Dialog
This is aimed at the World Bank Group

A communication associated with knowledge and learning at the World Bank ... and the need for a TVM like understanding of accountancy

I have sent this message to a person I know at the World Bank ... it will be interesting to see what response I get.

Congratulations ... knowledge and learning is, in my view, at the core of a successful future, and I am pretty sure you would agree.

The question then becomes what sort of learning is going to be the best for people, place, planet and profit ... and I am not sure that there is an easy consensus on that.

I did my first assignments for the World Bank in 1978 ... and over a period of several decades I never came across anyone in the World Bank who was really world class in the field of accountancy, though there were high profile people responsible for accounting issues. During this same period issues of corruption and all sorts of money control issues kept cropping up, yet the lack of basic accounting was never brought up (within my earshot, anyway) even though this should have been the first thing that got addressed.

Fast forward to now. Double entry accountancy is more than 400 years young, and I argue it is time it was reformed so that it is more relevant to the 21st century. I want to see accounting that address not only the money profit for organizations, but also impact on people and planet. This needs a different perspective than the one that is the present norm. We need metrics around each and every economic activity in a place, so that these data may be aggregated (consolidated) into the implementing and financing organizations, into the place and also into product.

Place is important because it is in a place where there can be accountability, and it is where profit, people and planet come together. Profit is what we already understand ... revenues minus costs equals profit. Impact on people is more complicated because people have multiple roles in society: as investors; as executives; as workers; as family members; as community residents; as customers; as people in the supply chain; as people in the waste chain. Impact on planet also has many elements: depletion of resources; degradation of the land, consumption of water, pollution of air, water and land, and so on.

All of this is best understood in an economic activity in a place ... and even then it is fairly complex.

There also has to be rigor around the understanding of product. Economic activity is associated with the consumption and the creation of goods and services ... product. Product has a life cycle starting with the supply chain, through the use cycle and eventually into the waste chain. A product will usually pass through many economic activities during this life cycle.

Product is important because product is directly affected by buy / not to buy decisions. The dominant information at the present time at this decision point is that associated with corporate advertising and brand PR, but in a smart society the buyer should also be able to see the whole life cycle impact associated with the product as well as its price.

None of this is particularly revolutionary ... but getting economic decision making to be based on data flowing through a framework like this would change a lot of things. I have been bothered for a long time that if profit is the dominant metric, then there will never be much capital flowing into the things that really matter ... getting 2 billion people into a better economic environment with potential, for example. There is not much money profit to be made doing this, but a huge amount of impact valuadd. There are thousands of issues that could be addressed if impact valuadd could be the goal as powerful as money profit.

So my big question! Where is discussion of this sort going on in the World Bank and in the society served by the World Bank?

With best regards

Peter Burgess TrueValueMetrics