Mdia p3-03-characteristics-of-an-economic-activity-150420

MULTI DIMENSION IMPACT ACCOUNTING

File: Characteristics-of-an-Economic-Activity.odp Peter Burgess (c) All rights reserved

MDIACharacteristics of an

ECONOMIC ACTIVITY

ECONOMIC ACTIVITY● Economic activity is everywhere;● Economic activity enables quality of life and standard of living;

● Economic activities use inputs … labor, materials, knowhow, natural resources;

● Economic activities produce products;● The process determines efficiency;● There are impacts because of resource use and waste generation;

● A part of the supply chain of products.



Sun

BOP EOP

Sun

FinancialCapital

HumanCapital

Man BuiltStructures& Systems

NaturalCapital

Sun SunSun

FinancialCapital

HumanCapital


NaturalCapital

Sun

Financial Accounts describe Economic Activity

Financial Costs

Financial Profit

Financial Revenues

FinancialBalance

Sheet

BOP

FinancialBalance

Sheet

EOP


Sun

BOP EOP

Sun

FinancialCapital

HumanCapital


NaturalCapital

Sun SunSun

FinancialCapital

HumanCapital


NaturalCapital

Sun

IN FINANCIAL OR MONEY TERMS

WHILE COMPLETELYIGNORING IMPACT

ON EVERYTHING ELSE



Sun

FINANCIAL P&L ACCOUNT


REVENUESProducts 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

FinancialCapital

HumanCapital


NaturalCapital

Sun SunSun

FinancialCapital

HumanCapital


NaturalCapital

Sun

COSTS


Sun

ADD positive impact not accounted forBOP EOP


VALUE to buyerEquals

HUMAN CAPITAL ADD

Wages and benefitsWhat value to

employee?

Pro-good expendituresWhat value to society?

TaxationWhat value to society?

POSITIVE IMPACT NOTACCOUNTED

FOR

FinancialCapital

HumanCapital


NaturalCapital

Sun Sun

FinancialCapital

HumanCapital


NaturalCapital

Sun





Employee Benefits

Employee Payroll

Other expenditures

Asset use costs

Depreciation

Financial expenses


Taxation

PROFIT

COSTS


Sun

DEDUCT negative impact not accounted forBOP EOP

For products andenergy bought

and this process

Free use of thecommons andpublic services& infrastructure

Degradationof land

Water scarcityand degradationAir pollution:

Impact on peopleAir pollution:

Impact on climate

Air pollution:Impact on people

Solid waste

Resourcedepletion

Environmental Degradation

Negativeimpact

File: MDIA-Framework-004-150411-WIP.odp Peter Burgess (c) All rights reserved

FinancialCapital

HumanCapital


NaturalCapital

Sun Sun

FinancialCapital

HumanCapital


NaturalCapital

Sun





Employee Benefits

Employee Payroll

Other expenditures

Asset use costs

Depreciation

Financial expenses


Taxation

PROFIT

COSTS


Sun

ACCOUNTING FOR EVERYTHINGBOP EOP



HUMAN CAPITAL ADD


employee?


TaxationWhat value to society?


and this process


Degradationof land



Impact on climate


Solid waste

Resourcedepletion



FOR

Negativeimpact

FinancialCapital

HumanCapital


NaturalCapital

Sun Sun

FinancialCapital

HumanCapital


NaturalCapital

Sun





Employee Benefits

Employee Payroll

Other expenditures

Asset use costs

Depreciation

Financial expenses


Taxation

PROFIT

COSTS


Sun

FOODActivities

IndividualQoL

IndividualQoL

Use of Pesticides

Use of Land

The IMPACT of FOOD

Use of Water

Use of Fertilizers

Air Pollution

Use of Growth Hormonesand Antibiotics

Use of Energy

Use of Equipment

Use of Labor Inputs

Money Price

Money Profit

Money Cost

True Value

Value Add

True Cost

Sun

BOP

FinancialCapital

HumanCapital


NaturalCapital

Sun SunSun

EOP

FinancialCapital

HumanCapital


NaturalCapital

Sun


MBSS

NaturalCapital

HumanCapital

PRODUCT … 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

ImpactStage 1

ImpactStage 1

ImpactStage 1

Cum Costs

Cum Profit

Price Stage 2

ImpactStage 2

ImpactStage 2

ImpactStage 2

Cum Impact

Cum Impact

Cum Impact

Cost = Price stage 2

Costs Stage 3

Profit Stage 3

Cum Costs

Cum Profit

Price Stage 3

ImpactStage 3

ImpactStage 3

ImpactStage 3

Cum Impact

Cum Impact

Cum Impact

FinancialDimension


Sun

BOP EOP


Sun

FinancialCapital

HumanCapital


NaturalCapital

Sun SunSun

FinancialCapital

HumanCapital


NaturalCapital

Sun


Sun

Small decisions by people make all the differenceBOP EOP

Sun

FinancialCapital

HumanCapital

Man BuiltCapital

NaturalCapital

Sun SunSun

FinancialCapital

HumanCapital

Man BuiltCapital

NaturalCapital

Sun


Sun


Sun

FinancialCapital

HumanCapital

Man BuiltCapital

NaturalCapital

Sun SunSun

FinancialCapital

HumanCapital

Man BuiltCapital

NaturalCapital

Sun

Product

Place

Supply Chain

Process

Organization

Enablingenvironment

Society


Sun


Sun

FinancialCapital

HumanCapital

Man BuiltCapital

NaturalCapital

Sun SunSun

FinancialCapital

HumanCapital

Man BuiltCapital

NaturalCapital

Sun


Sun

ACCOUNTING FOR EVERYTHINGBOP EOP



HUMAN CAPITAL ADD


employee?


TaxationFunds government.

Good value to society.


and this process


Degradationof land



Impact on climate


Solid waste

Resourcedepletion



FOR

Negativeimpact

FinancialCapital

HumanCapital


NaturalCapital

Sun Sun

FinancialCapital

HumanCapital


NaturalCapital

Sun





Employee Benefits

Employee Payroll

Other expenditures

Asset use costs

Depreciation

Financial expenses


Taxation

PROFIT

COSTS


Sun

From Financial Accounts to Impact on everythingBOP EOP

PRODUCT VALUE to buyer

Wages and benefitsValue to employee.

Pro-good expenditureValue to society.

Taxation funds government.

Good value to society.

Product use

Use of MBCFree use of thecommons andpublic services& infrastructure

Land use

Water use

Emissions

Waste water

Solid waste

Resource use

REVENUES/PROFITGood for Organization

Good for Owners

FinancialCapital

HumanCapital

Man BuiltCapital

NaturalCapital

Sun Sun

FinancialCapital

HumanCapital

Man BuiltCapital

NaturalCapital

Sun


Land - Habitat destructionEcoservice degradation

Resource depletion

Infrastructure use

Labor use

SC

IC

+HC

+HCEnergy use


Sun





BOP EOP


Employee Benefits

Employee Payroll

Other expenditures

Asset use costs

Depreciation

Financial expenses


Taxation

PROFITSun

FinancialCapital

HumanCapital


NaturalCapital

Sun SunSun

FinancialCapital

HumanCapital


NaturalCapital

Sun

COSTS

Mdia p3-03-characteristics-of-an-economic-activity-150420

Data & Analytics

Transcript of Mdia p3-03-characteristics-of-an-economic-activity-150420