TrueValueMetrics ... Impact Accounting for the 21st Century

Date: 2024-08-16 Page is: DBtxt003.php txt00026221

TVM WEBSITE MAINTENANCE
SOME CODE ... TVA ACCOUNTING FRAME
Some code re: TVA ACCOUNTING FRAME extracted early February 2024

HOME

SiteNav

Alpha

SEES

actors

place

products

metrics

TPB

In the past, natural capital was strong and economic capital (including financial capital) was relatively weak (The Beginning of Period BOP column).

Since the beginning of the industrial revolution technology has enabled business to expand economic capital, and especially the financial capital component, very significantly while depleting and degrading natural capital in a dangerously unsustainable way. (The End of Period EOP column).

Corporate financial accounting and reporting enables management to optimize for profit performance (the grey section)

Including the external impacts on social and natural capital enables an accounting and accountability for the impact on All THE CAPITALS and the total performance of all the actors in the socio-enviro-economic system (SEES).

Peter Burgess COMMENTARY ... added February 2024

The above graphic was created in the 1990s around the time John Elkington promulgated the idea of a Triple Bottom Line (TBL) comprising People, Profit and Planet (3P).

I started using a framework somewhat similar to this when I first started doing consultancy work for the World Bank, the UN and others in connection with national level economic development and people level humanitarian assistance.

During the 1980s and 1990s I embraced the use of PC scale database systems as they emerged and became quite powerful tools for managing fairly large amounts of data. DBII was an early PC scale database system. With the launch of DBIII I migrated to FoxPro which seemed to be more powerful and easier to use, and using FoxPro I created an economic development analysis tool I called BDSDA ... standing for the Burgess Database System for Development Analysis (or DBSDA ... DataBase System for Development Analysis).

Unfortunately Microsoft acquired FoxPro in the late 1990s and within a few months merged the technological core of FoxPro into its previously rather weak Access database offering and in the process eliminated the FoxPro user interface replacing it with the Microsoft Access interface.

Ouch!!!!!!!! That meant that about 20 years of my database experience become valueless. At that point I was approaching 60 years old and not enthusiastic about (or even capable of) starting over even if I had the intellectual energy or capacity to do so!

I was encouraged by the emergence of John Elkington's TBL framework in the 1990s and anticipated that it would become the norm for business and economic analysis.

Mistake! It did not. Rather the era of 'financialization' became even more dominant with a large part of the productivity enabled by technology getting diverted into incremental wealth for owners and everything else degraded in support of this goal ... specifically everything to do with society and quality of life and everything to do with sustainability and the degradation of the environment.

Over the past 40+ years the distribution of wealth and the distribution of earnings in developed countries around the world has gone from a 'normal' distribution around 1980 to a very skewed distribution by 2020. In 1980 there were relatively few very very rich and relatively few very very poor with the middle most everyone. By 2020, just 40 years later, the top 1% owned an enormous amount of the wealth, the top 20% essentially all of it ... and the bottom 80% way less of the wealth than they had 40 years before.

This has been possible because the system of 'accounting' is no longer fit for purpose. Amazing systems technology has been deployed to account for money and profit and the wealth of the powerful, while rather little has been done to enable on accounting for quality of life in society and the ennvironmental damage associated with economic activity.

Even though accounting and accountability are no longer 'fit for purpose', this has not come about simply by 'happen-chance'. It has happened because there is a powerful lobby against the sort of accounting and accountability that would change the balance of power away from a relatively few wealthy owners to the masses.

If happiness was the global goal rather than more and more wealth in the hands of the rich and powwerful, there could be a sea-change in way the world works ... and while this sounds utopian, it is essential because the scale of damage to society and the environment caused by abusiv economic practices is simply not sustainable.

But it is not only that ... more of the same old same old will almost certainly result in rapidly degrading world that quite quickly will become bad for everyone!

Peter Burgess