The Value Revolution in Economics Wealth, Indicators & Accounting

Redefining Wealth Quantitative: Money & Material Accumulation Qualitative: Well-being Regeneration

Quantification & Value What is measured gets done What gets counted is valued; What is valued gets counted

Indicators [If it is to be achieved, the new economic system] will result from our becoming better ecological accountants at the community level. If we must as a future necessity recycle essentially all materials and run on sunlight, then our future will depend on accounting as the most important and interesting discipline. Wes Jackson, Becoming Native to This Place

Indicators & Value Expression of potential for a knowledge-based economy Centrality of end-use: requires more sophisticated monitoring of human need. –also required by the centrality of creativity to qualitative economic development. Radical potential of eco-literacy: –Murray: Fordist Waste Economy depended as much on deskilling of the consumer as deskilling of the worker. Deflating Financialization: potential to replace money as key determinant of value –decommodifying money: money as pure information

Indicators & real wealth Qualitative Wealth is far more complex: requires more quantification Qualitative Wealth is place-based or specific to circumstances Qualitative Wealth is needs-based, requiring examination of consumption. Accounting takes place on many levels in terms appropriate to that level

A Dashboard for the Cockpit The Family of indicators: –Urban Metabolism or regional mass balance –Green GDP (e.g. Genuine Progress IndicatorGPI ) –Ecological Footprint –Carbon accounting / carbon footprint –Life-cycle Assessment (products, processes, landscapes) –Industry-based accounts: food, building, forestry, etc. –Local Development Standards –5 capitals: personal, professional, spiritual, environmental and financial –Firm sustainability accounting –Sustainable Community Indicators –Risk Assessment, EIA, etc.

Indicators & Trends in Regulation Raw material for certification systems Regulation as more civil society-based Markets as values-driven FSC wood / LEED building / etc. integrated evaluation / regulation / marketing systems

Entrepreneurial Value Creation Local Food Plus: valuation regulation marketing education

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The Evolution of Indicators Difficulties with many early indicator sets: –Wish-lists, divorced from solutions or relationships –Either too detailed or too aggregated /oversimplified Next Generation of Indicators: from librarians to plumbers

Indicator Design organized around a purpose highlight important trade-offs Varieties: those that… –cause an outcome (e.g. reduce air pollution) –document the outcome (e.g. amount of smog) –react to the outcome (air pollution legislation)

Genuine Wealth Assessment Life-cycle

Business-related Applications Internal accounts Natural Step, ISO 14000, Eco-footprint, Sustainability Reporting Government Regulation Alternative Industry Standards --LEED green bldg.; FSC wood ; B Corporation ; Innovative Business Models: -- B Corporation -- McDonough/Braungart Protocol --Local Food Plus

Business Applications-II Builds external costs into firm decisions Essential to Triple Bottom Line SBLS: can be translated into financial bottom line Crucial to Stakeholder relationships Made easier by network support: --market transformation

Business Applications-III Sustainability accounting : Global Reporting Initiative Triple Bottom Line accounting Social accountability reports Outcome-based reporting & mapping etc.

Genuine Wealth Applications All 5 capitals: financial, built, natural, social, human Balance sheet for each Full-cost sustainable income statement Progress indicators Genuine Progress Report

LCA and Product life-cycles: Environmental Lock-in over a Products Development Cycle