MultiCapital Scorecard

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= concept and book


The Concept

= "The MCS is the world’s first and only context-based triple bottom line accounting system and is specifically adaptable to the reporting requirements of Benefit Corporation Statutes in the U.S. and elsewhere". [1]

Description

Mark W. McElroy:

• A context-based approach to TBL measurement and reporting (defines company-specific standards of performance on a bottom-up basis)


• A three-step process:

1. Scoping and Materiality – Identify duties and obligations for what an organization’s impacts on vital capitals must be in order to be sustainable; results in identification of related Areas of Impact (AOIs)

2. AOI Development – Define company-specific goals and standards of performance for each AOI, context-based metrics and associated data collection protocols

3. Scorecard Implementation – Operationalize Scorecard in order to measure, manage and report performance "

Discussion

"Ever since the term Triple Bottom Line (TBL) was first introduced by John Elkington in 1997, managers in organizations have been looking for ways to do it – that is, to operationalize the measurement and reporting of organizational performance in all of its dimensions: social, economic and environmental.

Many attempts have been made to implement the TBL, including the Global Reporting Initiative (GRI), the world’s leading sustainability reporting standard. Most such efforts have fallen short, however, largely because of their failure to adequately address Sustainability Context. GRI itself suffers from this shortcoming. Indeed, Sustainability Context is indispensable for measurement and management, too, not just reporting. It requires that social, economic and ecological thresholds in the world be taken explicitly into account when attempting to assess the performance of organizations. Integrated reporting, that is, must be context- and thresholds-based.

The sustainability of water use, for example, cannot be ascertained without first determining how much water is available in a particular place and how much of it should be assigned to a specific user. A rate of use can then be compared to a sustainable rate of supply. Sustainability thresholds can similarly be defined for other areas of impact, including social and economic ones. Performance, in turn, can then be assessed in consistent integrated terms. The MCS makes this possible." (http://www.multicapitalscorecard.com/MultiCapital_Scorecard_Intro.pdf)


The book

  • Book: The MultiCapital Scorecard.By Martin Thomas and Mark McElroy. Chelsea Green Publishing, 2017.

"The Consultants Martin Thomas and Mark McElroy have developed a format that provides a practical way to oversee such expansive sustainability. You choose what you wish to measure – what you feel is important – and even the weights you want to give to the various items. But they provide, thorough their MultiCapital Scorecard, a means for managing and evaluating that broader view of the organization.

It’s an important book because when you fall short of sustainability – an unpalatable workplace, polluting the environment, or being unproductive and winding up in the financial red – you are eroding capital, be it societal or corporate, and that’s destructive. And even if you find a multicapital approach wrongheaded or the authors’ system too elaborate, the method may include useful ideas you can borrow for your own situation." (https://www.theglobeandmail.com/report-on-business/careers/management/the-multicapital-scorecard-a-practical-guide-to-sustainability/article33849941/)

More information

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