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Numbering the Triple Bottom Line
Accounting for ALL the Capitals
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MANY MASSIVE PROBLEMS
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ALL SORTS OF SOCIAL DISASTERS
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Terrible Poverty
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Malnutrition
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Terrorism
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Genocide
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EXTREME WEATHER
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Somalia Drought
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Mozambique Flood
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Eye of storm
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USA Hurricane
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ENVIRONMENTAL DEGRADATION
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Deforestation
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Strip Mining
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Power Emission
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Traffic Pollution
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Bottom line ... my generation of leaders has made it possible for a lot of very bad things to happen, and very little action to address these issues and hold the key actors responsible.
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MANY AMAZING POSSIBILITIES USING TECHNOLOGY
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MEDICAL SCIENCE
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MATERIALS
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ELECTRONICS
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Genetic code / DNA
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Antibiotics
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Composites
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Specialized steel
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IBM
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Microsoft
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COMMUNICATIONS
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SOCIAL MEDIA
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PASSENGER TRANSPORT
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Apple
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Print Media
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Facebook
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Twitter
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Passenger Rail
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Passenger Car
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LOGISTICS
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AEROSPACE
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DIGITAL TECHNOLOGY
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Container Ships
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Freight rail
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Jet engines
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Passenger Aircraft
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AI
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IoT
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SOCIAL CAPITAL
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GDP UP ... GPI FLATLINE
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PRODUCTIVITY UP, NOT WAGES
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TOP 1% ... HAS IT ALL
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- DESTABILIZING INEQUALITY
- INADEQUATE WAGE RATES
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- OUTSOURCED LABOR
- WEAK SOCIAL SAFETY NET
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NATURAL CAPITAL
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CATASTROPHIC DEPLETION AND DEGRADATION
- EXPLOITED LAND
- DEGRADED WATER
- POLLUTED AIR
- DEPLETED RESOURCES
- LOSS OF BIODIVERSITY
- UNSTABLE ECOSYSTEMS
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ECONOMIC CAPITAL:
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FINANCIAL CAPITAL
EXCESSIVE CONCENTRATION OF WEALTH
PHYSICAL CAPITAL
OBSOLETE AND DEGRADED INFRASTRUCTURE
INTANGIBLE CAPITAL
STRONG KNOWLEDGE / WEAK EDUCATION
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IT'S A COMPLEX WORLD!
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Managing complexity is difficult. In modern times, the system has been managed by and for the benefit of those who own financial capital, now referred to as financialization. Nothing else has been seriously managed.
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TRIPLE BOTTOM LINE ... ALL THE CAPITALS
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PEOPLE
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PLANET
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PROFIT
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SOCIAL CAPITAL
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NATURAL CAPITAL
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ECONOMIC CAPITAL
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SOCIO
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ENVIRO
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ECONOMIC
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CONSIDER ALL THE PERSPECTIVES ... EMPOWER ALL THE ACTORS
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TECHNOLOGY
Enabler of progress
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ORGANIZATIONS
More than profit
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PEOPLE
Men, women & children
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PLACE
Where people live
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PRODUCTS
Quality of Life
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One of the biggest priorities should be to change the metrics of progress and performance so that they are no longer dominated by corporate profit growth, national GDP growth and the growth of stock market valuations. If you change the way you score the game, you will change the way the game is played!
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SOCIAL, NATURAL & ECONOMIC CAPITAL ... NOT JUST FINANCIAL CAPITAL
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SOCIAL CAPITAL
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NATURAL CAPITAL
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ECONOMIC CAPITAL
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SOCIO
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ENVIRO
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ECONOMIC
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HUMAN CAPITAL
RELATIONAL
LOCATIONAL
CULTURAL
SPIRITUAL
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LAND
WATER
AIR
RESOURCES
BIODIVERSITY
ECOSYSTEMS
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PHYSICAL
LAND & BUILDINGS
INFRASTRUCTURE
PROCESSES
EQUIPMENT
WORKING CAPITAL
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FINANCIAL
MONEY
GDP GROWTH
CORPORATE PROFITS
CAPITAL MARKETS
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INTANGIBLE
KNOWLEDGE
EDUCATION
GOVERNMENT
SECURITY
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Top line performance reporting must address three components
(1) impact of activities on social capital;
(2) impact of activities on natural capital; and,
(3) impact of activities on economic capital.
Top line progress reporting must include changes for all capital components:
(1) all of social capital;
(2) all of natural capital; and,
(3) all of economic capital.
Note that this is exactly what conventional double entry financial accounting does for the money transactions related to a 'reporting entity' while ignoring all the impacts that are outside this very lmited reporting envelope. This was an understandable simplification in the early days of the industrial revolution during the reign of Queen Victoria, but is completely inapprorpriate well into the 21st century.
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SECTOR / INDUSTRY / PROCESSES
SPECIALIZATION IS VITAL FOR EFFICIENCY AND ECONOMIC PRODUCTIVITY
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MINING
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LOGGING
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ENERGY
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STEEL
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REFINERIES
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PULP & PAPER
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SHIPPING
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RAIL
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PIPELINES
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TRUCKING
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ROADS
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RAIL
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MANGROVE
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FISHERIES
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AGRICULTURE
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RETAIL
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FUEL
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WASTE
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Sector specialization most always improves corporate profit performance, but over the years, impact throughout the product life cycle has not been accounted for. This has to change.
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STREAMS / STRANDS / STRINGS
ACCUMULATED IMPACT IS EMBEDDED IN EVERY PRODUCT
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NATURE
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EXTRACTION
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SUPPLY CHAIN
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PRODUCTION
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USE
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POST USE
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Everything that is used to support a high standard of living and quality of life has a long supply chain, then production and distribution, then use, and then a post use waste chain. For metrics to be meaningful, all of these stages must be brought into account.
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CONSIDER ALL THE PERSPECTIVES
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TECHNOLOGY
Enabler of progress
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ORGANIZATIONS
More than profit
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PEOPLE
Men, women & children
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PLACE
Where people live
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PRODUCTS
Quality of Life
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Better results will be achieved when decisions are based on impact not only for corporate financial profit, but for all the dimensions of the socio-enviro-economic system.
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THE ESSENTIAL CONTRIBUTION OF NATURE
THE ENABLING FOUNDATION FOR EVERYTHING
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MANGROVE
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EXTRACTION
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BIODIVERSITY
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ATMOSPHERE
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WATER
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RAIN-FOREST
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Left to itself ... nature adjusts and is sustainable ... but it takes time. Humankind is in a hurry, and this process is being disrupted. It will not end well! People need to make better decisions.
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PEOPLE HAVE MULTIPLE ROLES!
PEOPLE ARE BENEFICIARIES, CONTRIBUTORS AND DECISION MAKERS
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PEOPLE ARE AT THE CENTER OF EVERYTHING
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AS INDIVIDUALS
Doing the work
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AS MANAGERS
In organizations
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AS INVESTORS
In finance
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AS CUSTOMERS
buying stuff
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AS LEGISLATORS
In government
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AS PARENTS
Parenting
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IN COMMUNITY
Friends / Society
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HELPING OTHERS
Volunteering time
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HELPING OTHERS
Donating money
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SPEAKING OUT
on Social Issues
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Everything should be about people. Unfortunately the focus of decision making for many decades has been more on profit than on people, and the environment has been ignored. This has been good for a few, but too many have not seen any benefits.
In poor economies there is a correlation between quality of life and consumption, but as the population gets a better quality of life, this correlation weakens, Neverthless, if there is going to be more consumption, there is also going to be more production, and with this more environmental degradation, unless production processes are improved.
People have made enormous technological progress but very little of this has been applied to improving the social and environmental performance. Almost all of the effort has gone into applying technology to improve profit performance.
This can be changed. This must be changed.
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PEOPLE MAKE DECISIONS ABOUT CONSUMPTION
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People make decisions that optimize quality of life for themselves and their families. For most people, consumption is a big part of quality of life.
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Food - Vegetables
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Food - Meat
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Housing
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Clothes
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Mobility
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Recreation
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CONSUMPTION DRIVES ECONOMIC ACTIVITY
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Livestock
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Crop agriculture
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Petrochemicals
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Steel
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Auto Production
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Logistics
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CONSUMPTION ALSO DRIVES ENVIRONMENTAL STRESS
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GHGs
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Use of energy
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Extreme weather
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Deforestation
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Water shortage
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Plastic pollution
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More consumption correlates to a better quality of life up to a certain level. Beyond that level more consumption may well have negative consequences, as for example too much food may result in obesity and diabetes or worse.
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