PowerBuilder Authors: Chris Pollach, Yeshim Deniz, Jayaram Krishnaswamy, Kevin Benedict, Avi Rosenthal


Introduction to 3D Accounting (Part 2)

More on Resources, Activities, People and Footprints

If you accept the concept of ‘3 Dimensional (3D) Accounting’ or the ‘triple bottom line’, as introduced in part 1 of this series, then part 2 drills down into what the real business of a 3D Accounting system actually is. Here I discuss resources, people and activities and how these contribute to ‘footprints’.

Figure 1 shows a high level schematic of the scope of 3D Accounting. In order to account for environmental and social impact, there are two primary organizational entities that we care about: Resources and People. Resources and people are owned by someone or something; they are involved in activities and those activities are combined into processes e.g. production or assembly or delivery processes.

Everything in the schematic: Owners, Resources, People, Activities and Processes can have a Footprint. That is a specific kind or set of impacts from an environmental or social perspective (aside from the financial costs or incomes associated with them). As a consequence of owning resource and people entities, the owner also ‘owns’ the responsibility for their respective footprint(s).

Examples of owners are:

  • An individual – you or me
  • A household – your home
  • A place – a school, an office block, a mall
  • An area – a county, city or street
  • A business – a factory or chain of fast-food restaurants

Examples of resources are:

  • A piece of equipment – e.g. a boiler or air conditioning unit
  • A plant/facility – e.g. an oil refinery or cement factory
  • A means of transportation – e.g. a car, bus, train or plane

People are those individuals or groups of individuals who are the stakeholders in footprint generation. Processes are combinations of people and activities that, in this case, together generate a footprint.

Examples of resource activities are:

  • Running the boiler to heat a home
  • Running the refinery to produce oil
  • Using your car to make a journey

Examples of people activities are:

  • Consuming products/services
  • Using resources e.g. taking a plane trip
  • Functioning in a specific location in a specific way

Resources, People and Activities

While the resource or people/person may have specific attributes associated with it e.g. name, type, status etc. The main thing we are concerned with here is how that resource/people participates in an activity. Because an activity generally has measurable inputs and outputs that can be directly converted into the data that is used to generate a footprint.

An obvious activity that most businesses engage in is consuming energy of one sort or another, like heat and light, that may in turn. But continuing with the example from the first part of this series, here’s one example of how a particular owner, an airline, looks like from a resource perspective:











The most obvious activity that most businesses engage in from a people perspective is travel. Business travel generates a Co2 footprint owned by both the business and the employees doing the travel. But here’s another example of what an airline looks like from a people perspective (something it would share with many restaurant businesses).











This airline’s principle activity, passenger flights, based on these two examples arguably has both an environmental and a social footprint. The resources involved in its activities release Co2 into the atmosphere and the people involved in its activities generate trash for recycling.

Both could incur a cost, e.g. the need to purchase carbon offsets or to dispose properly of recyclable materials. And potentially both could generate an ‘income’, say in the form of tax credits if the Co2 emissions are reduced or the trash verifiably recycled.

Tracking these two activities enables the owner to calculate a footprint at various levels of granularity: At owner (total) level, at aircraft, flight and even passenger level (sub totals). But in order to calculate a footprint, at a minimum the activity needs input and output attributes and a conversion factor.

For the flight resource activity, the input is the fuel needed by the aircraft for the journey. The output is the carbon emissions from that quantity of fuel and the conversion factor is what coverts a unit of fuel into a unit of carbon. The people activity input is the number of meals needed by the aircraft to service the passengers. The output is the volume and type of trash generated and the conversion factor is whatever is needed to convert units of trash types into a recycling ‘unit’. In both cases it’s easy to figure out the cost of the footprint as fuel and meals have a known cost, which can be directly fed in from an ERP/accounting system.

Other activity attributes include frequency and duration as these can help to predict (or in financial terms ‘budget’ for) future footprint expectations. Attributes may also be linked to inputs or outputs, for example the cost of carbon offsets to offset output emissions or some tax credit associated with using a recyclable material as an input to an activity or process e.g. recycled newsprint.


As indicated in part 1 of this series, footprints are the income statements and balance sheets of 3D Accounting; they monitor and visualize the 3D KPIs. A footprint can be a reflection of activities carried out or projected activities. Footprints are primarily focused on managing the income and costs of environmental and social impacts, not managing the financial (profit & loss) performance of the company. Footprints will become the raw material for reporting to regulatory bodies on social and environmental performance of a company. And inevitably footprints will be eventually be schematized into XML/XBRL and subject to international agreed taxonomies - but that may be some way off…

Coming Soon…

In the third and final part of the series I will introduce a prototype 3D Accounting system, operating as an online service. This will enable you can try out the concept of 3D Accounting and think more about this stuff yourself.


More Stories By Stewart McKie

Stewart McKie has 25 years of IT industry experience. His education includes a MSc in Organization Consulting and a MA in Screenwriting. I was the Technology Editor of Business Finance magazine during 1995-2000 and also wrote regular features for Intelligent Enterprise magazine. I am the author of six books on accounting software and over 50 technology white papers. My current focus is my screenwriting 2.0 app called Scenepad and my supply-chain auditing app. I have managed many ERP selections and implementations of SunSystems all over the world. Currently I am engaged as the Implementation Oversight consultant for a global AX2009 rollout for a manufacturing client and as the selection consultant for pan-European ERP solution.