The MultiCapital Scorecard: Rethinking Organizational Performance - Hardcover

Martin Thomas came to sustainability thinking after completing his MSc in Consulting and Coaching for Change and chairing The Change Leaders (tCL). In his thirty-four years at Unilever, he headed Unilever’s global strategic planning activities and then had responsibility for several mergers, acquisitions, disposals and international ventures in various countries at different times. His work was international, mainly at subsidiary executive board level, conducted in four languages and living consecutively on four continents. Since 1999 he has been consulting as call4change and has taken on interim management assignments in various organizations.

Martin’s publications include chapters on “Scenarios in Venezuela,” in Business Planning for Turbulent Times (Earthscan, 2008), written by members of the Oxford Futures Forum, and on “Performance that Lasts” in New Eyes (The Change Leaders, 2013).

His focus on measuring organizational performance towards sustainable futures started in 2007 when he decided to complement the activities of tCL colleagues in New Angles by operationalizing triple-bottom-line concepts.

While presenting to The Centre for Social and Environmental Accounting Research at St. Andrews, Martin linked up with The MultiCapital Scorecard coauthor Mark McElroy. Since 2011, they have been extending context-based sustainability principles and practices to include financials and measure progression towards full sustainability.

Mark McElroy is an accomplished innovator, consultant, author and educator in the theory and practice of corporate sustainability management. He is the founder and executive director of the Center for Sustainable Organizations in Vermont and is particularly well known for his development of Context-Based Sustainability (CBS), an approach to sustainability measurement, management, and reporting in which performance is seen as a function of what an organization’s impacts are or ought to be on vital capitals.

McElroy is also a long-time veteran of management consulting, having spent much of his career at Price Waterhouse, KPMG Peat Marwick – where as a partner he led a national practice – and IBM Consulting. More recently, he created and led Deloitte Consulting’s Center for Sustainability Performance in Boston, MA, a think-tank dedicated to the study of sustainability measurement, management, and reporting that he founded.

McElroy earned his Ph.D. in Economics and Business from the University of Groningen in The Netherlands in 2008, and currently teaches sustainability theory and practice in the MBA in Managing for Sustainabilityprogram at Marlboro College in Vermont. He is Board Chair Emeritus at the Donella Meadows Institute, also in Vermont, where he continues to serve on the Advisory Board.

With Martin Thomas, he is co-creator of the MultiCapital Scorecard. Their joint articles have appeared in Sustainability Accounting, Management and Policy Journal, The World Financial Review, and the Harvard Business Review.

“The MultiCapital Scorecard provides a valuable aid to help companies get to grips with the complex set of resources and relationships upon which all organizations impact and depend. The context-based approach is a particularly important development, as social and environmental issues put ever greater constraints on business and the economy, and provide real opportunities for those providing solutions.”--Jessica Fries, executive chairman, the Prince’s Accounting for Sustainability Project (A4S)

“As a company with global distribution and deep roots in social purpose, Ben & Jerry’s has long been working on a meaningful set of sustainability performance metrics to assess social and environmental impacts. We consider the MultiCapital Scorecard one of the most promising performance measurement models for integrated reporting that we have yet encountered.”--Jostein Solheim, CEO, Ben & Jerry’s

“Most of us easily forget we live in an ecological world. For the past two hundred years, often unknowingly, we have been busily sawing off the branch from the tree of life on which we survive. The annual biocapacity of the Earth is consumed at an earlier date each year, after which natural capital is eroded. As anyone in business knows, maintaining capital intact is essential. Running permanent long-term overdrafts is not―it leads to collapse. This book makes it clear that the ultimate source of all value (natural and human capital) is under threat, and sets out a series of practical and useful measurement tools that can aid business managers in the necessary turnaround. Measuring and managing an organization’s social and environmental impacts is a useful start, but this book goes much further. With its systems-based philosophy and context-based target setting, it offers the kind of transformational thinking so necessary to reorganize business ecologically.”--Markus J. Milne, professor of accounting, University of Canterbury

“In order for sustainability reporting to provide an accurate picture of a company’s impact on the economy, environment, and the society in which it operates, context must be given to the reported information. While the context principle was introduced in 2002, it has largely been absent in corporate reporting, partially due to a lack of available guidance on how to apply context to reporting. The Multicapital Scorecard is a step forward in addressing this gap and encouraging a widespread dissemination of context-based sustainability reporting.”--Elisa Tonda, head of the Responsible Industry and Value Chain Unit, UNEP

“To build a world where business and society thrive together, companies need to focus on solving the world’s challenges and using the tools of capitalism and markets to do it most profitably. But how will business leaders know whether they’ve made this big pivot or how far they have to go to get to the hard-to-define sustainable? Business has been missing the right metrics and tools. This new MultiCapital Scorecard fills that critical gap. Managers now have the robust dashboard they need to understand how they’re really doing on environmental, social, and financial performance.”--Andrew Winston, coauthor of Green to Gold; author of The Big Pivot

“The MultiCapital Scorecard provides the first multicapital reporting system that makes possible the practice of John Elkington’s triple bottom line. In other words, it brings reporting into the 21st century. Thomas and McElroy are to be congratulated for their conceptually rich, comprehensive, and persuasive book.I am particularly impressed by the authors’ concepts of capital thresholds and allocations; their broad stakeholder focus; their evenhanded approach to all six vital capitals; and their insight that sustainability criteria must be applied to economic capital, too, which shifts the focus from maximizing profits to reasonable returns. The issues The MultiCapital Scorecard addresses―and therefore makes it possible to tackle―are urgent and elude our current systems: climate change, resource depletion, toxic pollution, societal breakdown. I’d like to live in a world where all organizations are run using the MultiCapital Scorecard. I hope such a world is imminent.”--Jane Gleeson-White, author of Six Capitals, or Can Accountants Save the Planet?

“Having spent most of my career in finance, I am particularly struck by the manner in which The MultiCapital Scorecard answers the question about the balance between production, consumption, and profit in an era when the end consumer is demanding transparency. It turns out that performance is, in fact, about impacts on all vital capitals, not just one of them. What a simple, elegant, and effective way of transforming the triple bottom line from theory to practice in organizations. These principles are transforming every aspect of our business.”--Edward R. Townley, CEO, Agri-Mark/Cabot Creamery Cooperative

“Multicapitalism is a profound manifestation of early 21st century economic governance trends. But our capital markets, accounting, and governance systems are rooted in a one-dimensional history, so businesses need new tools to help them adapt―and quickly. Respecting all the capitals used by an organization to create value and communicating how business models are changing, so that wealth is not only created but also distributed to achieve broad-based prosperity, are the principal challenges of our age. That is why adoption of an integrated reporting model is so vital for the future success of the global economy and society. It is also why I am delighted to welcome the publication of The MultiCapital Scorecard, an important milestone on this journey and the outcome of decades of thinking and working with businesses to develop a practical approach that looks to be both scalable and backed by evidence. It is what the market needs, bringing innovation to management thinking and decision-making.”--Paul Druckman, CEO, International Integrated Reporting Council

“Thomas and McElroy’s emphasis on using context-based metrics is fundamental. Operating without context is like standing on a scale without knowing your ideal weight, tracking your speed without understanding the speed limit, or monitoring your income while ignoring your expenditures. In the same way, the sustainability performance of organizations needs to be tracked relative to limits and thresholds in the world, as clearly illustrated by the MultiCapital Scorecard. This is why The MultiCapital Scorecard originates a whole new generation of triple bottom line accounting.”--Mathis Wackernagel, founder and CEO, Global Footprint Network

“Sustainability is mainstream practice. Integration is a keyword. But if we want these words to be truly meaningful in a management context―and to have the positive impact on planet and people that we all hope for―then we must also face up to some hard facts and tough choices. With this long-overdue dose of conceptual clarity and ethical rigor, Thomas and McElroy help us do that, drawing inspiration from the best of systems science, financial accounting, and other disciplines. This is a must-read book for everyone who is serious about responsible enterprise in the age of sustainable development.”--Alan AtKisson, coauthor of Parachuting Cats into Borneo; president, AtKisson Group