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Figure 9: the ‚web of principles’ supporting the design of a green, inclusive and open economy
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Data integration, contextualization & activation for multicapital accounting
The Data Blueprint proposes a general specification for data architecture and information systems to accurately measure progress toward financial, economic, social and environmental sustainability via dynamic interlinkages between the individual company (micro), industry (meso), and environmental, social, and economic systems (macro) levels in order to spur the emergence of a truly green, regenerative, inclusive, and open global economy. Taking a “Positive Maverick” approach, it transcends the incrementalist approaches to data of ESG to focus on transforming raw data into insightful information, decision-useful intelligence, and actionable knowledge. The general specification is based on three primary dimensions necessary for building out a data infrastructure that fulfills the potential of triggering transformative systems change:
Integration of the multiple capitals (natural, human, social, built, and financial) to optimize positive synergies between and amongst them, to better support the creation of financial, societal (shared), and system value (to employ a recently coined term.)
Contextualization of organization-level impacts on the multiple capitals within the carrying capacities of those capitals at the systems level, either a virtuous (regenerative) or vicious (degenerative) cycle.
Activation of responses when the sustainability of any capitals – and hence the potential for biota well-being and human fulfillment – is placed at significant risk. Data without engagement falls short of its potential; “activated” data fulfills its potential of driving the change signaled by integrated, contextualized data.
Throughout this report, the Data Blueprint cites examples of shortcomings and gaps in need of filling, as well as emerging best practices that exemplify approaches to data integration and contextualization that serve multicapital accounting. And each of the 3 primary chapters (on Integration, Contextualization, and Activation) ends with a series of Recommendations for relevant constituencies such as reporters, standard-setters, governments and intermediaries, and investors and other stakeholders, framed at 3 maturity levels from educate to advocate to accelerate. Following the release and publication of this Data Blueprint report, Reporting 3.0 is launching its Beta Testing Program to pilot Recommendations from the Blueprint. This report profiles a few of these pilot projects.
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Blueprint 1: Reporting
A principles-based approach to reporting serving a green, inclusive & open economy
The Reporting Blueprint is the first pillar of the Reporting 3.0 work ecosystem and sets the scene for the other Blueprints to follow. It analyses disclosure needs from the perspective of a green, inclusive & open economy. Assessing the needs to connect the micro (organisational) performance with the meso (industry and habitat) level up the the macro (thriving economic system design and regenerative capitalism) level the Blueprint defines 6 desiderata and 9 principles and embeds the idea of ‘integral thinking’ and ‘integral materiality’. These form the basis to assess company strategies, offered through a continuum from denial to thriving, and defines three main areas for disclosure, currently underdeveloped, to really build trust, resilience and innovation potential: purpose and connectedness, measuring success based on context and multi-capitalism, and reaching scalability towards economic system design change. Each of these areas is described by actionable progress and makes recommendations to reporting standard setters, governments and multilaterals, corporations, and investors. Through the Reporting Blueprint a change trajectory is described in which the Accounting Blueprint, the Data Blueprint and the New Business Model Blueprint will find guidance regarding their specific contributions that are necessary to succeed in delivering the full potential of the Reporting 3.0 Work Ecosystem.
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Blueprint 2: Accounting
Laying the foundations for future-fit reporting
How can accounting and corporate finance be transformed to serve a new purpose? How can it serve a multi-capital green & inclusive economy definition of success and value-creation in a circular economic setting? How can accounting be redefined as being not only about recording financial transactions, but about tracking of both financial and extra-financial data and their forward-looking interpretation in an appropriate context? This includes a context of addressing risks and opportunities associated with diverse (e.g. social, natural) capitals. Answering these questions include consideration of new innovations such as the development of integrated reporting, contextualization, monetisation and internalisation, as well as new integrated statements such as alternative P&L accounts and balance sheets. It also includes working with new interpretations of materiality, related thresholds and appropriate timeframes in decision-making. Evidently mainstream financial managers, accountants, and assurance providers vary considerably in their preparedness for these transformative changes.
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