Measuring the resource use and environmental impact of economies (Resource Accounting -RA ) is growing, particularly for water and carbon. But it goes far deeper than this. If data is available, resource accounting can produce as many lines of valuation for as many environmental, social and governance (ESG) aspects as required. Essentially RA provides the tools to measure sustainable development.
The big data revolution enables the processing of this huge data. Databases and input-output modelling have evolved to extend from individual companies and countries to connect economic and ESG information through supply chains world-wide. In theory, every invoice for every product and service could show ESG values per unit $ ouput at every step in a supply chain.
Such resource accounting is already in prototype use for assessing the ‘footprint’ of individual companies and other organisations. At a national level, an example is Balancing Act which covers 135 sectors of the Australian economy.
Above: Three illustrative examples from the 135 sectors of the Australian economy in Balancing Act. Adverse financial, social and environmental outcomes produce longer ‘legs’ on the sustainability map (also called an amoeba diagram or spider chart). The average for the Australian economy scores one. This means, for example, that more imports (considered bad) creates a longer leg, more exports or more jobs results in a shorter leg. Note also the log scale which means that small differences away from the centre actually reflect large arithmetic differences. Source: Balancing Act, 2005.
By providing information per unit $ output, resource information is related directly to the financial accounts of businesses and other organisations and to traditional indicators of economic activity such as Gross Domestic Product (GDP).
September 2014 MMG/SNJ