10/26/12 in Shining Light on “Dark Energy”, part of my “reality math” series, I describe how standard measures of business impacts vastly under-count them, and how it has equally misled our theory and practices of sustainable design.
We’re not counting the consumption required to deliver business services at all, and that’s commonly much larger than the impacts we can trace directly. The article is in the Sept 2012 SB “New Metrics of Sustainability” letter (& here as a PDF). The research for it is the peer reviewed 2011 SEA assessment method published in Sustainability (MDPI). In discussing it on Systems Thinking World I found good added ways to explain the huge problem it causes us. The graphic below shows the scale of the error, the typical four-fold under-count.
But… Why Does the Changing Information Matter ???
Loraine noted that if the same error of perception is the same for all, it might not matter, for example. So, the problem that misinformation distorts every decision you make wasn’t getting through. The question she asked help set up a good explanation.
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10/25/12 Loraine – Thanks for inquiring. I do recognize there is something in my work that is hard to connect with. Maybe its best exemplified by the weird quotes I get occasionally, like my dad’s, the outstanding physics professor who taught me to be so observant I could recognize behavior not following the laws of physics. He finally gave up in exasperation saying “Everything you say is true dear, it’s *just not physics*”. Needless to say, I also had no idea what to say to a response like that!!
The scales of counted and uncounted direct energy demands for operating the model business for the SEA case study.
But that was years ago, and I do see a lot more clearly what keeps people from recognizing how I depart from the common perspective. I am, after all, talking about systemic errors in perception. In this case it’s for the world’s standard setting bodies for economic measures. They’ve been thinking our data was the reality, unaware of how much of business system impacts are hidden from view. Thinking our information is reality is a problem lots of places. Continue reading How mismeasures steer us wrong→
There are a great variety of reasons to organize people
Sometimes it’s to discover something or to accomplish somethingSometimes it’s to connect people who share their views Sometimes for people who share a common world from different views… (but have remarkably different talents and views)
If you know of good examples or methods not mentioned here,
please post comments
It’s Collaborative Work between groups of stakeholders that often “don’t speak the same language”. It takes art, patience and a sound method to get them to immerse themselves in the environment of the problem or opportunity that they need each other to respond to as partners.
This is a brief but relevant comment, from my Systems Thinking World discussions, points out a way the efforts by Goggle and others, to mine “meaning” from of the massive quantities of semantic data now available, is missing a golden opportunity. There are a variety of ways to use the natural structures of languages as a key.
@Ferenc – I don’t recall the subject of data mining semantic meaning coming up, but I sure agree there seems no computer search strategy yet in use for that. I have some original technical ideas of how to do it, but they all begin with learning to recognize how natural languages “integrate common knowledge” for you, by how language communities naturally develop within their own social commons, (or “silo”).
So the first step to learning how to read the natural organization of semantic structures generally is to learn how recognize and observe the development of natural languages and the semantic webs they create. This STW community is one, for example, as is any other community with a sustained internal conversation.
Armed with that, perhaps a computer whiz could learn to crawl the web to develop a lexicon of the code phrases of a great variety of distinctive language communities. That could provide a way to let you search on any topic of your interest, for any language group’s interest in it.
I’ve tried to suggest that to Google a few times, to let people do web searches from a “scientific” viewpoint, or “entertainment” or “youth” or “religious”, “liberal”, “conservative”, “European”, “Asian” or other distinctive community of interest.
Wouldn’t having that option, to look in on other language cultures and learn from what they’re learning from, would be very entertaining and enlightening itself, wouldn’t it?
– Similar spatial mapping methods, like from satellite imagery or network mapping, locate cells of self-organizing systems from their development signatures and boundaries.
A comprehensive method guiding investors to compete for profiting the commons
It would not just count profits but also liabilities, in financial terms, using monetized business ESG balance sheets (eco-balance sheets), in combination with normal financial balance sheets.
Then everyone will see the real societal financial costs of making money today, that present or even past investors might well be held responsible for.
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The full application of this principle is “A World SDG“, to provide TRUE MEASURES of sustainability for business, consumer and policy choices, and applying the basic science research for ‘Scope 4’ accounting and the 2011 Systems Energy Assessment (SEA)paper. It is still “new science” though, and so demands fresh questions too. It takes investigating the actual organization of the working systems of our world, looking for regular patters of in the system as a whole, what causes them and how they are change, more than theory. It’s surprising both how little we notice going on around us, and how much we see but don’t notice what is implies. A workshop method for opening people’s eyes to what’s really happening all around them can be found in the 3Step Method of Learning to Work with Nature.
The original version of this proposal was submitted to the Rio+20 Dialogues for comment and voting as: “Budgeting for “the commons” needs business “ecobalance” sheets, to compare environmental liabilities and benefits”. See “News of the Commons” for introductions to the vision and the systems thinking needed for a commons based approach to sustainability. It’s part of my “reality math” series.
It’s proposed as part of the foundation of collaborative free market institutions needed for the health of the competitive free markets, as an element of Helene Finidori’s “Commons-Sense” and the “commons based economic models” she proposed. Their intent is to solve the global economic crisis by making the commons work for the whole, as a replacement for the paradigm of “prosperity” with ever expanding development.
The proposal would accelerate how the business community is responding to their environmental liabilities. They’re hiring teams of sustainabilty experts, using comprehensive sustainabilty reporting (CSR) to track Environmental, Sustainability and Governance (ESG) factors, following both private and public standards, such as for the Global Reporting Initiative (GRI). The reason business has a new interest in environmental liabilities is that they are driving corporate assessed values, as economic liabilities.
To protect natural resources local stakeholders would still need a say in the use of local resources. To protect global resources for the future an equitable way to restrain growing economic demand is needed. World standards for Comprehensive Sustainability Reporting (CSR) wold accurately assess the impacts of business products. Then Economic Liability Assessments (ELA) of their economic costs to our future, would allow the world to act as a resource commons. It would provide equitable market constraints on high impacts would, to suppress demand, and fund investment in alternatives. ELA reports would be the basis of the “Eco-balance sheets” called for below, to be reported in business annual reports and factored into Pigovian taxes/tariffs on their products and services.
The basic scientific methods of doing accurate CSR and ELA assessments are what are discussed below. The current statistical methods of environmental and economic accounting contain a major systematic inaccuracy. Simply said the error is in relying on tracing individual records rather than assessing whole system requirements,
an inaccuracy caused by not asking who sliced up the pie, to check the accuracy of trying to trace all the crumbs.
a scientific method difference
between economic accounting and systems accounting
Slices of a business energy pie mostly go uncounted when relying on traceable records, leaving out all the energy demands of business services.
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Our Economic Liabilities for Environmental Damage
are direct costs of prior profits for business
that went unaccounted for.
New systems physics (3) would now allow the development of model “eco-balance sheets” to be placed along side normal “financial balance sheets” in annual business reports. That would provide a clear and quicker way than others for using market forces to correct our systemic problem of unaccountable impacts on our future.
Businesses have long accumulated unaccountable impacts by investing in growing irreversible exploitation, and now accelerating depletion, of what once seemed limitless capacities of people and the earth. It’s enormously costly for our future.
Investors and business managers can make better investing decisions if ESG measures capture the whole impact.
Those investment strategies incurred very costly economic damage to our future economy, that the businesses that created them were not charged for. For estimating environmental impact costs like that there are various methods, and some major recent innovations. Continue reading Budgeting for “the commons” needs business “eco-balance” sheets→
To transform the economy to become self-regulating will require our learning how to make accurate physical measurements of our environmental impacts, and associate them with the dollars spent that paid for them. That’s not yet being done, far from it.
Nature builds economies with whole working parts: people, businesses, independent service providers, etc.,. They only deliver their products if all their parts work together, like machines and operators making a working unit. Our traditional measurement methods have just ignored that arrangement of the natural world. Understand our impacts we need our units of measure to match nature’s units of organization, otherwise our errors of measurement become extreme.
The following short article was submitted for the June 1 “Energy” issue of the UNCSD Rio Outreach Forum, but too technical for those discussions.
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It would seem odd, wouldn’t it,… to not count the charcoal used for a family barbeque in its energy use, because a neighbor brought the grilled burgers and vegetables over from their yard…? That’s almost exactly what happens when businesses don’t count the energy used by their outsourced services.
They’re treated as having no demand on nature, according to the ISO 14000 and LCA rules. The real error is evident comparing estimates by the normal rules with the global average and finding nearly all of them far below average, a sign of missing data.
The true totals show dramatically higher levels of real impacts for business
compared with estimates using the standard method people are using
My recent scientifically recognized paper, Systems Energy Assessment (SEA) (1) shows a corrected method, but making sense of such a big error is still a problem. It’s evidently exposing some enormous blind spot(s). The new method used my work on how economies naturally work, with businesses and their services working as individual self- organized units. That’s the critical insight that allowed making a closed account with the parts adding up to the total. Continue reading Our curious missmeasure of impacts (and silver linings)→
Using a new paradigm of biomimicry
to create a global self-regulating financial commons.
This proposal was submitted to the Rio+20 Dialogues for comment and voting. See “News of the Commons” for introductions to the vision and the systems thinking needed. It’s part of the foundation of collaborative free markets needed for the health of the competitive free markets, as an element of Helene Finidori’s “Commons-Sense“. In this case to recognize that the profitability of the whole is threatened by a continued common investment strategy for growth, and needs a way to change to a common investment strategy for well being.
Nature systems initially develop using a “bootstrap” mechanism, growth, that continually expands their control of their environment. For any system’s own internal as well as external needs that self-investment strategy needs to become responsive instead ever more controlling to survive.
See UN Proposal to guide the UN SDG’s by this principle for OWG 7 & 8
Early version: Jan 2014 – A World SDG- and way to thoughtfully manage global systems This and the earlier versions contain a lot of good thinking…
the Most polished final version is a Feb 2014 proposal to the UN: A World SDG
Emmeline, at ethicalcorp.com was looking for recent innovation in sustainability to review for recognition. In a short email exchange she persuaded me to try to find a simple explanation again, for my recent radical discovery. It’s that our information on the scale of energy demands that business place on the economy is “far more holes than cheese“. See also
Thanks very much for your nice reply. If you care to consider it for recognition, last fall I published a long paper on the evidence of a true 80% hole in our information on business end product energy use and CO2, sorely needing attention.
We don’t have information on what supply chain people and business are doing, because they don’t record it or don’t pass it up the chain.
The study identifies a deep structural problem in what we know about complex business supply chain networks. We don’t have information on what supply chain people or businesses are doing, because they don’t record or report it up the chain.
In a contrarian way that large gap in our information is exactly what gets missed by a “focus on transparency and clarity and measurement, being more accurate”. It has to do with estimating known kinds of impacts that go unmeasured for lack of information. It’s only due to the nature of outsourced business services having evident impacts that are individually untraceable, and so provide no data to count. Continue reading SEA – energy accounting “far more holes than cheese”→
In “Beyond Firm-Level Sustainable Capitalism” John Fullerton reviews “Sustainable Capitalism” by Generation Investment Management LLP, as still not respecting our finite world. Maximizing long term gain doesn’t make it sustainable, for example, given the difficulty people have had identifying future liabilities for currently profitable plans. I add a graphic example, of how defining the world as what we know about it is deceiving, and results in:
simply enormous omissions from the information set we usually think of as needed for making good decisions
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It’s great to see such a solid critique of Generation’s “Sustainable Capitalism”, that on the surface seems like remarkably responsive to environmental issues as an investment strategy, far more than than ANY sustainable investment plan of ten years ago. The whole attitude toward avoiding environmental conflict, as a business strategy, may be applied inconstantly today but seems to have really swept the corporate world too.
Posts on this site preceding this one were transferred from my oldest blog, I called “Alongshot“, from its blogspot.com site. My main archive of blog posts is still at my original “Reading Nature’s Signals” blog, perhaps to be transferred at some point, and quite worth site searching for key words like this one for mentions of Keynes.
The move is really from one directory to another, on Synapse9.com, needed to upgrad the format to WordPress 3.1.3. The old blog site just got to be a problem.
My original systems physics research is still at The physics of happening, and scattered around Synapse9.com, along with my collections of images, reference libraries, introductions and writing .
My subjects and writing style, of course, will remain just as “primitive” (whether you saw that as a liability or benefit I leave to you) so the software upgrade won’t really change anything but the look and feel. ;-)
New systems science, how to care for natural uncontrolled systems in context
