TrueValueMetrics ... Impact Accounting for the 21st Century

Date: 2024-11-21 Page is: DBtxt003.php L07-11-SEES-OVERVIEW-190824

OVERVIEW #1 SOCIO-ENVIRO-ECONOMIC SYSTEM HOW IT WORKS
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IT'S A COMPLEX WORLD!

Managing complexity is difficult. In modern times, the system has been managed for the benefit of those who own financial capital. The dominant economic metrics have been GDP growth, corporate profit growth and stock market wealth. Management metrics have been aligned to these same goals, and have been very effective.
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THESE METRICS ARE USED FOR DECISION MAKING
GDP GROWTH	CORPORATE PROFITS	CAPITAL MARKETS

AND THE RESULTS ARE FAR FROM SATISFACTORY IN FACT, THE RESULTS ARE CATASTROPHIC
ECONOMIC INEQUALITY		ENVIRONMENTAL DEGRADATION		EXTREME WEATHER
Luxury Yachts	Homeless camp	Deforestation	Ocean plastic	Eye of storm	Hurricane
While there has been impressive financial performance, it has come at the expense of catastrophic inequality with far too many left behind, degradation of the environment and climate instability with extreme weather events.
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TAKE INTO ACCOUNT ALL THE CAPITALS
GOING BEYOND FINANCIAL CAPITAL AND MONEY WEALTH
SOCIAL CAPITAL SOCIO	NATURAL CAPITAL ENVIRO	ECONOMIC CAPITAL ECONOMIC
Social and economic progress has been achieved over the past 200+ years by expoiting natural capital. All value originates with nature and everything depends on nature. This is unsustainable, but technological innovation can (must) be used to change things for the better.
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ACTIVITIES have IMPACT on ALL the CAPITALS

SOCIAL IMPACT	ENVIRONMENTAL IMPACT	ECONOMIC IMPACT
There is a cost of living to support quality of life There are contributions that people make There is net benefit AND change to capitals (hopefully positive)	There are storms, earthquakes and natural disasters Ecosystem services are a source of all value There is net benefit AND change to capitals (mostly negative)	There are operating costs for all oconomic activities There are benefits from economic activity There is net benefit AND change to capitals (hopefully positive)
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MANAGE ALL THE ACTIVITIES AND ACTORS
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CONSUMPTION DRIVING THE MODERN ECONOMY
CONSUMPTION	IMPACTS OF PRODUCTION
Quality of Life SOCIO	Pollution ENVIRO	Profit ECONOMIC
Consumption is driving the modern economy. It looks like success as long as the depletion of natural resourcs and the degradation of the environment is ignored.There is strong correlation between better quality of life and more consumption in poor economies, but less so in mature rich economies. Rich economies are increasingly associated with catastrophic pollution, waste, inequality and inefficiency.
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MOST ACTORS ARE PEOPLE ... WHO SHOULD BE HELD ACCOUNTABLE
PEOPLE HAVE A VARIETY OF DIFFERENT ROLES MANAGE SO THAT EVERYONE IS ACCOUNTABLE
AS INDIVIDUALS Live life ... work & family	IN ORGANIZATIONS Do the work ... make the decisions	AS INVESTORS Allocate financial resources
Prevailing metrics and financialization have had mixed results ... very good economic ouitcomes for an elite few, but extremely disappointing for everyone else. The concentration of wealth and power is fueling global discontent in very destabilizing ways, including social discontent and anger at the establishment elites and increasingly out-of-control climate instability.
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NATURE IS ALSO AN ACTOR ... AND SHOULD BE RESPECTED
NATURE PREDATES PEOPLE BY BILLIONS OF YEARS AND IS THE SOURCE OF ALL VALUE
FOR EXAMPLE NATURE MAKES A FISHERY SUSTAINABLE
JUVENILE NURSERY	INDUSTRIAL FISHERY	SEAFOOD MARKET

Natural Capital is foundation for this fish and food flow Economic Activity captures fish, employs fisherfolk and earns profit. Social Capital benefits from employment and food
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CONSIDER ALL THE PERSPECTIVES
NOT ONLY PROFIT, BUT ALSO PEOPLE, PLACE & PRODUCT
PROFIT Economic goal	PEOPLE Men, women & children	PLACE Where people live	PRODUCTS Quality of Life
There is valueadd when there is a positive balance from every perspective. Profit alone is not enough, people should also progress. And the progress of people is enhanced by the characteristics of the place. Products impact everything. The production of products is a factor in the generation of profits. The consumption of products is a factor in the quality of life of people. Not least, the place influences where products may be and are produced.

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CONSIDER THE RESULTS
GREAT FINANCIAL PERFORMANCE SINCE WWII
PRODUCTIVITY UP WAGES UP From end WWII to around 1980	STRONG GDP GROWTH GDP growth has been very strong	CAPITAL MARKETS STOCK VALUES UP Stock market has been spectacular	ESSENTIAL HOUSING More decent housing to around 1980
BUT SOCIAL PROGRESS WEAK SINCE THE 1980s
PRODUCTIVITY UP WAGES FLAT From around 1980 to present time	GDP GROWING GPI FLAT While GDP is up, progress (GPI) is flat	GROWING INEQUALITY More obscene luxury	ESSENTIAL HOUSING Slums proliferating since 1980
AND NATURAL CAPITAL BEING DANGEROUSLY DEGRADED
RESOURCE DEPLETION Mining for natural resources	ENVIRONMENTAL DEGRADATION Deforestation for palm-oil plantations	INDUSTRIAL POLLUTION GHGs, liquids and solids	CLIMATE CHANGE EXTREME WEATHER Extreme weather
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IMPERATIVE FOR RADICAL ACCOUNTABILITY
EVERYTHING FOCUSED ON PROFIT PERFORMANCE MAKES NO SENSE
We talk about profit and money and wealth	But not about low wages, poverty and deprivation	And how the system is rigged in favor of the wealthy	And all sorts of abysmal hidden corporate behavior

The only group that are protected systemically are investors ... everyone else may be lied to with impunity. In the USA it is called the First Amendment. But there is nothing to stop society from doing RADICAL ACCOUNTABILITY so that misfeasance in every aspect of society is exposed.

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