1. MULTI DIMENSION IMPACT ACCOUNTING MDIA PROCESS THE MAIN
DETERMINANT OF SOCIO-ENVIRO-ECONOMIC EFFICIENCY File:
MDIA-p3-12-0-PROCESS-150707.odp Peter Burgess (c) All rights
reserved
2. MULTI DIMENSION IMPACT ACCOUNTING WORK-IN-PROGRESS. SLIDESET
STILL IN DEVELOPMENT. UPDATES WILL BE POSTED OVER THE NEXT SEVERAL
WEEKS
3. PROCESS IS EVERYWHERE ... MULTI DIMENSION IMPACT
ACCOUNTING
4. PROCESS uses inputs (labor, materials, energy, knowhow,
natural resources, etc.) and in the process degrades the
environment; PROCESS produces PRODUCTS (goods and services) that
enable good quality of life and living standards. MULTI DIMENSION
IMPACT ACCOUNTING
5. The EFFICIENCY of the PROCESS determines the IMPACT on
PEOPLE and PLANET. EFFICIENCY is not only the PROFITABILTY of the
PROCESS but also how much GOOD IMPACT there is for PEOPLE and how
little BAD IMPACT for SOCIETY and the ENVIRONMENT. MULTI DIMENSION
IMPACT ACCOUNTING
6. MULTI DIMENSION IMPACT ACCOUNTING Sun BOP Sun Financial
Capital Human Capital Man Built Capital Natural Capital Sun SunSun
Financial Capital Human Capital Man Built Capital Natural Capital
Sun EOP EFFICIENCY AND EFFECTIVENESS Reference see MDIA - CORE
CONCEPTS
7. However MULTI DIMENSION IMPACT ACCOUNTING
8. MULTI DIMENSION IMPACT ACCOUNTING Sun BOP EOP Sun Financial
Capital Human Capital Man Built Capital Natural Capital Sun SunSun
Financial Capital Human Capital Man Built Capital Natural Capital
Sun Financial accounts describe economic activity in financial or
money terms while completely ignoring impact on everything
else.
9. The next slides show how the data architecture has to be
designed in order for IMPACT to be accounted for in a rigorous and
logical way MULTI DIMENSION IMPACT ACCOUNTING
10. MULTI DIMENSION IMPACT ACCOUNTING Sun FINANCIAL P&L
ACCOUNT Financial Accounts describe Economic Activity REVENUES
Products Sold X Price Products Bought X Price BOP EOP Energy Bought
X Price Employee Benefits Employee Payroll Other expenditures Asset
use costs Depreciation Financial expenses Pro-good expenditures
Taxation PROFITSun Financial Capital Human Capital Man Built
Capital Natural Capital Sun SunSun Financial Capital Human Capital
Man Built Capital Natural Capital Sun COSTS
11. MULTI DIMENSION IMPACT ACCOUNTING Sun ADD positive impact
not accounted forBOP EOP REVENUES Products Sold X Price VALUE to
buyer Equals HUMAN CAPITAL ADD Wages and benefits What value to
employee? Pro-good expenditures What value to society? Taxation
What value to society? POSITIVE IMPACT NOT ACCOUNTED FOR Financial
Capital Human Capital Man Built Capital Natural Capital Sun Sun
Financial Capital Human Capital Man Built Capital Natural Capital
Sun FINANCIAL P&L ACCOUNT REVENUES Products Sold X Price
Products Bought X Price Energy Bought X Price Employee Benefits
Employee Payroll Other expenditures Asset use costs Depreciation
Financial expenses Pro-good expenditures Taxation PROFIT COSTS
12. MULTI DIMENSION IMPACT ACCOUNTING Sun DEDUCT negative
impact not accounted forBOP EOP For products and energy bought and
this process Free use of the commons and public services &
infrastructure Degradation of land Water scarcity and degradation
Air pollution: Impact on people Air pollution: Impact on climate
Air pollution: Impact on people Solid waste Resource depletion
Environmental Degradation Negative impact File:
MDIA-Framework-004-150411-WIP.odp Peter Burgess (c) All rights
reserved Financial Capital Human Capital Man Built Capital Natural
Capital Sun Sun Financial Capital Human Capital Man Built Capital
Natural Capital Sun FINANCIAL P&L ACCOUNT REVENUES Products
Sold X Price Products Bought X Price Energy Bought X Price Employee
Benefits Employee Payroll Other expenditures Asset use costs
Depreciation Financial expenses Pro-good expenditures Taxation
PROFIT COSTS
13. MULTI DIMENSION IMPACT ACCOUNTING Sun ACCOUNTING FOR
EVERYTHINGBOP EOP REVENUES Products Sold X Price VALUE to buyer
Equals HUMAN CAPITAL ADD Wages and benefits What value to employee?
Pro-good expenditures What value to society? Taxation What value to
society? For products and energy bought and this process Free use
of the commons and public services & infrastructure Degradation
of land Water scarcity and degradation Air pollution: Impact on
people Air pollution: Impact on climate Air pollution: Impact on
people Solid waste Resource depletion Environmental Degradation
POSITIVE IMPACT NOT ACCOUNTED FOR Negative impact Financial Capital
Human Capital Man Built Capital Natural Capital Sun Sun Financial
Capital Human Capital Man Built Capital Natural Capital Sun
FINANCIAL P&L ACCOUNT REVENUES Products Sold X Price Products
Bought X Price Energy Bought X Price Employee Benefits Employee
Payroll Other expenditures Asset use costs Depreciation Financial
expenses Pro-good expenditures Taxation PROFIT COSTS
14. PRODUCT AND SUPPLY CHAIN The MONEY dimension of the supply
chain is routine; however The IMPACT of the supply chain on SOCIETY
(PEOPLE) and ENVIRONMENT (PLANET) are rarely implemented in a
coherent manner. This is very big next step! MULTI DIMENSION IMPACT
ACCOUNTING
15. MULTI DIMENSION IMPACT ACCOUNTING PRODUCT flowing through
the SUPPLY CHAIN Zero to start Costs this stage Profit this stage
Price this stage Zero to start Costs this stage Profit this stage
Price Stage 1 FINANCIAL ACCOUNTS EACH STEP OF THE SUPPLY CHAIN Cost
= Price stage 1 Costs Stage 2 Profit Stage 2 Cum Costs Cum Profit
Price Stage 2 Cost = Price stage 2 Costs Stage 3 Profit Stage 3 Cum
Costs Cum Profit Price Stage 3 Financial Dimension Zero to start
Initial Stage STATE STATEFLOWFLOW
16. MULTI DIMENSION IMPACT ACCOUNTING MBC Natural Capital Human
Capital PRODUCT flowing through the SUPPLY CHAIN ADJUSTMENTS TO
REFLECT IMPACT (EXTERNALITIES) Zero to start Costs this stage
Profit this stage Price this stage Zero to start Costs this stage
Profit this stage Price Stage 1 FINANCIAL ACCOUNTS EACH STEP OF THE
SUPPLY CHAIN Cost = Price stage 1 Costs Stage 2 Profit Stage 2
Impact Stage 1 Impact Stage 1 Impact Stage 1 Cum Costs Cum Profit
Price Stage 2 Impact Stage 2 Impact Stage 2 Impact Stage 2 Cum
Impact Cum Impact Cum Impact Cost = Price stage 2 Costs Stage 3
Profit Stage 3 Cum Costs Cum Profit Price Stage 3 Impact Stage 3
Impact Stage 3 Impact Stage 3 Cum Impact Cum Impact Cum Impact
Financial Dimension Zero to start Initial Stage STATE
STATEFLOWFLOW
17. MULTI DIMENSION IMPACT ACCOUNTING Sun BOP EOP Sun Financial
Capital Human Capital Man Built Capital Natural Capital Sun SunSun
Financial Capital Human Capital Man Built Capital Natural Capital
Sun Economic Activities PROCESS are responsible for changing the
STATE of everything
18. MULTI DIMENSION IMPACT ACCOUNTING Sun BOP EOP Sun Financial
Capital Human Capital Man Built Capital Natural Capital Sun SunSun
Financial Capital Human Capital Man Built Capital Natural Capital
Sun Financial Accounts describe Economic Activity Financial Costs
Financial Profit Financial Revenues Financial Balance Sheet BOP
Financial Balance Sheet EOP
19. The next slide shows how the money P&L report describes
the impact of the money transactions on the money balance sheet of
the operation while the IMPACTS of the operations on society and
the environment are ignored because they are outside the reporting
envelope. MULTI DIMENSION IMPACT ACCOUNTING
20. MULTI DIMENSION IMPACT ACCOUNTING Sun BOP EOP Sun Financial
Capital Human Capital Man Built Capital Natural Capital Sun SunSun
Financial Capital Human Capital Man Built Capital Natural Capital
Sun Financial Accounts describe Financial Impact Financial Costs
Financial Profit Financial Revenues Financial Balance Sheet BOP
Financial Balance Sheet EOP Impact Accounts reflect Externalities
Balance Sheet Changes Impact on Institutions Impact on People
Impact on Society Impact on Physical Impact on Knowledge Impact on
Resources Impact on Environment Impact on EcoSystem Balance Sheet
Changes Balance Sheet Changes Balance Sheet Changes
21. A better framework for reporting would be this MULTI
DIMENSION IMPACT ACCOUNTING
22. MULTI DIMENSION IMPACT ACCOUNTING Sun BOP EOP Sun Financial
Capital Human Capital Man Built Capital Natural Capital Sun SunSun
Financial Capital Human Capital Man Built Capital Natural Capital
Sun Financial Accounts describe Financial Impact Financial Costs
Financial Profit Financial Revenues Financial Balance Sheet BOP
Financial Balance Sheet EOP Impact Accounts reflect Externalities
Balance Sheet Changes Impact on Institutions Impact on People
Impact on Society Impact on Physical Impact on Knowledge Impact on
Resources Impact on Environment Impact on EcoSystem Balance Sheet
Changes Balance Sheet Changes Balance Sheet Changes
23. So think of all this miniaturized: MULTI DIMENSION IMPACT
ACCOUNTING
24. MULTI DIMENSION IMPACT ACCOUNTING Sun Every single PROCESS
has IMPACT on EVERYTHINGBOP EOP Sun Financial Capital Human Capital
Man Built Capital Natural Capital Sun SunSun Financial Capital
Human Capital Man Built Capital Natural Capital Sun
25. MULTI DIMENSION IMPACT ACCOUNTING Sun PRODUCT made by one
PROCESSBOP EOP Sun Financial Capital Human Capital Man Built
Capital Natural Capital Sun SunSun Financial Capital Human Capital
Man Built Capital Natural Capital Sun
26. MULTI DIMENSION IMPACT ACCOUNTING Sun BOP EOP Sun Financial
Capital Human Capital Man Built Capital Natural Capital Sun SunSun
Financial Capital Human Capital Man Built Capital Natural Capital
Sun PRODUCT PRODUCT the result of a SUPPLY CHAIN with series of
PROCESSES
27. MULTI DIMENSION IMPACT ACCOUNTING Sun One of the PROCESSES
in a PLACEBOP EOP Sun Financial Capital Human Capital Man Built
Capital Natural Capital Sun SunSun Financial Capital Human Capital
Man Built Capital Natural Capital Sun
28. MULTI DIMENSION IMPACT ACCOUNTING Sun One of the PROCESSES
in a PLACE and also a PROCESS in an ORGANIZATION BOP EOP Sun
Financial Capital Human Capital Man Built Capital Natural Capital
Sun SunSun Financial Capital Human Capital Man Built Capital
Natural Capital Sun
29. MULTI DIMENSION IMPACT ACCOUNTING Sun BOP EOP Sun Financial
Capital Human Capital Man Built Capital Natural Capital Sun SunSun
Financial Capital Human Capital Man Built Capital Natural Capital
Sun ORGANIZATION A big ORGANIZATION is the aggregation of many
operations or PROCESSES in many PLACES
30. MULTI DIMENSION IMPACT ACCOUNTING Sun Everybody has a role
in making this world of ours a better place BOP EOP Sun Financial
Capital Human Capital Man Built Capital Natural Capital Sun SunSun
Financial Capital Human Capital Man Built Capital Natural Capital
Sun PEOPLE
31. and specifically this mean making all the PROCESSES that
are used to support our QUALITY OF LIFE more efficient not only to
make more PROFIT but also to have a BETTER IMPACT on SOCIETY
(PEOPLE) and ENVIRONMENT (PLANET). MULTI DIMENSION IMPACT
ACCOUNTING
32. For example OIL AND GAS ... attention to the use of ENERGY;
attention to the matter of EMISSIONS into the atmosphere; attention
to the matter of waste water and solid matter polluting the
environment; attention to the matter of oil pollution during
production and transportation: and a whole lot more. MULTI
DIMENSION IMPACT ACCOUNTING
33. MULTI DIMENSION IMPACT ACCOUNTING Sun BOP Sun Financial
Capital Human Capital Man Built Capital Natural Capital Sun SunSun
Financial Capital Human Capital Man Built Capital Natural Capital
Sun EOPOIL REFINERY
34. For example in AGRICULTURE ... better stewardship of WATER
use; attention to pollution from run-off containing fertilizers,
herbicides, pesticides, etc; more responsible use of animal
medication to avoid risk of drug resistance important for human
health; the issue of worker exploitation and workplace safety; and
a whole lot more. MULTI DIMENSION IMPACT ACCOUNTING
35. MULTI DIMENSION IMPACT ACCOUNTING Sun BOP Sun Financial
Capital Human Capital Man Built Capital Natural Capital Sun SunSun
Financial Capital Human Capital Man Built Capital Natural Capital
Sun EOPIRRIGATION
36. For example TRANSPORTATION ... attention to the use of
ENERGY; attention to the matter of EMISSIONS into the atmosphere;
attention to the matter of waste water and solid matter polluting
the environment; and a whole lot more. MULTI DIMENSION IMPACT
ACCOUNTING
37. MULTI DIMENSION IMPACT ACCOUNTING Sun BOP Sun Financial
Capital Human Capital Man Built Capital Natural Capital Sun SunSun
Financial Capital Human Capital Man Built Capital Natural Capital
Sun EOPCONTAINER SHIP
38. For example OFFICE BUILDINGS ... attention to the use of
ENERGY; attention to the matter of EMISSIONS into the atmosphere;
and a whole lot more. MULTI DIMENSION IMPACT ACCOUNTING
39. MULTI DIMENSION IMPACT ACCOUNTING Sun BOP Sun Financial
Capital Human Capital Man Built Capital Natural Capital Sun SunSun
Financial Capital Human Capital Man Built Capital Natural Capital
Sun EOPCITY BUILDINGS
40. For example HEAVY INDUSTRY ... attention to the use of
ENERGY; attention to the matter of EMISSIONS into the atmosphere;
attention to the matter of waste water and solid matter polluting
the environment; the issue of worker exploitation and workplace
safety; and a whole lot more. MULTI DIMENSION IMPACT
ACCOUNTING
41. MULTI DIMENSION IMPACT ACCOUNTING Sun BOP Sun Financial
Capital Human Capital Man Built Capital Natural Capital Sun SunSun
Financial Capital Human Capital Man Built Capital Natural Capital
Sun EOPHOT STRIP ROLLING MILL
42. For example MINING ... attention to the use of ENERGY;
attention to the matter of EMISSIONS into the atmosphere;
degradation of the land; attention to the matter of waste water and
solid matter polluting the environment; the issue of worker
exploitation and workplace safety; and a whole lot more. MULTI
DIMENSION IMPACT ACCOUNTING
43. MULTI DIMENSION IMPACT ACCOUNTING Sun BOP EOP Sun Financial
Capital Human Capital Man Built Capital Natural Capital Sun SunSun
Financial Capital Human Capital Man Built Capital Natural Capital
Sun GOLD MINING IN PERU
44. For example CONSTRUCTION ... attention to the use of
ENERGY; attention to the matter of EMISSIONS into the atmosphere;
attention to the matter of waste water and solid matter polluting
the environment; the issue of worker exploitation and workplace
safety; and a whole lot more. MULTI DIMENSION IMPACT
ACCOUNTING
45. MULTI DIMENSION IMPACT ACCOUNTING Sun BOP Sun Financial
Capital Human Capital Man Built Capital Natural Capital Sun SunSun
Financial Capital Human Capital Man Built Capital Natural Capital
Sun EOPCONSTRUCTION IN THE MIDDLE EAST
46. CONCLUDING OBSERVATION ... more than anything else
improving the EFFICIENCY of PROCESS will change the trajectory of
global socio-enviro-economic performance; in the past efficiency
has simply been about less COSTS and more PROFIT; in the future
EFFICIENCY has to be about better QUALITY OF LIFE for PEOPLE with
very little of no damage to the ENIRONMENT (PLANET) MULTI DIMENSION
IMPACT ACCOUNTING
47. INTEGRATED FINANCIAL AND IMPACT ACCOUNTING ... integration
of financial and impact accounting will make it possible for very
much better decisions to be made. high efficiency can be rewarded
and there can be social accountability for bad practices and low
efficiency. MULTI DIMENSION IMPACT ACCOUNTING
48. CHIEF PERFORMANCE OFFICER Maybe in the near future it will
be possible to rename the CFO (Chief Financial Officer) to be the
CPO the Chief Performance Officer, a C-level position that
integrates both financial performance and the impact on society
(people) and the environment (planet). MULTI DIMENSION IMPACT
ACCOUNTING
49. Follow up: Request for Feedback Getting these ideas fleshed
out into a clear, simple but comprehensive structure is a big job
and remains a work-in- progress. Many organizations are making
progress with this, but there is no broad universal framework yet
that will enable all the pieces to come together and work
efficiently. I would like to get feedback from anyone and everyone
to help move this initiative forward. While I have some clear
concepts about much of this architecture, there are many details
that I do not know enough about and need help. So, please feel free
to contact me ([email protected]). Please put something relevant
and catchy in the subject line. MULTI DIMENSION IMPACT
ACCOUNTING
50. Some links and contact information: Peter Burgess
[email protected] 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