MultiCapital Accounting

From P2P Foundation
Revision as of 18:39, 2 March 2021 by Asimong (talk | contribs)
(diff) ← Older revision | Latest revision (diff) | Newer revision → (diff)
Jump to navigation Jump to search

= "the performance of a society or organization is best understood in terms of what its impacts on vital capitals are, and with specific reference to their limits". [1]

URL = http://www.multicapitalscorecard.com

Contextual Citation

"Performance instead is assessed relative to what an organization’s impacts on Vital Capitals must be in order to be sustainable – socially, economically environmentally – with the units of measurement being determined by each capital." (http://www.multicapitalscorecard.com/MultiCapital_Scorecard_Intro.pdf)

Description

Mark W. McElroy:

"Arguably the most pervasive principle found in the 100+ year old literature on sustainability

  • That the performance of a society or organization is best understood in terms of what its impacts on vital capitals are, and with specific reference to their limits
  • Vital capitals: natural, human, social, constructed, intellectual and economic "

(http://www.sustainableorganizations.org/Multiple_Capital_Accounting.pdf)

Characteristics

MCA now also standards-based

“Integrated thinking is the active consideration by an organization of the relationships between its various operating and functional units and the capitals that the organization uses or affects.” (http://www.sustainableorganizations.org/Multiple_Capital_Accounting.pdf)
“Material sustainability issues arise in industries that rely on common capitals as a source of value creation, beyond financial or manufactured capital … Common capitals, as used in this Framework, include natural capital … and human capital.” (http://www.sustainableorganizations.org/Multiple_Capital_Accounting.pdf)
“Leading reporting initiatives such as IIRC and SASB include references to multiple, or ‘vital,’ capitals. GISR embraces the multiple capitals framework as well.” (http://www.sustainableorganizations.org/Multiple_Capital_Accounting.pdf)

Typology

"There are arguably two schools of thought or broad approaches as to how MCA should be done:

1. Market Value (MV)

  • MV school is about measuring and monetizing intangibles and externalities as a basis for explaining market caps and the ability to create $ value
  • Market Value School
    • First, this is arguably the IIRC’s school of thought because it stresses measurement, management and reporting of capital impacts primarily for the benefit of shareholders
    • Prominent illustrations of this approach include the EP&L method (pioneered at Puma); the TIMM method (proprietary PwC tool); and Ernst & Young’s approach to Integrated Reporting
    • Forthcoming Natural Capital Protocol may also fit in here

2. Triple Bottom Line (TBL)

  • TBL school, by contrast, is about assessing impacts on vital capitals as a basis for determining the overall performance of organizations
  • Triple Bottom Line School
    • So far only one method extant: the MultiCapital Scorecard
  • A capital-, context-based and open-source TBL system
  • Early users include Ben & Jerry’s, New Chapter and Cabot "

(http://www.sustainableorganizations.org/Multiple_Capital_Accounting.pdf)

More information