Mdia p3-03-perspectives-150420

1. MULTI DIMENSION IMPACT ACCOUNTING
File: Characteristics-of-an-Economic-Activity.odp Peter Burgess (c) All rights reserved
MDIA
PERSPECTIVES

2. TRIPLE BOTTOM LINE (TBL)
This idea of the TBL is that a company
should not only be looking at the 'profit'
performance but also impact on people
and planet:
● PROFIT;
● PEOPLE;
● PLANET.
This good, but it is only the perspective of
the ORGANIZATION.
MULTI DIMENSION IMPACT ACCOUNTING

3. PERSPECTIVES
A unique object can look very different
depending on the position of the observer.
Our socio-enviro-economic-system is
complex and multiple perspectives are
needed:
● a PEOPLE perspective;
● an ORGANIZATION perspective;
● a PRODUCT perspective;
● a PLACE perspective;
● etc.
MULTI DIMENSION IMPACT ACCOUNTING

4. MULTI DIMENSION IMPACT ACCOUNTING
Putting PEOPLE at the Center

5. MULTI DIMENSION IMPACT ACCOUNTING
Putting ORGANIZATION at the Center

6. MULTI DIMENSION IMPACT ACCOUNTING
Putting PRODUCT at the Center

7. MULTI DIMENSION IMPACT ACCOUNTING
Putting PLACE at the Center

8. THE CHALLENGE
The challenge is to have a data system
that is meaningful no matter what aspect
of the socio-enviro-economic-system is
being measured, and no matter what
perspective is in play. Hence, the need for
a Multi Dimension and Multi Perspective
data framework.
MULTI DIMENSION IMPACT ACCOUNTING

9. THE METRIC SOLUTION
● MDIA is borrows from conventional
double entry accounting where there
are Balance Sheet and Profit and
Loss Accounts.
● The building block for MDIA is similar:
… State1-Flow-Process-Flow-State2
that can be applied to every economic
activity in any setting anywhere.
Conventional double entry accounting is very
good for money transactions, but ignores non-
money transactions and externalities!
MULTI DIMENSION IMPACT ACCOUNTING

10. THE METRIC SOLUTION (cont.)
● This MDIA building block will aggregate
to enable summary reporting; and
● enable drill down to activities that are
relevant at any and all subsidiary levels
down to the individual level.
MULTI DIMENSION IMPACT ACCOUNTING

11. SOCIO-ENVIRO-ECONOMIC
● SOCIO is a PEOPLE perspective.
Everything should result in people
progressing.
● ENVIRO is about NATURE and the
ultimate source of everything that
people can ever have; and,
● ECONOMIC is the man built structures
and systems (MBSS) that have been
built to enable progress.
MULTI DIMENSION IMPACT ACCOUNTING

12. YELLOW:
The PEOPLE piece
DIRTY BROWN:
MBSS (MAN-BUILT STRUCTURES AND SYSTEMS)
GREEN:
NATURAL CAPITAL, NATURE'S BOUNTY
MULTI DIMENSION IMPACT ACCOUNTING

13. MULTI DIMENSION IMPACT ACCOUNTING

14. MULTI DIMENSION IMPACT ACCOUNTING

15. MULTI DIMENSION IMPACT ACCOUNTING

16. MULTI DIMENSION IMPACT ACCOUNTING

17. MULTI DIMENSION IMPACT ACCOUNTING

18. MULTI DIMENSION IMPACT ACCOUNTING

19. Trajectory to disaster!
This must be changed
to give this …
MULTI DIMENSION IMPACT ACCOUNTING

20. MULTI DIMENSION IMPACT ACCOUNTING

21. PEOPLE progressing
MBSS efficient
PLANET healthy
MULTI DIMENSION IMPACT ACCOUNTING

22. SO …
What is the PEOPLE perspective?
What is the ORGANIZATION perspective?
What is the PRODUCT perspective?
What is the PLACE perspective?
How must the MBSS be changed
to get the best possible results?
How can PEOPLE make better
decisions?
MULTI DIMENSION IMPACT ACCOUNTING

23. Part of the answer is
BETTER METRICS
MULTI DIMENSION IMPACT ACCOUNTING

24. The next slide shows the
components of the system
by segment
MULTI DIMENSION IMPACT ACCOUNTING

25. MULTI DIMENSION IMPACT ACCOUNTING
ELEMENTS OF THE SYSTEM by SEGMENT
Financial
Capital
Human
Capital
Man Built
Structures
& Systems
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

26. Note that FINANCIAL CAPITAL has
been separated out from the other
parts of the MBSS segment
Note also the addition of SUN to
enable metrics about renewables
MULTI DIMENSION IMPACT ACCOUNTING

27. THE METRIC SOLUTION
● The building block for MDIA is the idea
of State1-Flow-Process-Flow-State2
that can be applied to every economic
activity;
● It will aggregate to enable summary
reporting; and
● It will enable drill down to activities
that are relevant at the individual level;
● It will function for every PERSPECTIVE.
MULTI DIMENSION IMPACT ACCOUNTING

28. THE NEXT SLIDE SHOWS:
(1) … STATE at the Beginning of the
Period (BOP)
(2) … STATE at the End of Period (EOP)
(3) … a financial profit and loss about the
economic activity or flow that links
the two states
MULTI DIMENSION IMPACT ACCOUNTING

29. 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
Structures
& Systems
Natural
Capital
Sun SunSun
Financial
Capital
Human
Capital
Man Built
Structures
& Systems
Natural
Capital
Sun
COSTS

30. But the financial accounts are only
about money transactions, nothing
about impact on people and planet
and externalities ignored!
Financial accounts are also from the
perspective of the organization.
MULTI DIMENSION IMPACT ACCOUNTING

31. MULTI DIMENSION IMPACT ACCOUNTING
Sun
BOP EOP
Sun
Financial
Capital
Human
Capital
Man Built
Structures
& Systems
Natural
Capital
Sun SunSun
Financial
Capital
Human
Capital
Man Built
Structures
& Systems
Natural
Capital
Sun
Financial Accounts describe Economic Activity
Financial Costs
Financial Profit
Financial Revenues
Financial
Balance
Sheet
BOP
Financial
Balance
Sheet
EOP

32. MULTI DIMENSION IMPACT ACCOUNTING
Sun
BOP EOP
Sun
Financial
Capital
Human
Capital
Man Built
Structures
& Systems
Natural
Capital
Sun SunSun
Financial
Capital
Human
Capital
Man Built
Structures
& Systems
Natural
Capital
Sun
FINANCIAL ACCOUNTS
DESCRIBE ECONOMIC
ACTIVITY IN FINANCIAL
OR MONEY TERMS
WHILE COMPLETELY
IGNORING IMPACT
ON EVERYTHING ELSE
Financial Accounts describe Economic Activity

33. 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
Structures
& Systems
Natural
Capital
Sun SunSun
Financial
Capital
Human
Capital
Man Built
Structures
& Systems
Natural
Capital
Sun
COSTS

34. 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
Structures
& Systems
Natural
Capital
Sun Sun
Financial
Capital
Human
Capital
Man Built
Structures
& Systems
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

35. 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
Structures
& Systems
Natural
Capital
Sun Sun
Financial
Capital
Human
Capital
Man Built
Structures
& Systems
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

36. 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
Structures
& Systems
Natural
Capital
Sun Sun
Financial
Capital
Human
Capital
Man Built
Structures
& Systems
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

37. This framework needs to be applied as a
PEOPLE perspective:
(1) … STATE (quality of life) at the Beginning of
the Period (BOP)
(2) … STATE (quality of life) at the End of
the Period (EOP)
(3) … all the activities or flows that had impact
and changed the state (quality of life)
during the period
MULTI DIMENSION IMPACT ACCOUNTING

38. This framework needs to be applied as a
PLACE perspective:
(1) … state of the place at the Beginning of
the Period (BOP)
(2) … state of the place at the End of the
Period (EOP)
(3) … all the activities or flows that had impact
and changed the state of the place during
the period
MULTI DIMENSION IMPACT ACCOUNTING

39. FOR A PRODUCT THERE IS:
(1) … STATE of the PRODUCT at the Beginning of
the Period (BOP)
(2) … STATE of the PRODUCT at the End of Period
(3) … all the activities or flows associated with the
product that have impacts and changed state
during the period
A product flows through a life cycle that includes
supply chain, use, and post use waste chain.
In the process there is impact on people, place
and organization … and there is impact on
people, profit and planet.
MULTI DIMENSION IMPACT ACCOUNTING

40. FOR A PRODUCT
A product flows through a life cycle that includes
supply chain, use, and post use waste chain.
In the process there is impact on people, place
and organization … and there is impact on
people, profit and planet.
PRODUCT, that is goods and services, is
the link that connects everything AND
helps deliver Quality of Life for PEOPLE
MULTI DIMENSION IMPACT ACCOUNTING