TrueValueMetrics ... Impact Accounting for the 21st Century

Date: 2024-06-30 Page is: DBtxt003.php L0900-IA-Albert-Einstein

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ALBERT EINSTEIN

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Albert Einstein

Peter Burgess COMMENTARY
The modern world circa 2023 has become a very dangerous place because there is so much knowledge and so little judgement and understanding.

I have known something about Albert Einstein since quite a young age. In my pursuit of technical knowledge I learned something of the scientific work that Einstein did which became foundational science for the development of nuclear bombs and nuclear power.

The very simple common sense in this image is worth remembering:

Not everything that counts can be counted.
and not everything that can be counted, counts!

I try to keep this in mind ... and indeed expand the idea somewhat.

One of my 'bête noire' is the idea that more and more data automatically means more and more and better understanding. Not true, because usually there are other factors that need to be taken into consideration.

In many cases when it comes to data, 'quick and dirty' may be a lot more valuable than 'perfect and too late'.

More and more precision in the data may not have much incremental value, while better understanding of the context would be very valuable.

In the modern world a good understanding of the strengths and weaknesses of data is essential ... yet modern education in a lot of countries (including the United States) has not embraced this important reality.

Even worse is the use and promotion of metrics that really have little integrity. In this regard GDP is the elephant in the room. GDP should have been retired as 'unfit for purpose' many decades ago ... like in the 1950s ... but it has endured because it serves the interests and behaviors of too many with wealth and power and influence ... but little integrity!

There was some movement towards better metrics for business and corporate performance reporting before the turn of the century in the 1980s and 1990s, but like GDP, the old way has remained the norm. The idea that the main role of corporate financial reporting is to do do with investors has its origin in the early days of the industrial revolution when companies seeking to raise funds simply lied about their financial condition and profit potential without any constraints. This was the origin of independent accountants certifying that companies' representations were 'true and fair'. My position is that it is high time for companies now to be accountable not only for their performance relative to investors, but also with respect to society writ large and their enironmental impact.
Peter Burgess