Comment by:
Peter Burgess Founder/CEO at TrueValueMetrics

Hans, Norma ... The reporting by organizations is a measurement of an organization's performance, which in turn is a result of decisions made inside the organization and by investors (whether or not they want to invest) and customers (whether or not they want to buy the products) outside the organization.

In my view it is not enough to judge impact on people and planet by how much doing something has cost the organization. The question is not how much an activity has cost, but how much has the organization accomplished, which may have little relationship to the money disbursed!

As you may have noticed, I am arguing that there is need not only for better metrics inside the organization and about the organization, but metrics that show progress and performance for a place, and how a product fits into the picture throughout the life cycle of the product from the beginning of the supply chain, through final production, purchase and use and into the post use waste chain.

We need not only metrics that take into consideration the money flows that produce revenues, costs and profit, but the value flows that impact people and planet. These come together at an economic activity that get implemented in a place by an organization and is associated with products.

For people, impact is change in quality of life. There are many complex interactions, but one of the most important is the wage earned from a job which in turn enables products which satisfy needs to be purchased. The money of wages subsequently feed into the place because of the local multiplier. The local multiplier is an important variable that can be changed as a result of people's buying behavior.

For planet, one impact is the depletion of resources. Money profit accounting ignores the depletion of resources (except for the money cost of buying access to resources, which is different from the issue of depleting the actual stock of resources on the planet). Some resources are finite and will run out. Some may be renewed, but the time and cost to do this must be accounted for.

For planet a second impact is the strain caused by waste whether it is solid waste, liquid waste or gaseous waste. The corporate world has a history of dumping all of these wastes outside the accountability boundary of the organization, and then ignoring the impact. The impact must be quantified and taken into account.

So ... while it is good to see various parts of the organization centric community working on metrics for themselves, I really do think there has to be as much effort on getting to grips with these impacts from a place perspective and a product perspective as well.

Peter Burgess TrueValueMetrics Delete Edit Comment You have 14 minutes