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Triple Bottom Line Barbados Feb 2012
The document discusses the concept of triple bottom line reporting and whether it is a real change or just window dressing. It provides background on evolving societal and economic issues like population growth, resource consumption, and accountability. The document also outlines emerging solutions like corporate social responsibility and sustainability reporting to address these issues. It argues that accounting professionals need to participate in these solutions and provides examples of frameworks, standards, and initiatives that are driving more comprehensive reporting on environmental, social, and economic impacts.
Triple Bottom Line Barbados Feb 2012
- 1. TRIPLE BOTTOM LINE Is it fact or fiction? Real change or flavour of the day? Reality or window-dressing? By Nick A. Shepherd FCMC, FCGA, FCCA, FCMI www.nickshepherd.ca OUR MISSION Providing leaders and managers with education, tools and training to solve today’s 1 problems and prepare for tomorrow’s challenges.
- 2. Agenda • What’s the issue – Why should we care? • The facts (maybe...) • Some solutions • Action 2 OUR MISSION Providing leaders and managers with education, tools and training to solve today’s problems and prepare for tomorrow’s challenges.
- 3. THE ISSUE ANDSOME BACKGROUND AND WHY WE SHOULD CARE Why is there an issue? OUR MISSION Providing leaders and managers with education, tools and training to solve today’s 3 problems and prepare for tomorrow’s challenges.
- 4. My journey –or “how I came to care...” • Family business / retailing • Engineer – entertainment • Accounting • General management • Consulting – Service & quality management – Process management – Leadership & team development – Intangibles and knowledge management 4 OUR MISSION Providing leaders and managers with education, tools and training to solve today’s problems and prepare for tomorrow’s challenges.
- 5. Societies evolve overtime Middle Up to 1880 1880 - 1945 1945 - 1985 1985 - 2030 Post 2030 Ages Industrial Leisure / Hunting Agricultural Knowledge cosmic? Manufacturing Services RESULTS OF SOCIETAL EVOLUTION = Frameworks for societal governance (including institutions) Note also “The Empathetic Civilization” Jeremy Rifkin OUR MISSION Providing leaders and managers with education, tools and training to solve today’s problems and prepare for tomorrow’s challenges.
- 6. ..and society changes… Movement to “tipping point...” www.telegraph.co.uk 6 OUR MISSION Providing leaders and managers with education, tools and training to solve today’s problems and prepare for tomorrow’s challenges.
- 7. Issue – accountabilityand transparency • Core aspects have evolved – “Corporate capital” • From financial dominance to knowledge dominance – “Human engagement” • From buying labour to buying knowledge and wisdom (on loan versus “buy?”) – “The world” • From localization to highly populated globalization 7 OUR MISSION Providing leaders and managers with education, tools and training to solve today’s problems and prepare for tomorrow’s challenges.
- 8. Are we reallyaccountable today? • Concerns over – Ethical conduct and power – Environment – Social impact of business on communities – Sustainability of enterprise 8 OUR MISSION Providing leaders and managers with education, tools and training to solve today’s problems and prepare for tomorrow’s challenges.
- 9. THE (DEVELOPING) FACTS What we do know about what changes are taking place Assets employed, Environmental inputs and outputs, relationship building and “fairness” OUR MISSION Providing leaders and managers with education, tools and training to solve today’s 9 problems and prepare for tomorrow’s challenges.
- 10. Changing base ofassets employed • From tangible assets to intangible assets – The 80 / 20 rule • Annual survey – Brand Finance (UK) – Top 10,000 corporations – $54 trillion invested – Intangibles moved to be 75% of assets by 2007 – Broad range – technology, health care much higher 10 OUR MISSION Providing leaders and managers with education, tools and training to solve today’s problems and prepare for tomorrow’s challenges.
- 11. It’s not justabout $ invested Stakeholders interests It’s about the “value...” Organizational Capital Industrial age Knowledge age Organizations Financial Intellectual INCREASED STRATEGIC VALUE Asset base Capital Capital DECLINING STRATEGIC Base for Structured Non Structured accountability reporting reporting Base for Well defined No reporting comparability standards standards VALUE Assurance 3rd party audit No 3rd party process & Audit & verification verification OUR MISSION Providing leaders and managers with education, tools and training to solve today’s problems and prepare for tomorrow’s challenges.
- 12. Population growth • 1 AD 250 million • 1800 (1800) – 1 billion • 1930 (130) – 2 billion • 1960 (30) – 3 billion • 1975 (15) – 4 billion • 1987 (12) – 5 billion • 2000 (13) – 6 billion • 2011 (11) – 7 billion 12 OUR MISSION Providing leaders and managers with education, tools and training to solve today’s problems and prepare for tomorrow’s challenges.
- 13. A changing world– energy consumption A Wikipedia common resource 13 OUR MISSION Providing leaders and managers with education, tools and training to solve today’s problems and prepare for tomorrow’s challenges.
- 14. CO2 Emissions • 375 parts / million • Highest in 420,000 years • Probably for 20M years • Some consider near “non recoverable tipping point?” • Drivers include: – Energy intensity – Population growth – Land use change World Resources Institute: UNEP/GRID-Arendal • Caribbean ~ 5% 14 OUR MISSION Providing leaders and managers with education, tools and training to solve today’s problems and prepare for tomorrow’s challenges.
- 15. Growth in worldtrade = relationships 15 OUR MISSION Providing leaders and managers with education, tools and training to solve today’s problems and prepare for tomorrow’s challenges.
- 16. “De-composing organizations” Governance / Oversight Governance / Policy / Oversight direction Policy / Design / Manufacture / direction Design / Development Manufacture / Design / Service Development Manufacture / Service Design / Development Delivery Manufacture / Service Delivery Development Service Delivery Delivery Manufacture / Service Delivery Post Post Delivery It’s all about relationships Post Delivery support Post Post Delivery support with external (as well as Delivery Delivery support support support internal) “partners.” OUR MISSION Providing leaders and managers with education, tools and training to solve today’s problems and prepare for tomorrow’s challenges.
- 17. Occupy Movement • 82 countries, 95 cities • Growing momentum for change – Social activation – “Something’s wrong...” • Political changes (mid East...) • Economic (financial crisis) – Ethics / bail-out then bonus • Varying responses + and – – “Missed opportunity” 17 Wikipedia OUR MISSION Providing leaders and managers with education, tools and training to solve today’s problems and prepare for tomorrow’s challenges.
- 18. Why accountants needto participate Once social change begins, it cannot be reversed. You cannot uneducate the person who has learned to read. You cannot humiliate the person who feels pride. You cannot oppress the people who are not afraid anymore. We have seen the future, and the future is ours Cesar Chavez; “SUSTAINABILITY” - THE American activist ABILITY TO OPERATE AS A GOING CONCERN 1927-1993 “License to operate” “Capacity to operate” Sustainability Sustainability SOCIETAL FOCUS ORGANIZATION FOCUS Public perception Intangibles and CORPORATE VALUE and Tangibles social accountability OUR MISSION Providing leaders and managers with education, tools and training to solve today’s problems and prepare for tomorrow’s challenges.
- 19. SOME ACTIVITIES AND SOLUTIONS Who is doing what today? What change is already taking place? What do we see ahead? OUR MISSION Providing leaders and managers with education, tools and training to solve today’s 19 problems and prepare for tomorrow’s challenges.
- 20. What brings thistogether Corporate Social Responsibility (CSR) is the continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as of the local community and society at large’. WORLD BUSINESS COUNCIL FOR SUSTAINABLE DEVELOPMENT “Making Good Business Sense” 20 OUR MISSION Providing leaders and managers with education, tools and training to solve today’s problems and prepare for tomorrow’s challenges.
- 21. Triple Bottom Line Ben & Jerry Evolved CSR • Planet • Social • People • Economic • Profits • Environmental John Elkington, 1994 SustainAbility OUR MISSION Providing leaders and managers with education, tools and training to solve today’s problems and prepare for tomorrow’s challenges.
- 22. Investor focused interest • 19.9% of total assets under management (2008) • $700.1B Investment Funds Institute of Canada • $1,859.4 Investment Managers • $470.5 Large pension funds • TOTAL $3,011.1 B OUR MISSION Providing leaders and managers with education, tools and training to solve today’s problems and prepare for tomorrow’s challenges.
- 23. Carbon Disclosure Project OURMISSION Providing leaders and managers with education, tools and training to solve today’s problems and prepare for tomorrow’s challenges.
- 25. Externalities – driversof change Addressing “externalities” is key to taking responsibility for an organizations behaviour. The late Ray Anderson was founder and chairman of Interface Inc., the world's largest manufacturer of modular carpet for commercial and residential applications and a leading producer of commercial broadloom and commercial fabrics. He defined sustainability as "taking nothing from the earth that is not rapidly and naturally renewable, and doing no harm to the biosphere." 25 OUR MISSION Providing leaders and managers with education, tools and training to solve today’s problems and prepare for tomorrow’s challenges.
- 26. “Externalities” • What are “externalities?” – “In economics an externality is a cost or benefit, not transmitted through prices, incurred by a party who did not agree to the action causing the cost or benefit” 26 OUR MISSION Providing leaders and managers with education, tools and training to solve today’s problems and prepare for tomorrow’s challenges.
- 27. ** ** Featured in “Values Driven Business” OUR MISSION Providing leaders and managers with education, tools and training to solve today’s problems and prepare for tomorrow’s challenges.
- 28. The SIGMA Project: The five capitals: • Financial capital • Human capital • Manufactured capital • Social capital • Natural capital NOTE: Context of the SIGMA project was initially 28 sustainability in terms of CSR OUR MISSION Providing leaders and managers with education, tools and training to solve today’s problems and prepare for tomorrow’s challenges.
- 29. IIRC Conceptual Model 29 OUR MISSION Providing leaders and managers with education, tools and training to solve today’s problems and prepare for tomorrow’s challenges.
- 30. Growing trend ofreports Corporate Register OUR MISSION Providing leaders and managers with education, tools and training to solve today’s problems and prepare for tomorrow’s challenges.
- 31. Emerging Assurance Business OURMISSION Providing leaders and managers with education, tools and training to solve today’s problems and prepare for tomorrow’s challenges.
- 32. Evolution of reporting OURMISSION Providing leaders and managers with education, tools and training to solve today’s problems and prepare for tomorrow’s challenges.
- 33. ACTION PLANNING –WHAT ARE YOU GOING TO DO? True leadership is about being ahead of the pack and having a vision for the future and a set of values that underpin your behaviour. OUR MISSION Providing leaders and managers with education, tools and training to solve today’s 33 problems and prepare for tomorrow’s challenges.
- 34. 34 OUR MISSION Providing leadersand managers with education, tools and training to solve today’s problems and prepare for tomorrow’s challenges.
- 35. Take a lookat the web site for free downloads and other items Follow me on “Twitter” and read the blog? 35 OUR MISSION Providing leaders and managers with education, tools and training to solve today’s problems and prepare for tomorrow’s challenges.