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MDIA p3-11-0-PLACE-150705

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MDIA p3-11-0-PLACE-150705

  1. 1. MULTI DIMENSION IMPACT ACCOUNTING File: MDIA-p3-03-PLACE-150705.odp Peter Burgess (c) All rights reserved MDIA PLACE EVERYTHING HAPPENS IN A PLACE
  2. 2. MULTI DIMENSION IMPACT ACCOUNTING WORK-IN-PROGRESS. SLIDESET STILL IN DEVELOPMENT. UPDATES WILL BE POSTED OVER THE NEXT SEVERAL WEEKS
  3. 3. PLACE Where people live Where people work Where mines, factories are located Where part of the supply chain is located Where retail stores are located Where resources are depleted Where environment is degraded Where ecosystems operate MULTI DIMENSION IMPACT ACCOUNTING
  4. 4. PLACE is also ... The universe; The planet earth; Multi country regions; Individual countries; Individual states, counties or parishes; Cities, towns, municipalities; Communities and neighborhoods. MULTI DIMENSION IMPACT ACCOUNTING
  5. 5. PLACE has permanence - it doesn't move or disappear … I grew up in Okehampton, a small town in the South- West of England. In the 1930s the populations was around 3,500, in the 1950s a little over 4,000 and in the 11th century in the hundreds according to the Domesday Book compiled by William the Conqueror. PLACE is a very good place to measure PROGRESS and PERFORMANCE. MULTI DIMENSION IMPACT ACCOUNTING
  6. 6. ALL economic activity is located in a PLACE MULTI DIMENSION IMPACT ACCOUNTING
  7. 7. Performance of a PLACE is the result of aggregation of all the economic activity located in the place MULTI DIMENSION IMPACT ACCOUNTING
  8. 8. PLACE is complex … but a whole lot simpler that the socio-enviro-economic system at the national or global (planet) level. The follow slides will give you an idea ... MULTI DIMENSION IMPACT ACCOUNTING
  9. 9. MULTI DIMENSION IMPACT ACCOUNTING
  10. 10. MULTI DIMENSION IMPACT ACCOUNTING
  11. 11. MULTI DIMENSION IMPACT ACCOUNTING
  12. 12. Data and analysis at the level of community, town or city (PLACE) is a whole lot more effective than data and decision making higher up the system. The follow slide shows this ... MULTI DIMENSION IMPACT ACCOUNTING
  13. 13. MULTI DIMENSION IMPACT ACCOUNTING
  14. 14. PLACE reflects ALL the dimensions of the Socio-Enviro-Economic system The follow slides are a reminder of the elements of this complex system ... MULTI DIMENSION IMPACT ACCOUNTING
  15. 15. MULTI DIMENSION IMPACT ACCOUNTING Sun Fundamentals of the Socio-Enviro-Economic SystemBOP Sun Financial Capital Human Capital Man Built Capital Natural Capital Sun SunSun Financial Capital Human Capital Man Built Capital Natural Capital Sun Financial Capital … virtual masquerading as reality. Human Capital … PEOPLE … are complex, because we originated through nature, but our inventions are simple. Man Built Capital is so simplistic compared to Natural Capital. While in some part amazing, it is very crude compared to what is the norm in Natural Capital. In the end it is Natural Capital that is going to determine everything. NC is infinitely complex and resilient and will outlast everything Man Built … and People are unlikely to survive in a future mass extinction that is quite certain. The source of ALL energy to drive the system EOP
  16. 16. 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 BOP = Beginning of Period STATE EOP = End of Period STATE PROGRESS is Change in STATE during the period. ALL the elements of the BOP and EOP STATES need to be quantified PEOPLE PROGRESS when MY STATE and EVERYONE'S STATE improves AND there is little degradation of NATURAL CAPITAL SOCIO-ENVIRO-ECONOMIC SYSTEM AND In addition little degradation of MAN BUILT CAPITAL AND PLACE is where all of this comes together
  17. 17. 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 Nature (life) Sun Nature (life) Capital Market Value Water Nature (life)Land Shelter WaterClothes Nature (life)Air Health Ecoservices Education Skills Recreation Culture Physical capital Religion Knowledge capital Security Energy Mobility Profit Physical capital Physical capital Social capital
  18. 18. MULTI DIMENSION IMPACT ACCOUNTING FOCUS ON PLACE and the PLACE PERSPECTIVE
  19. 19. All the activities and impacts of PEOPLE are located in a PLACE … MULTI DIMENSION IMPACT ACCOUNTING
  20. 20. MULTI DIMENSION IMPACT ACCOUNTING SunSun BOP Financial Capital Human Capital Man Built Capital Natural Capital Sun SunSun EOP Financial Capital Human Capital Man Built Capital Natural Capital Sun Person uses money to satisfy needs ● Food ● Water ● Shelter ● Clothing ● Recreation ● etc Person Lives ● Eats ● Drinks ● Is protected ● Has clothes ● Recreates ● etc Person contributes time, energy and talent: ● to family; ● to friends; ● to society; ● to employer. Person thrives Family thrives Friends thrive Society thrives Impact metrics update social capital Organization thrives … money metrics update financial capital Consumption impacts Man Built Capital and Natural Capital through supply chain, use and post use waste chain. Impact metrics update MBC and Natural Capital Activities and Impact of a Person Activities Person Impact External Impact Person Works ● Value to employer ● Uses time and skill ● Earns money
  21. 21. The PLACE has a relationship with the power of the SUN ... MULTI DIMENSION IMPACT ACCOUNTING
  22. 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 The energy for everything has come from the sun. Fossil fuels are the result of ancient photo- synthesis. The sun possesses enough energy to power the future, but we do not know how best to fund such a change using conventional analysis. Sun About the SunAbout the Sun
  23. 23. … and there are elements of NATURAL CAPITAL in the PLACE ... MULTI DIMENSION IMPACT ACCOUNTING
  24. 24. 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 Nature (life) Land Water Air pollution Ecoservices GHG emissions About Natural Capital EOP
  25. 25. … as well as various elements of MAN BUILT CAPITAL ... MULTI DIMENSION IMPACT ACCOUNTING
  26. 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 Institutional Capital Physical Capital Knowledge Capital Social Capital Financial Capital About Man Built Capital
  27. 27. Because PLACE does not move … it is always in the same physical location … it is an ideal entity for the measurement of PROGRESS and PERFORMANCE … MULTI DIMENSION IMPACT ACCOUNTING
  28. 28. 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
  29. 29. The STATE of a PLACE at any moment in time is a function of the past (history), the present, and the future … MULTI DIMENSION IMPACT ACCOUNTING
  30. 30. … it is an aggregation of the STATE of each and everyone of the PEOPLE in the PLACE … and aggregation of these PEOPLE characteristics ... 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 Genetic makeup About Human CapitalSTATE is a function of Past, Present and Future Our nurturing Our surroundings Our education Our health care The Past Our food Our water Present Future Accumulated past The present value of the future The situation in the present Opportunities based on the characteristics of the PLACE Opportunities based on the capabilities of the individual
  32. 32. 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 Human Capital Food Water Shelter Clothes Health Education Skills Recreation Culture Religion Security Energy Mobility Our genetic makeup About Human CapitalA Person's Past Our nurturing Our surroundings Our education Our health care Our food Our water
  33. 33. How does the PLACE perform with respect to ALL of these aspects of a PERSON'S QUALITY OF LIFE? MULTI DIMENSION IMPACT ACCOUNTING
  34. 34. 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 Wellness STATE – Quality of Life Capabilities Financial wealth Housing Surroundings Wellness State of health is a major determinant of quality of life. With good health, everything is possible, without good health, much less. A big part of wellness is determined by lifestyle what we eat and drink and how we exercise Family and friends Community Opportunities Security
  35. 35. 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 Capabilities Capabilities are enhanced by education and skill training. They are also enhanced by lifetime learning. STATE – Quality of Life Wellness Capabilities Financial wealth Housing Surroundings Family and friends Community Opportunities Security
  36. 36. 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 Wealth A modest amount of financial wealth, enough to provide financial security is valuable and reduces stress enormously. A vast amount of financial wealth adds rather little to quality of life … but does give bragging rights in a money centric society STATE – Quality of Life Wellness Capabilities Financial wealth Housing Surroundings Family and friends Community Opportunities Security
  37. 37. 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 Housing An adequate amount of shelter is a basic need. STATE – Quality of Life Wellness Capabilities Financial wealth Housing Surroundings Family and friends Community Opportunities Security
  38. 38. 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 Surroundings Surroundings matter especially for children. Children learn from their surroundings. STATE – Quality of Life Wellness Capabilities Financial wealth Housing Surroundings Family and friends Community Opportunities Security
  39. 39. 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 Security Security … being safe is important to quality of life STATE – Quality of Life Wellness Capabilities Financial wealth Housing Surroundings Family and friends Community Opportunities Security
  40. 40. 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 Family and friends Family and friends are central to quality of life because, above all else, people are social beings STATE – Quality of Life Wellness Capabilities Financial wealth Housing Surroundings Family and friends Community Opportunities Security
  41. 41. 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 Community Community is something beyond family and friends. Community is place, and where there is access to the goods and services that are needed. Community is where there is access to education and health services, to utilities, etc STATE – Quality of Life Wellness Capabilities Financial wealth Housing Surroundings Family and friends Community Opportunities Security
  42. 42. 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 Opportunities Capability on its own is not enough. There also must be opportunity, and this is usually beyond the scope of an individual STATE – Quality of Life Wellness Capabilities Financial wealth Housing Surroundings Family and friends Community Opportunities Security
  43. 43. How the PLACE performs with respect to ALL aspects of a PERSON'S QUALITY OF LIFE is the critical measure of the performance of a PLACE. MULTI DIMENSION IMPACT ACCOUNTING
  44. 44. The PLACE is constrained by the NATURAL CAPITAL of the PLACE ... MULTI DIMENSION IMPACT ACCOUNTING
  45. 45. My first memory of PLACE in my formal economics training was to do with LOCATION OF INDUSTRY and the fact that almost all the old great cities were located at the mouths of great rivers … something clearly to do with the NATURAL CAPITAL of the PLACE … MULTI DIMENSION IMPACT ACCOUNTING
  46. 46. Typically human habitation requires LAND and the living of life by PEOPLE does damage to many or all of the elements that make up our NATURAL CAPITAL … Doing the least damage to NATURAL CAPITAL must be a metric in the analysis of PROGRESS and PERFORMANCE. MULTI DIMENSION IMPACT ACCOUNTING
  47. 47. 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 Nature (life) Land Water Air pollution Ecoservices GHG emissions About Natural Capital EOP
  48. 48. 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 Nature (life) Land Water Air pollution Ecoservices GHG emissions About nature (life) Nature (life) Biodiversity The amazing story of evolution and the diversity that has emerged EOP
  49. 49. 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 Nature (life) Land Water Air pollution Ecoservices GHG emissions About ecoservices Ecoservices Nature is extremely complex, but it is balanced with a place for everything and everything it its place. Ecosystem services provide photosynthesis, nitrogen fixing, carbon sequestration, and … EOP
  50. 50. 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 Nature (life) Land Water Air pollution Ecoservices GHG emissions About air pollution Air pollution People and man built structures and systems pollute the air which in turn degrades quality of life. This has become a major issue in urban centers around the world. EOP
  51. 51. 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 Nature (life) Land Water Air pollution Ecoservices GHG emissions About GHG emissions GHG Emissions Green House Gas (GHG) emissions like CO2, CH4 and others cause global warming, which is having impact on weather patterns and other systems. The natural ecosystem service capacity is not enough to balance the emissions originating from man built systems EOP
  52. 52. 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 Nature (life) Land Water Air pollution Ecoservices GHG emissions About Land Land Land is a limiting factor with many competing uses. Natural processes and ecosystem services require land and so do man built structures and systems EOP
  53. 53. 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 Nature (life) Land Water Air pollution Ecoservices GHG emissions About Water Water Water is a also a limiting factor and essential for life and many man built processes. There is abundant water but only limited fresh water. Some places have abundant natural water, other places have water shortage EOP
  54. 54. It is MAN BUILT CAPITAL in its many forms that makes it possible for PEOPLE to have a good QUALITY OF LIFE and STANDARD OF LIVING … MAN BUILT CAPITAL should enable the highest QUALITY OF LIFE for PEOPLE while doing the least damage to NATURAL CAPITAL MULTI DIMENSION IMPACT ACCOUNTING
  55. 55. 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 Social Capital Financial Capital About Man Built Capital
  56. 56. 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
  57. 57. 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 Social Capital Financial Capital About Man Built Capital Institutional Capital Government, Rule of Law, Companies, Organizations. Systems for: Health Education, Banking, Social Services, Security, etc.
  58. 58. 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
  59. 59. 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
  60. 60. 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 Social 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.
  61. 61. 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
  62. 62. 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
  63. 63. 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 Social Capital Financial Capital About Man Built Capital Knowledge Capital Mathematics Physics Biology Chemistry Science of materials Computer science Information technology Biotechnology Artificial intelligence Robotics
  64. 64. Social Capital comprises: ● Networks of friends and family; ● Community; ● Culture; ● Religion; ● Community … people; ● Community … access to services; ● Social safety net; ● etc. MULTI DIMENSION IMPACT ACCOUNTING
  65. 65. 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 Social Capital Financial Capital About Man Built Capital Social Capital Relationships Human interaction Teamwork Religion Culture History
  66. 66. 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
  67. 67. 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?
  68. 68. The BUSINESS ORGANIZATION is a key driver of PROGRESS and PERFORMANCE in a PLACE … … but this is only achieved when BUSINESS takes into consideration the EXTERNALITIES. MULTI DIMENSION IMPACT ACCOUNTING
  69. 69. Maximizing for PROFIT is not enough … … the GOOD IMPACTS and the BAD IMPACTS on PEOPLE and NATURAL CAPITAL must also be brought into account … MULTI DIMENSION IMPACT ACCOUNTING
  70. 70. 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
  71. 71. 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
  72. 72. 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
  73. 73. 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
  74. 74. 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
  75. 75. The next slide shows how the operations of a process: (1) through the FINANCIAL 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
  76. 76. 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
  77. 77. 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
  78. 78. Decision makers for the PLACE ... The accounting for decisions for the PLACE should have a similar form to that of a BUSINESS. The accounting should include BOTH the financial dimension AND the impact on both the PEOPLE and NATURAL CAPITAL. MULTI DIMENSION IMPACT ACCOUNTING
  79. 79. 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
  80. 80. PUBLIC FINANCE ... Funding for the PROGRESS of a PLACE should be based on PROGRESS for PEOPLE rather than on the prevailing Money Models … PUBLIC FINANCE should be enabling the building and maintenance of MAN BUILT CAPITAL (such as INFRASTRUCTURE) so that PEOPLE progress and NATURAL CAPITAL does not suffer degradation but is remediated. MULTI DIMENSION IMPACT ACCOUNTING
  81. 81. GLOBAL CRISIS ... The funding systems for PLACE are a shambles with the results that investment in a better future for PEOPLE is being constrained in ways that put the future at risk. More than half the world's population live in PLACES where basic services are either non- existent or inadequate. MULTI DIMENSION IMPACT ACCOUNTING
  82. 82. This a systemic failure that should not have been possible … and much of the blame for this rests with the FINANCIAL COMMUNITY that is using an outdated system of metrics to make very big decisions. Metrics that look at the PROGRESS and PERFORMANCE of PLACE, with a view that embraces SOCIETY (PEOPLE) and the ENVIRONMENT (PLANET) as well as MONEY (PROFIT) is a step in the right direction. MULTI DIMENSION IMPACT ACCOUNTING
  83. 83. 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
  84. 84. 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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