This week was all about measurement and tracking for me. I can be somewhat of a numbers nazi at times, so quantitative data is an important component for me to understand the full picture. In a recent report put out the PWC, they put the science of measurement into perspective:
“We know that today some 80% of the
market capitalisation of companies is
represented by so-called intangible assets
which would not, according to financial
reporting standards, be included as
additives in a balance sheet”
Its exciting for me to know that our accounting methods are advancing and becoming more holistic so as to reflect the true impact of every dollar. The accounting software and advanced management systems out there can be overwhelming to absorb. Between EP&L (Environmental Profit and Loss statements), TIMM (Total Impact Measurement Management) and other tracking systems like the GRI (Global Reporting Initiative) its hard to decide which is right for any given company.
My starting point is with the company or individual in question. What do they value? What is the priority for them to measure? Some companies want to measure it all, others prioritize indicators that will yield the most information. It seems to be the first step in committing to alternative reporting - decide what matters to you. Once this has been made clear - the company can start shopping for tracking software or implementing their own tracking system.
In parallel with the actual data tracking comes the method for tracking. How will you capture the information? Who will conduct such audits? Its important that the actual performance numbers be reported accurately in order to maintain integral tracking numbers. By this point in the process companies have already dedicated a lot of time and money to implementing this new system. It undoubtedly takes a dedicated group of personnel to organize and execute these transitions. Once the transition is complete there is generally a lot of vital data to consider when strategizing and moving forward but it also feels like business as usual. How can we get to this place with every company? How can we help companies make the transition to holistic accounting? Is it an important goal or should we focus on something else?
My opinion is that numbers are powerful and when we account for them more precisely we have a more detailed picture of our influence. This brings us deeper in understanding our impact on the world which in my opinion is the ultimate goal of society.