mdia p3-01-why-what-how-150420

MDIAWHY? WHAT? HOW?

MULTI DIMENSION IMPACT ACCOUNTING

The GOAL is to design and deploy a system of metrics for management that accounts for impact on people and planet as

rigorously as double entry accounting accounts for money transactions that

impact profit


Corporate money profit performance over the past fifty

years has been impressive


But labor income over the past fifty years … not so good


WHY?


The following slides show some

important trends!


Corporate money profit performance over the past fifty years has been impressive


Huge recent economic growth but a finite planet!


MDIAWhy? More reason!


YELLOW: The PEOPLE piece … Human Capital (NC)

DIRTY BROWN: The ECONOMIC piece … Man Built Capital (MBC)

GREEN:NATURE, ENVIRONMENT … Natural Capital (NC)


COLOR KEY

Trajectory to disaster!

This must be changed to this …


PEOPLE progressing

MBC* efficient

PLANET healthy


* MBC … Man Built Capital

WHAT?


MDIA is ETRICS

The double entry idea is very powerful:


MDIAMULTI DIMENSION IMPACT ACCOUNTING

is a system of metrics to enable better management of

everything that matters.


MDIAMULTI DIMENSION IMPACT ACCOUNTING

It is en extension of conventional accounting and

builds on the amazing power of the double entry system


State … B/S

Flow … P&L

New State … B/S


Put STATE side by side and there is a very useful time series:


Add more detail into the STATE → FLOW → STATE model and it might look

something like this:


PROBLEM!Conventional Accounting only measures this part of

the total system:


Conventional money profit accounting works very well for financial performance … that is

impact on corporate profits and stock value.


MDIAHow?


You Manage what you Measure.Attributed to Peter Drucker

When you change the way the game is scored, you change the way the game is played.



The first step is to design and develop a data architecture that is congruent with the

realities of the modern global socio-enviro-economic system

Quality of Life and Standard of Living for PEOPLE should be

measured with a system that is just as powerful.


Resource Depletion should be measured rigorously and

incorporated into all aspects of Impact Accounting.


Ecosystem Services and Bio-Degradation should be

measured rigorously and incorporated into all aspects of

Impact Accounting.



The data architecture is already in a relatively complete form.


A massive amount of scientific data already exists and needs to be mapped to the MDIA data

architecture.


New units of measure need to be defined so that scientific data may be converted into

these units of measure.


A characteristic of these new units of measure is that they will enable complex details to

be summarized easily for reporting and conversation.


These new units of measure will NOT merely be a market monetization of an element. They will be new units that have the properties of all

physical measures.


Standard Values need to be established for EVERYTHING.


Standard Values have much the same characeristics as

Standard Costs in commercial cost accounting.


In cost accounting Standard Costs are a way massively to

simplify costing without losing much, if any, of the utility of the

cost accounting information.


Data about PRODUCTS needs to be organized. The IMPACT of every PRODUCT in the market

should be 'a click away'.


Data about the choices PEOPLE make needs to be

organized so that there may be ways for PEOPLE to earn

rewards for making choices that are good for themselves,

the society and the enviroment.


Data business performance will include IMPACT as rigorously

as there is accounting for PROFIT.


PROCESS is also an element of the data architecture. There should be Standards for all

processes.


SUPPLY CHAIN may be built up from PROCESS standards.


COMPANIES have financial accounts. MDIA standards may

be used to convert financial accounts to impact accounts.


Operating units of companies and entities in the supply chain can be held to account based on information originating in a

PLACE


It should become more and more difficult for anti-social

operational performance to be possible simply because it is

out of sight.


Accountability is a public matter …

mdia p3-01-why-what-how-150420

Data & Analytics

state flow state model

system of metrics

capital mbc green

money transactions

mbc man

total system

double entry idea

corporate profits