACCOUNTING
  17. 17. MULTI DIMENSION IMPACT ACCOUNTING
  18. 18. Quantification Putting numbers on measurements is a vital step in enabling management and good decision making. ● Money is used to measure profit and much to do with financial capital. ● A measure is needed for everything to do with human life and quality of life … human capital ● Other measures are needed for : ● The Carbon Cycle; ● The Water Cycle; ● Land use (including ecosystem services); ● Various Nutrient Cycles. MULTI DIMENSION IMPACT ACCOUNTING
  19. 19. The role of monetization Monetization is fatally flawed as a method for measurement. An exchange transaction … a market … gives a result based more than anything else on supply and demand. It is a 'result' and not a 'measure'. MULTI DIMENSION IMPACT ACCOUNTING
  20. 20. Standard Value Cost accounting is often based on a framework of standard costs. Impact accounting can be based on a similar system of standards. The standard is the norm. Variations from the norm are identified and used to prioritize action plans to improve performance MULTI DIMENSION IMPACT ACCOUNTING
  21. 21. Beyond the Reporting Entity Most reporting is done by implementing organizations about their own progress and performance … usually with little or no reference to impact beyond the boundaries of the reporting entity. This is completely inadequate, but is the norm and has been for decades. MULTI DIMENSION IMPACT ACCOUNTING
  22. 22. Ignoring Externalities Conventional accounting enables ignoring externalities. If there is no money transaction there is nothing … which is patently absurd in a world where natural resources are being depleted and the environment degraded by very large scale economic activities. MULTI DIMENSION IMPACT ACCOUNTING
  23. 23. The next slide shows: Niger Delta oil pollution … this pollution from oil industry activities has ruined the lives of most of the indigenous people of the area, wrecked the local fishing resources but at NO COST to the oil companies which report high profits and high stock price valuations. Externalities MUST be brought into the accounting. MULTI DIMENSION IMPACT ACCOUNTING
  24. 24. MULTI DIMENSION IMPACT ACCOUNTING SunSun BOP Financial Capital Human Capital Man Built Structures & Systems Natural Capital Sun SunSun EOP Financial Capital Human Capital Man Built Structures & Systems Natural Capital Sun PROCESS OIL POLLUTION IN THE NIGER DELTA
  25. 25. The last slide showed pollution caused by the oil and gas industry in the Niger Delta where there was once a thriving artisanal fishery. There is accounting for oil company profits. There is no accounting for the catastrophic disruption in the lives of thousands of Nigerians (Human capital impact) nor the damage to the ecosystem (Natural capital impact). MULTI DIMENSION IMPACT ACCOUNTING
  26. 26. The next slides show: Amazing complexity … ● Global North/Global South/Community ● Big Organizations - National and International / Small communities ● Elements of Society: National level and community MULTI DIMENSION IMPACT ACCOUNTING
  27. 27. MULTI DIMENSION IMPACT ACCOUNTING
  28. 28. MULTI DIMENSION IMPACT ACCOUNTING
  29. 29. MULTI DIMENSION IMPACT ACCOUNTING
  30. 30. Feedback ● Feedback is best when it is fast and very focused on practical actionable response ● In this example feedback happens in the small community BEFORE the data reaches city, state, national and international big data systems MULTI DIMENSION IMPACT ACCOUNTING
  31. 31. MULTI DIMENSION IMPACT ACCOUNTING
  32. 32. Malaria in the community ● Get data / facts about malaria in the community ● This becomes the STATE – BOP* ● PLAN malaria control interventions ● IMPLEMENT malaria control interventions ● Get data about costs ● Get data / facts about resulting malaria in the community ● This becomes the resulting STATE EOP* ● Assess change from BOP to EOP MULTI DIMENSION IMPACT ACCOUNTING * BOP – EOP … Beginning and End of Period
  33. 33. MULTI DIMENSION IMPACT ACCOUNTING
  34. 34. Next 2 slides ● The first slide is a simplified representation of the State – Flow – State idea for ALL elements of the Socio-Enviro-Economic System ● The second slide shows what the conventional money metrics measure … just a tiny part of everything that matters. MULTI DIMENSION IMPACT ACCOUNTING * BOP – EOP … Beginning and End of Period
  35. 35. MULTI DIMENSION IMPACT ACCOUNTING STATE - BOP STATE - EOPPERIOD ACTIVITES
  36. 36. MULTI DIMENSION IMPACT ACCOUNTING STATE - BOP STATE - EOPPERIOD ACTIVITES
  37. 37. The makeup of: ● Human Capital; ● Financial Capital; ● Man Built Capital*; and ● Natural Capital MULTI DIMENSION IMPACT ACCOUNTING * Sometimes referred to as MBSS – Man Built Structures and Systems
  38. 38. 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 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
  39. 39. STATE – FLOW (activities) – STATE ● Financial Capital; ● Human Capital; ● Man Built Capital*; ● Natural Capital; ● Sun MULTI DIMENSION IMPACT ACCOUNTING * Sometimes referred to as MBSS – Man Built Structures and Systems
  40. 40. MULTI DIMENSION IMPACT ACCOUNTING Resource Depletion Environment Degradation Improves QoL Super Rich Affluent BoPyramid Industrial Mining Energy Government Not-for-Profit Paperwork Banking Water Air EcoServices Habitat Law Minerals Energy Land Improves Environment Maintains Natural Capital and remediates Produces Products Improves QoL Financial Progress Renewables Waste Creation Super Rich Affluent BoPyramid Industrial Mining Energy Government Not-for-Profit Paperwork Banking Water Air EcoServices Habitat Law Minerals Energy Land Sun STATE - BOP Sun Financial Capital Human Capital Man Built Capital Natural Capital Sun Sun STATE - EOP Sun Financial Capital Human Capital Man Built Capital Natural Capital Sun Compromises Society Activities Bad Impact Good Impact
  41. 41. The next 4 slides STATE BOP … ACTIVITY ACCOUNTING … STATE EOP ● Financial accounting: ● Financial accounting plus GOOD impacts; ● Financial accounting minus BAD impacts; ● Financial accounting with BOTH impacts. MULTI DIMENSION IMPACT ACCOUNTING
  42. 42. MULTI DIMENSION IMPACT ACCOUNTING Sun FINANCIAL ACCOUNTS 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 Profit File: MDIA-Framework-004-150411-WIP.odp Peter Burgess (c) All rights reserved Sun Financial Capital Human Capital Man Built Capital Natural Capital Sun SunSun Financial Capital Human Capital Man Built Capital Natural Capital Sun
  43. 43. MULTI DIMENSION IMPACT ACCOUNTING Sun FINANCIAL ACCOUNTS ADD positive impact not accounted for 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 Profit 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 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
  44. 44. MULTI DIMENSION IMPACT ACCOUNTING Sun FINANCIAL ACCOUNTS DEDUCT negative impact not accounted for 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 Profit 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
  45. 45. MULTI DIMENSION IMPACT ACCOUNTING Sun FINANCIAL ACCOUNTS ACCOUNTING FOR EVERYTHING 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 Profit 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
  46. 46. 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
  47. 47. 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
  48. 48. 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
  49. 49. The next series of slides ... STATE BOP … ACTIVITY … STATE EOP Shows how an individual optimizes his/her performance relative to quality of life … but at the same time is having a lot of impact on everything else. MULTI DIMENSION IMPACT ACCOUNTING
  50. 50. MULTI DIMENSION IMPACT ACCOUNTING ACTIVITIES OF AN INDIVIDUAL Input of Human Capital: Time, Effort, Skill, Ability, Knowledge Improves Society Improves MBSS Pro Good Activities Buy and Use PRODUCTS e.g. Food, Energy Shelter, Transport Pro Money Activities e.g. Paid Work Non-Impact Recreation Financial Capital Human Capital Man Built Structures & Systems Natural Capital Sun Financial Capital Human Capital Man Built Capital Natural Capital Sun Improves QoL and Human Capital WASTE Liquid Gases Solids Natural Capital Depleted Maybe improves FC in HC Financial Capital Human Capital Man Built Capital Natural Capital Sun INPUTS ACTIVITIES BAD Impact State-EOPState-BOP GOOD Impact Use of MBSS Use of Natural Capital Use of Solar
  51. 51. MULTI DIMENSION IMPACT ACCOUNTING Job-Money Work Housing Health Time Skills Income Recreation Education ProGood Work Energy PLUS opportunities Improves society Food Clothes Resource Depletion Environmental Degradation BOP EOPThe Individual Sun BOP Financial Capital Human Capital Man Built Capital Natural Capital Sun PERSONAL ASSETS Energy Health Enjoyment Skills Experience Family Shelter Friends Money Stuff QUALITY OF LIFE Sun Financial Capital Human Capital Man Built Capital Natural Capital Sun PERSONAL ASSETS Energy Health Enjoyment Skills Experience Family Shelter Friends Money Stuff QUALITY OF LIFE PRODUCTS use MBSS PRODUCTS Impact NC PRODUCTS Use MBSS PRODUCTS improve QOL
  52. 52. MULTI DIMENSION IMPACT ACCOUNTING Sun Small decisions by people make all the differenceBOP EOP Sun Financial Capital Human Capital Man Built Capital Natural Capital Sun SunSun Financial Capital Human Capital Man Built Capital Natural Capital Sun MEWHAT I BUY WHERE I WORK WHERE I LIVE The supply chain for PRODUCTS HOW I USE THINGS The post use waste chain Decisions about what I buy or don't buy are of great importance!
  53. 53. MULTI DIMENSION IMPACT ACCOUNTING Sun Use of Pesticides Use of Land The IMPACT of FOOD Use of Water Use of Fertilizers Air Pollution Use of Growth Hormones and Antibiotics Use of Energy Use of Equipment Use of Labor Inputs Money Price Money Profit Money Cost True Value Value Add True Cost Sun BOP Financial Capital Human Capital Man Built Capital Natural Capital Sun SunSun EOP Financial Capital Human Capital Man Built Capital Natural Capital Sun Good food improves wellness Wellness improves quality of life INPUTS ACTIVITIES BAD Impact GOOD Impact
  54. 54. MULTI DIMENSION IMPACT ACCOUNTING Sun Use of Land The IMPACT of ENERGY Use of Water Use of Finite Resources Air Pollution Use of Energy Use of Equipment Use of Labor Inputs Money Price Money Profit Money Cost True Value Value Add True Cost Sun BOP Financial Capital Human Capital Man Built Capital Natural Capital Sun SunSun EOP Financial Capital Human Capital Man Built Capital Natural Capital Sun Good food improves wellness Wellness improves quality of life Undue influence and corruption Land and water pollution INPUTS ACTIVITIES BAD Impact GOOD Impact
  55. 55. MULTI DIMENSION IMPACT ACCOUNTING Sun LAND USE Sustainable agriculture Water purification About LAND USE Wetlands Intensive monoculture Coastal mangrove Urban infrastructure Roads, Parking Lots There is a limited amount of land There are multiple possible uses Money Profit Land is a factor in improving human capital, producing goods and services, locating MBSS, and providing very critical ecosystem services Suburban sprawl Housing Tropical forest Habitat Industrial operations File: MDIA-Framework-004-150411-WIP.odp Peter Burgess (c) All rights reserved Sun BOP Financial Capital Human Capital Man Built Structures & Systems Natural Capital Sun SunSun EOP Financial Capital Human Capital Man Built Structures & Systems Natural Capital Sun
  56. 56. MULTI DIMENSION IMPACT ACCOUNTING Sun WATER USE Food production uses water Beverage production uses water About WATER USE Water is essential to LIFE Nothing is more important Household water use essential Industrial processes use water Rainfall and fresh water are abundant in some places but not everywhere Household waste also pollutes Waste water pollution from processes a critical issue Important for all processes to treat water before discharge Water is abundant, but most has too much dissolved salts to be potable File: MDIA-Framework-004-150411-WIP.odp Peter Burgess (c) All rights reserved Sun BOP Financial Capital Human Capital Man Built Structures & Systems Natural Capital Sun SunSun EOP Financial Capital Human Capital Man Built Structures & Systems Natural Capital Sun
  57. 57. MULTI DIMENSION IMPACT ACCOUNTING Sun EMISSIONS SO2 … acid rain CO2-Greenhouse Gas About ATMOSPHERIC POLLUTION Air pollution has many forms, all of which are more or less detrimental to people and planet Particulates MH4-Methane-GHG Some emissions have a direct impact on health Nitrous oxides Freon-ozone layer damage Some emissions are greenhouse gases that cause global warming The atmosphere is not an infinite free dump for undesirable and toxic emissions All emissions have a cost File: MDIA-Framework-004-150411-WIP.odp Peter Burgess (c) All rights reserved Sun BOP Financial Capital Human Capital Man Built Structures & Systems Natural Capital Sun SunSun EOP Financial Capital Human Capital Man Built Structures & Systems Natural Capital Sun
  58. 58. MULTI DIMENSION IMPACT ACCOUNTING MBSS Man-Built Structures & Systems Sun Natural Capital FINANCIAL ACCOUNTSHuman Capital MBSS Man-Built Structures & Systems Sun Natural Capital Human Capital Economic Activity … Process Accounts 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 Profit 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 File: MDIA-Framework-004-150411-WIP.odp Peter Burgess (c) All rights reserved
  59. 59. The next slides STATE BOP … ACTIVITY … STATE EOP How to apply the MDIA core concepts to the supply chain: ● First thinking it terms of money profit ● Secondly adding in the impact on people, society and the environment. MULTI DIMENSION IMPACT ACCOUNTING
  60. 60. MULTI DIMENSION IMPACT ACCOUNTING Sun FINANCIAL ACCOUNTS Economic Activity … Process Accounts 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 Profit File: MDIA-Framework-004-150411-WIP.odp Peter Burgess (c) All rights reserved Sun Financial Capital Human Capital Man Built Structures & Systems Natural Capital Sun SunSun Financial Capital Human Capital Man Built Structures & Systems Natural Capital Sun
  61. 61. MULTI DIMENSION IMPACT ACCOUNTING MBSS Natural Capital Human Capital PRODUCT … the SUPPLY CHAIN IMPACT ACCOUNTING ADJUSTMENTS Zero to start Costs this stage Profit this stage Price this stage FINANCIAL ACCOUNTS 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 File: MDIA-Framework-004-150411-WIP.odp Peter Burgess (c) All rights reserved
  62. 62. MULTI DIMENSION IMPACT ACCOUNTING MBSS Natural Capital Human Capital PLACE … Where people live and work … where impact can be seen IMPACT ACCOUNTING ADJUSTMENTS Zero to start Costs this stage Profit this stage Price this stage FINANCIAL ACCOUNTS Zero to start Costs this stage Profit this stage Price Stage 1 FINANCIAL ACCOUNTS EACH STEP OF THE SUPPLY CHAIN Impact Stage 1 Impact Stage 1 Impact Stage 1 Financial Dimension File: MDIA-Framework-004-150411-WIP.odp Peter Burgess (c) All rights reserved
  63. 63. The next slide: A graphic from the MIT PROMISE initiative … and then how the same type of thinking might be applied in the MDIA framework. Like most analysis initiatives the MIT PROMISE looks at performance from the perspective of the company and its owners. Other stakeholders are ignored. MULTI DIMENSION IMPACT ACCOUNTING
  64. 64. MULTI DIMENSION IMPACT ACCOUNTING File: MDIA-Framework-004-150411-WIP.odp Peter Burgess (c) All rights reserved
  65. 65. MULTI DIMENSION IMPACT ACCOUNTING Sun BOP EOP File: MDIA-Framework-004-150411-WIP.odp Peter Burgess (c) All rights reserved Sun Financial Capital Human Capital Man Built Structures & Systems Natural Capital Sun SunSun Financial Capital Human Capital Man Built Structures & Systems Natural Capital Sun
  66. 66. MULTI DIMENSION IMPACT ACCOUNTING Sun Small decisions by people make all the differenceBOP EOP Sun Financial Capital Human Capital Man Built Capital Natural Capital Sun SunSun Financial Capital Human Capital Man Built Capital Natural Capital Sun
  67. 67. MULTI DIMENSION IMPACT ACCOUNTING Sun Small decisions by people make all the differenceBOP EOP Sun Financial Capital Human Capital Man Built Capital Natural Capital Sun SunSun Financial Capital Human Capital Man Built Capital Natural Capital Sun
  68. 68. MULTI DIMENSION IMPACT ACCOUNTING Sun Small decisions by people make all the differenceBOP EOP Sun Financial Capital Human Capital Man Built Capital Natural Capital Sun SunSun Financial Capital Human Capital Man Built Capital Natural Capital Sun Product Place Supply Chain Process Organization Enabling environment Society
  69. 69. MULTI DIMENSION IMPACT ACCOUNTING Sun Small decisions by people make all the differenceBOP EOP Sun Financial Capital Human Capital Man Built Capital Natural Capital Sun SunSun Financial Capital Human Capital Man Built Capital Natural Capital Sun
  70. 70. MULTI DIMENSION IMPACT ACCOUNTING Sun Small decisions by people make all the differenceBOP EOP Sun Financial Capital Human Capital Man Built Capital Natural Capital Sun SunSun Financial Capital Human Capital Man Built Capital Natural Capital Sun
  71. 71. MULTI DIMENSION IMPACT ACCOUNTING Sun External Resources Create Impact Value Sun BOP Financial Capital Human Capital Man Built Capital Natural Capital Sun SunSun EOP Financial Capital Human Capital Man Built Capital Natural Capital Sun
  72. 72. Moving forward … Request for collaboration Money is part of a complex socio-enviro-economic system. While it works … it does not work as well as it should, nor as well as it could. The work of MDIA is to enable this complex system to work better. MDIA needs to be a team effort. Join in and help to make the world a better place. Please get in touch. Peter Burgess … peterbnyc@gmail.com MULTI DIMENSION IMPACT ACCOUNTING
  73. 73. 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

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