The MultiCapital Scorecard

In our study ‘How CSR is Changing Business’ New Angles asked managers what resources they most needed in order to accelerate sustainability integration at their companies. Top of their list were bigger sustainability budgets and more training programmes. These were followed, in 3rd and 4th place by ‘tools to measure impacts’ and ‘KPI’s & objectives’. In other words – they were underlining the adage that “only what gets measured gets managed”.

And the bad news is that only a small minority of the same managers see any progress on these missing capabilities in the last five years. Even though budgets and training support for sustainability have increased across the board, there is still a lack of effective management accounting tools and performance measures on most aspects of CSR. So in the absence of a solution companies are faced with a major barrier to change, despite good intentions and a clear business case.

It’s true that the UN Sustainable Development Goals are a vital compass for guiding planetary progress over the next 15 years, and can be a great resource for evaluating top-line materiality and setting strategic priorities for individual organisations. It’s also true that WBCSD, GRI and the Global Compact have made a detailed sector-by-sector guide to reporting progress on the SDG’s – see the SDG Compass – but these are external reporting measures and are hard to translate into the operational language and systems driving most companies’ internal management accountability and goal-setting.

However, a solution is at hand. The MultiCapital Scorecard (MCS) is a new methodology designed specifically for company managers by Martin Thomas and Mark McElroy, and published on-line and in book form in 2016. The MCS is a management tool that organizations can use to measure, manage, and report their performance in a fully integrated, context-based way. This means considering social, environmental and economic performance relative to standards specific to the organization.

Martin Thomas has been a strategic advisor to New Angles since our foundation in 2009. At Martin’s invitation we participated in the practitioners’ working group on sustainability accounting organised by the CSEAR at St Andrew’s University. We are now working with Martin Thomas and Mark McElroy to promote the MultiCapital Scorecard. It is a key element of our Pathfinder integrated performance dashboard.

Senior sustainability practitioners and experts have welcomed the publication of the MultiCapital Scorecard:

“Operating without context is like tracking your speed without knowing the speed limit… In the same way, sustainability performance of organisations needs to be tracked relative to limits and thresholds in the world, as clearly illustrated by the MultiCapital Scorecard.”

-Mathis Wackernagel, Founder & CEO, Global Footprint Network

“Most modern corporate leaders understand the need to ensure our business models are truly sustainable.We need to transform the way our economy works, so that we can understand how our businesses use all forms of capital – natural, human and financial. I particularly welcome the MultiCapital Scorecard as a practical scorecard tool that teams across businesses can use to set goals and measure progress.”

-Sir Ian Cheshire, Chair Advisory Board, Cambridge Institute for Sustainability Leadership; Chairman Debenhams; former CEO Kingfisher

“As a company wih global distribution and deep roots in social purpose, Ben & Jerry’s has long been working on a meaningful set of sustainability performance metrics… 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

“The MultiCapital Scorecard is the most important book on accounting in decades…This book has the power to change the world because it not only suggests how accounting can evolve to help create more sustainable corporations but also provides a methodology to do so.”

-John Montgomery, President-elect Benefit Corporation Bar Association, President Lexultima

“Managers now have the robust dashboard they need to understand how they’re really doing on environmental, social and financial performance.”

-Andrew Winston, co-author of Green to Gold

Full details of the methodology can be found at the dedicated MCS website.