Shifting the goalposts

1
Shifting the goalposts

• Presentation to
• The Green Business Support Organisation

2
First, some questions for you

• Who sets the goalposts in a business?
• Whats the main goal?
• Who keeps the score?
• Im an accountant

3
Why accountants are a problem

• They are conventional
• conventions that detract from the green agenda
• They suffer from PMT
• (Programmed Monthly Tabulation)

4
Convention-bound tabulations

• Balance Sheet
• a financial snapshot a muddle of historic
  transactions contemporary values
• no representation of human or natural capital
  (unless acquired)
• Accounting Profit
• a confused picture of recent performance
• short-term, risk-ignorant, subjective

5
From artificial to natural periodicity

SALES CASHFLOW PROFIT
time gt

• Prices fall over the life cycle
• Unit costs change
• Profits are a smoothed cashflow
• Accounting profit reduces the duration

6
The merits of cash

• We understand it
• comes in, goes out is there or not there
• We can forecast it
• short-term for liquidity
• over the life cycle for strategy
• We can use it to make decisions about future
  funding, investment, viability
• We can incorporate downstream environmental
  consequences

7
Value

• Value f (future cashflow) / risk
• Value rises if cashflows increase, lives are
  extended or risks reduced
• Value incorporates the potential of tangible,
  human natural capital
• Manage your business on the basis of changes in
  value

8
Environmental consciousness

• Current future implications
• NOT in conventional accounting reports
• NOT encouraged by short-term, inward management
  thinking
• Consequences are reflected in future cashflow,
  life cycle, risk exposure
• Environmental consciousness RAISES corporate value

9
Shifting the goal post
ENVIRONMENTAL AIMS PRESSURES
FINANCIAL AIMS PRESSURES
VALUE-BASED MANAGEMENT
LIFE CYCLE
RISK
CASHFLOW
SHAREHOLDER VALUE
ENVIRONMENTAL VALUE
10
Environmental Value

• Eco-Mass Balance
• INPUT WASTE OUTPUT
• WASTE INPUT OUTPUT
• ? waste,? value to the environment
• VALUE OUTPUT INPUT
• Environmental Value
• CUSTOMER VALUE SUPPLIER VALUE
• Why monetise?
• by integrating environmental shareholder value,
  managerial resistance is overcome and its
  attention is directed toward environmental pay-off

11
Changing attitudes
CHANGE PERFORMANCE PARAMETERS
CHANGE MANAGEMENT BEHAVIOUR
THINK FORWARD THINK OUTWARD
THINK GREEN
12
Finally, any questions for me

• Thank you for your time and attention
• If you require a .pdf copy of this presentation
  or further information please contact
• b_at_ixabiso.com
• 07947 214 094
• barry