TVA p3 DRAFT C2
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This document discusses true value accounting and sustainability metrics. It begins with several slides on complexity and problems with current metrics like profit, GDP, and money as a unit of measure. It then presents a framework with three categories: human capital, man built capital, and natural capital. Several slides discuss improving metrics to consider all perspectives of financial, social, and environmental impacts. The document argues that moving from financial to impact accounting is needed to incorporate externalities. In the end, it emphasizes that people are both the problem and the solution, and that individual choices and parenting are important to sustainability.
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TVA p3 DRAFT C2
- 1. WORKING DRAFT - C File: TVA-p3-DRAFT-C-160420.odp Peter Burgess (c) All rights reserved TRUE VALUE ACCOUNTING
- 2. BE THE CHANGE "BE THE CHANGE THAT YOU WISH TO SEE IN THE WORLD" - GANDHI featuring talks on ART + SCIENCE + INTEGRITY + FOCUS TRUE VALUE ACCOUNTING
- 3. TRUE VALUE ACCOUNTING Peter Drucker, a well known management guru famously said: “You can't manage what you don't measure”
- 4. Complex system … competing agendas TRUE VALUE ACCOUNTING
- 5. THIS IS A COMPLEX AND CHAOTIC SYSTEM TRUE VALUE ACCOUNTING
- 6. WHAT ARE THE RIGHT THINGS TO MEASURE? TRUE VALUE ACCOUNTING
- 7. … AND WHAT UNITS OF MEASURE TO USE? TRUE VALUE ACCOUNTING
- 8. … AND WHERE TO MEASURE ? TRUE VALUE ACCOUNTING
- 9. I WILL ANCHOR MY REMARKS AROUND THE LETTER P TRUE VALUE ACCOUNTING
- 19. PROMOTION, PUBLICITY, PUBLIC RELATIONS TRUE VALUE ACCOUNTING
- 20. Complex system … competing agendas TRUE VALUE ACCOUNTING
- 23. MONEY AS A UNIT OF MEASURE TRUE VALUE ACCOUNTING
- 25. THE VARIABLE QUANTITY OF MONEY TRUE VALUE ACCOUNTING
- 26. MULTI DIMENSION IMPACT ACCOUNTING COMPONENTS OF US MONEY SUPPLY
- 27. BANKERS AND THEIR DECISIONS ABOUT MONEY TRUE VALUE ACCOUNTING
- 28. MULTI DIMENSION IMPACT ACCOUNTING US FEDERAL RESERVE ASSETS
- 31. STOCK MARKET PRICES TRUE VALUE ACCOUNTING
- 32. GDP GROSS DOMESTIC PRODUCT TRUE VALUE ACCOUNTING
- 33. GDP GROWTH SIMPLY WRONG FOR ALL SORTS OF REASONS TRUE VALUE ACCOUNTING
- 37. Complex system … competing agendas TRUE VALUE ACCOUNTING
- 38. FINANCIAL WEALTH HAS BEEN EXTRACTED FROM NATURAL CAPITAL BY THE LABOR OF PEOPLE TRUE VALUE ACCOUNTING
- 39. … BUT NOT EASILY IDENTIFIED USING THE PREVAILING MAIN METRICS. TRUE VALUE ACCOUNTING
- 40. WHAT ABOUT QUALITY OF LIFE FOR PEOPLE TRUE VALUE ACCOUNTING
- 42. WHAT ABOUT THE SUSTAINABILITY OF THE PLANET TRUE VALUE ACCOUNTING
- 45. A GOOD SYSTEM OF METRICS CAN BE SUMMARIZED FOR AGGREGATE ANALYSIS … AND DRILLED DOWN TO A LEVEL WHERE GOOD SMALL DECISIONS CAN BE MADE. TRUE VALUE ACCOUNTING
- 46. A GOOD SYSTEM OF METRICS MUST WORK FOR ALL THE PERSPECTIVES TRUE VALUE ACCOUNTING
- 48. Complex system … competing agendas TRUE VALUE ACCOUNTING
- 49. THIS SYSTEM COMPRISES: ● THE PEOPLE SEGMENT ●MAN BUILT CAPITAL ● THE PLANET SEGMENT TRUE VALUE ACCOUNTING
- 50. MAN BUILT CAPITAL (MBC) ●FINANCIAL CAPITAL; ●PHYSICAL CAPITAL; ●KNOWLEDGE CAPITAL; ●INSTITUTIONAL CAPITAL; TRUE VALUE ACCOUNTING
- 51. MAN BUILT CAPITAL (MBC) SHOULD BE IMPROVING QUALITY OF LIFE WITHOUT DEGRADING THE PLANET TRUE VALUE ACCOUNTING
- 52. THE HISTORY IS VERY MUCH DIFFERENT … TRUE VALUE ACCOUNTING
- 53. YELLOW: The PEOPLE piece … Human Capital (HC) DIRTY BROWN: The ECONOMIC piece … Man Built Capital (MBC) GREEN: NATURE, ENVIRONMENT … Natural Capital (NC) COLOR KEY TRUE VALUE ACCOUNTING
- 54. Hum an Capital Man Built Capital Natural Capital TRUE VALUE ACCOUNTING
- 55. Hum an Capital Man Built Capital Natural Capital TRUE VALUE ACCOUNTING
- 56. Hum an Capital Man Built Capital Natural Capital TRUE VALUE ACCOUNTING
- 57. Hum an Capital Man Built Capital Natural Capital TRUE VALUE ACCOUNTING
- 58. Hum an Capital Man Built Capital Natural Capital TRUE VALUE ACCOUNTING
- 59. Hum an Capital Man Built Capital Natural Capital TRUE VALUE ACCOUNTING
- 60. AN EXISTENTIAL RISK … A TRAJECTORY TO DISASTER TRUE VALUE ACCOUNTING
- 61. Hum an Capital Man Built Capital Natural Capital TRUE VALUE ACCOUNTING
- 62. PEOPLE progressing MBC* efficient PLANET healthy * MBC … Man Built Capital TRUE VALUE ACCOUNTING
- 64. STEADY STATE TRUE VALUE ACCOUNTING
- 65. POSITIVE PROGRESS TRUE VALUE ACCOUNTING
- 66. DETERIORATION OF STATE TRUE VALUE ACCOUNTING
- 67. PROGRESS IS CHANGE IN STATE TRUE VALUE ACCOUNTING
- 68. Period 1 2 3 4 5 6 7 8 9 10 11 12 HC MBC NC TRUE VALUE ACCOUNTING HC MBC NC HC MBC NC HC MBC NC HC MBC NC HC MBC NC HC MBC NC HC MBC NC
- 69. Period 1 2 3 4 5 6 7 8 9 10 11 12 HC MBC NC TRUE VALUE ACCOUNTING HC MBC NC HC MBC NC HC MBC NC HC MBC NC HC MBC NC HC MBC NC HC MBC NC HC MBC NC HC MBC NC HC MBC NC HC MBC NC
- 70. PRODUCTIVITY, PROFITS AND PAYROLL TRUE VALUE ACCOUNTING
- 71. MULTI DIMENSION IMPACT ACCOUNTING
- 72. PRODUCTIVITY, PROFITS AND POLLUTION TRUE VALUE ACCOUNTING
- 73. POLLUTION: Plastics, Solid waste, Greenhouse Gases, SO2, NOX, Particulates, Water toxins, acidity, Land degradation. TRUE VALUE ACCOUNTING
- 74. MULTI DIMENSION IMPACT ACCOUNTING
- 77. METRICS DOMINATED BY THE BUSINESS PERSPECTIVE TRUE VALUE ACCOUNTING
- 78. PROFITS AND STOCK PRICES (INVESTOR WEALTH) TRUE VALUE ACCOUNTING
- 81. MAN BUILT CAPITAL TRUE VALUE ACCOUNTING
- 82. Complex system … competing agendas TRUE VALUE ACCOUNTING
- 84. Hum an Capital Man Built Capital Natural Capital TRUE VALUE ACCOUNTING
- 85. Fundamentals of the Socio-Enviro-Economic System Human Capital Man Built Capital Natural Capital Hum an Capital Man Built Capital Natural Capital TRUE VALUE ACCOUNTING
- 86. Fundamentals of the Socio-Enviro-Economic System Human Capital Man Built Capital Natural Capital TRUE VALUE ACCOUNTING
- 87. Fundamentals of the Socio-Enviro-Economic System Financial Capital Human Capital Man Built Capital Natural Capital Man Built Capital Natural Capital Human Capital Split out Financial Capital from other components of Man Built Capital TRUE VALUE ACCOUNTING
- 88. Fundamentals of the Socio-Enviro-Economic System Financial Capital Human Capital Man Built Capital Natural Capital SunSun Man Built Capital Natural Capital Sun Human Capital Add Sun … the source of all energy Split out Financial Capital from other components of Man Built Capital TRUE VALUE ACCOUNTING
- 89. Fundamentals of the Socio-Enviro-Economic System Financial Capital Human Capital Man Built Capital Natural Capital SunSun Financial Capital Human Capital Man Built Capital Natural Capital SunSunSun Man Built Capital Natural Capital Sun Human Capital Add Sun … the source of all energy Split out Financial Capital from other components of Man Built Capital Reorder because Financial Capital metrics exist TRUE VALUE ACCOUNTING
- 93. IMPACT ACCOUNTING Moving from Financial to Impact Accounting STATE BOP … ACTIVITY ACCOUNTING … STATE EOP TRUE VALUE ACCOUNTING
- 94. Moving from Financial to Impact Accounting STATE BOP … ACTIVITY ACCOUNTING … STATE EOP ● Financial accounting; ● P&L and Balance Sheets (BOP and EOP); ● Financial accounting plus GOOD impacts; ● Financial accounting minus BAD impacts; ● Financial accounting with BOTH impacts; ● Bringing in IMPACTS on externalities; ● Expanding the REPORTING ENVELOPE; ● Accounting for IMPACT on ALL capitals. TRUE VALUE ACCOUNTING
- 95. FINANCIAL ACCOUNTS Financial Accounts describe Economic Activity 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 TRUE VALUE ACCOUNTING
- 96. FINANCIAL ACCOUNTS OF AN ENTERPRISE Financial Accounts describe Economic Activity 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 Cash Current Assets Fixed Assets Intangible Assets TOTAL ASSETS Current Liabilities Long Term Debt Owners' Equity Cash Current Assets Fixed Assets Intangible Assets TOTAL ASSETS Current Liabilities Long Term Debt Owners' Equity Balance Sheet BOP Balance Sheet EOP TRUE VALUE ACCOUNTING
- 97. FINANCIAL ACCOUNTS ADD positive impact not accounted for 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 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 TRUE VALUE ACCOUNTING
- 98. FINANCIAL ACCOUNTS DEDUCT negative impact not accounted for 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 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 TRUE VALUE ACCOUNTING
- 99. FINANCIAL ACCOUNTS ACCOUNTING FOR EVERYTHING 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 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 TRUE VALUE ACCOUNTING
- 100. 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 TRUE VALUE ACCOUNTING
- 101. Financial Accounts describe Financial Impact Impact Accounts reflect Externalities 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 TRUE VALUE ACCOUNTING 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
- 102. 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 Impact Accounts reflect Externalities 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 TRUE VALUE ACCOUNTING 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
- 103. TRUE VALUE ACCOUNTING TRUE VALUE ACCOUNTING
- 104. TVA MODIFIES PROFIT REPORTING TRUE VALUE ACCOUNTING
- 106. TVA APPLIES TO PLACE WHERE PEOPLE LIVE TRUE VALUE ACCOUNTING
- 107. TVA APPLIES TO PROCESSES THAT COMPANIES USE TRUE VALUE ACCOUNTING
- 108. TVA APPLIES TO PRODUCTS THAT PEOPLE USE TRUE VALUE ACCOUNTING
- 109. TVA APPLIES EVERYWHERE TRUE VALUE ACCOUNTING
- 110. TVA APPLIES TO EVERYTHING TRUE VALUE ACCOUNTING
- 111. PEOPLE ARE THE PROBLEM TRUE VALUE ACCOUNTING
- 112. PEOPLE ARE THE SOLUTION TRUE VALUE ACCOUNTING
- 113. PEOPLE ARE RESPONSIBLE FOR ALL THE DECISIONS THAT GET MADE TRUE VALUE ACCOUNTING
- 114. PEOPLE ARE RESPONSIBLE FOR ALL THE PRODUCTS THAT ARE BOUGHT … OR NOT TRUE VALUE ACCOUNTING
- 115. PEOPLE WASTE TOO MUCH TRUE VALUE ACCOUNTING
- 116. PEOPLE EAT FOODS THAT ARE UNHEALTHY TRUE VALUE ACCOUNTING
- 117. PEOPLE DRINK DRINKS THAT ARE UNHEALTHY TRUE VALUE ACCOUNTING
- 118. TOO MANY PEOPLE CONSUME TOO MUCH ALCOHOL TRUE VALUE ACCOUNTING
- 119. TOO MANY PEOPLE SMOKE TOO MUCH TRUE VALUE ACCOUNTING
- 120. TOO MANY PEOPLE USE PAIN KILLERS EXCESSIVELY TRUE VALUE ACCOUNTING
- 121. PEOPLE BUY CLOTHES MADE FROM TEXTILES THAT ARE UNSUSTAINABLE TRUE VALUE ACCOUNTING
- 122. PEOPLE BUY CLOTHES MADE IN ANTI-SOCIAL WAYS TRUE VALUE ACCOUNTING
- 123. PEOPLE DON'T EXERCISE ENOUGH TRUE VALUE ACCOUNTING
- 124. TOO MANY PEOPLE LIVE IN BUILDINGS THAT ARE INEFFICIENT TRUE VALUE ACCOUNTING
- 125. TOO MANY PEOPLE DRIVE CARS AND PICKUPS THAT ARE INEFFICIENT TRUE VALUE ACCOUNTING
- 126. PARENTING ONE OF THE MOST IMPORTANT THINGS THAT PEOPLE DO TRUE VALUE ACCOUNTING
- 128. PROBLEM ONE-ON-ONE CARING JOBS ARE SOME OF THE MOST VALUABLE, YET THE LOWEST PAID TRUE VALUE ACCOUNTING
- 129. PROBLEM IN THE PREVAILING SYSTEM, SHORT TERM PROFIT POTENTIAL IS VALUED … LONG TERM IMPACTS ARE NOT TRUE VALUE ACCOUNTING
- 130. PROBLEM IN THE PREVAILING SYSTEM, SHORT TERM PROFIT POTENTIAL IS VALUED … LONG TERM IMPACTS ARE NOT TRUE VALUE ACCOUNTING
- 131. PROBLEM EXISTENTIAL RISKS ARE IGNORED UNTIL THEY IMPACT PROFITS TRUE VALUE ACCOUNTING
- 132. PROBLEM FUTURE PROFITS HAVE A MARKET VALUE, BUT THERE IS NO MARKET MECHANISM FOR EXISTENTIAL RISKS TRUE VALUE ACCOUNTING
- 133. METRICS HAVE TO BE RELEVANT AT THE PERSON LEVEL TRUE VALUE ACCOUNTING
- 134. EFFECTIVE METRICS ENABLE INCENTIVES FOR GOOD DECISIONS AND CONSTRUCTIVE BEHAVIOR TRUE VALUE ACCOUNTING
- 135. EFFECTIVE METRICS OPTIMIZE OUTCOMES FOR QUALITY OF LIFE, ENVIRONMENT AND FINANCIAL CAPITAL TRUE VALUE ACCOUNTING
- 136. EVERY PRODUCT IS PROFILED WITH ITS TRUE COST AND TRUE VALUE TRUE VALUE ACCOUNTING
- 137. EVERY PRODUCT IS PROFILED WITH ITS TRUE COST AND TRUE VALUE TRUE VALUE ACCOUNTING
- 138. EVERY PROCESS IS PROFILED WITH ITS TRUE COST AND TRUE VALUE TRUE VALUE ACCOUNTING
- 139. EVERY COMPANY IS PROFILED WITH ITS TRUE COST AND TRUE VALUE TRUE VALUE ACCOUNTING
- 140. EVERY PLACE IS PROFILED WITH ITS TRUE COST AND TRUE VALUE TRUE VALUE ACCOUNTING
- 141. Complex system … competing agendas TRUE VALUE ACCOUNTING
- 142. REMINDER This slideset is A WORK-IN-PROGRESS. It will be upgraded periodically. It is part of a series of more than 100 slidesets. Navigation to these is available here: http://www.truevaluemetrics.org/DBadmin/DBtxt001.php?vv1=N1-Slidesets-p3 More about the True Value Metrics initiative is at: http://www.truevaluemetrics.org/DBadmin/DBtxt001.php?vv1=list0100-MainNav FEEDBACK is welcome. Please email to Peter Burgess … peterbnyc@gmail.com … with a catchy phrase in the subject line so that it gets attention, and please identify the specific slideset(s) or webpage involved. TRUE VALUE ACCOUNTING
- 143. THANK YOU Some links and contact information: Email 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 to other resources: http://www.truevaluemetrics.org/DBadmin/DBtxt001.php?vv1=list0100-MainNav#1 TRUE VALUE ACCOUNTING