Dr Thomas Wiedmann

1
Third Annual International Sustainable
Development Conference Sustainability Creating
the Culture 15-16 November 2006, Perth, Scotland
Triple-Bottom-Line Accounting of Social, Economic
and Environmental Indicators A New Life-Cycle
Software Tool for UK businesses
Dr Thomas Wiedmann
Prof Manfred Lenzen
2
SD Reporting TBL Accounting
3
Corporate sustainability reports and
sustainability ratings are increasingly used as
key information for investment and lending
decisions.
There is a growing awareness that shareholders
value is enhanced by increased corporate social
and environmental responsibility.
World Business Council for Sustainable
Development (2002)
4
Challenges remain

• There is little comparability
• A key challenge remains reporting on the links
  between sustainability and the bottom line.
• Business will increasingly be expected to report
  on supplier- and consumer-related impacts of
  activities, products and services.

World Business Council for Sustainable
Development (2002)
5
Trucost Defra (May 2006)
6
Reporting on direct and indirect KPIs

• The Government expects businesses to report on
  their significant environmental impacts whether
  they are direct or indirect.
• Businesses are likely to derive benefit from
  positively influencing their indirect
  environmental impacts.

Trucost Defra (May 2006)
7
Indirect (environmental) impacts
Supply Chain Impacts (upstream)
Direct Company Impacts (on-site)
Downstream Impacts
Energy Water Raw materials Logistics
Boiler emissions Car fleet emissions Manufacturi
ng emissions Landfill waste Recycling rate
Products in use Product disposal
Trucost Defra (May 2006)
8
The problem of quantification

• there is still a lack of quantification in
  most reporting. the majority of reports lack
  depth, rigour or quantification.
• Most business will have supply chain impacts
  that they should understand and consider
  reporting. There is no single, quantifiable
  measure that companies can use as a Key
  Performance Indicator for the effect of their
  upstream supply chain on the environment.

Trucost Defra (May 2006)
9
SD Reporting Principles

• Principle 1 quantitative
• Principle 2 relevant reliable
• Principle 3 comparable
• Principle 4 complete

10
TBL Accounting without boundaries
11
Where to draw the boundary?
12
e.g. total emissions (direct plus indirect)
e.g. direct (on-site) emissions
e.g. purchases of a company
13
BottomLine3 A new TBL software tool
14
(No Transcript)
15
Two data inputs

• Financial accounts
• On-site impacts

16
Outputs

• gt 100 TBL indicators
• Quantification of total (direct and indirect)
  impacts
• Sector benchmarking
• Structural path analysis
• Production layer analysis

17
Main TBL indicators
Indicator My Bakery absolute impacts My Bakery total intensities Total Sector intensities
GDP 120,509 8.69 p/ 46.6 p/
Gross operating surplus 244,853 17.7 p/ 17.2 p/
Employment 13.5 emp-y 1.12 emp-min/ 1.27 emp-min/
Businesses 1.55 0.00004 / 0.00009 /
Greenhouse gas emissions 343 t CO2-e 247 g CO2-e/ 465 g CO2-e/
Energy consumption 1,090 GJ 786 kJ/ 2,640 kJ/
Water use 30.5 ML 22.0 L/ 20.1 L/
Ecological Footprint 99.9 gha 0.72 g-m2/ 1.18 g-m2/
Land use 534 ha 3.85 m2/ 6.99 m2/
Particulate Matter lt2,5mm 0.014 t 0.010 g/ 0.016 g/
18
Benchmark spider diagram (TBL)
19
Production Layer Decomposition
Energy demand (GJ)
Company
Suppliers of Suppliers
Suppliers
20
Structural Path Analysis
21
Structural path analysis (particulate matter)
Rank Path Description Path Value Path Order Percentage in total impact
1 Refined sugar gt My Bakery 0.008 t 2 58.5
2 Raw sugar gt Refined sugar gt My Bakery 0.0011 t 3 7.56
3 Animal food gt Poultry gt My Bakery 0.0010 t 3 6.79
4 Paper products gt My Bakery 0.0006 t 2 4.14
5 Paper containers gt My Bakery 0.0005 t 2 3.35
6 Electricity supply gt My Bakery 0.0003 t 2 2.28
7 Electricity supply gt Fresh meat gt My Bakery 0.00016 t 3 1.14
8 Raw sugar gt Animal food gt Poultry gt My Bakery 0.00014 t 4 1.02
9 Raw sugar gt Plain flour gt My Bakery 0.00012 t 3 0.84
10 Raw sugar gt Raw sugar gt Refined sugar gt My Bakery 0.00010 t 4 0.69
11 Electricity supply gt Plain flour gt My Bakery 0.00007 t 3 0.52
12 Animal food gt Untreated milk gt Dairy products gt My Bakery 0.00007 t 4 0.49
13 Confectionery gt Plain flour gt My Bakery 0.00006 t 3 0.44
14 Animal food gt Untreated milk gt Cheese gt My Bakery 0.00005 t 4 0.38
15 Fresh meat gt My Bakery 0.00005 t 2 0.38
16 Animal food gt Pigs gt Fresh meat gt My Bakery 0.00005 t 4 0.38
17 Animal food gt Untreated milk gt Butter gt My Bakery 0.00004 t 4 0.32
22
THANK YOU www.bottomline3.co.uk
www.isa-research.co.uk