Capital Accounting: The 4D P&L

Ecomatters supported AkzoNobel in their 4-Dimensional Profit and Loss Accounting (4D P&L) project during 2015 and 2016 as a part of the internal project team. AkzoNobel monetized the impacts of various capital (environment, economy and society) of its production systems, to quantify value creation in multiple dimensions.

We believe the 4D P&L approach is an innovative way of looking at an economy and increase business value. Thanks to the partnership with Ecomatters we have learnt a lot about how to work with robust and reproducible methodologies and on how to gather data that we are not used to gathering. That allowed us to find valuable results which can be used for strategic decision making.

– Caterina Camerani, Sustainability Manager Pulp and Performance Chemicals

As a frontrunner in sustainability, AkzoNobel wants to have a positive impact on society at large. Using the 4D P&L method of AkzoNobel, they are able to quantify their impact on environment, economy and society. It goes further than the calculation of conventional profit or environmental impacts of a company. In this project, we monetized the Financial Capital, Social Capital, Human Capital, and Natural Capital creation of part of AkzoNobel’s Pulp & Performance Chemicals bleaching production in 2014, as well as of the full value chain of a relevant consumer product: the production of a book. After presenting their work on 4D P&L in the annual reports of 2015 and 2016, the methodology behind this work is now published and freely available for use by everybody who is interested.

This Capital Accounting 4D P&L is a multi-dimensional representation of value creation that is very new and offers various opportunities. AkzoNobel will use the results to identify possible improvements along the value chain and in strategic decision-making.

Ecomatters’ support contributed to:

• A 4-dimensional quantification of part of the company’s impact on society (Natural, Financial, Social and Human Capital)
• Identification of improvement opportunities for AkzoNobel’s own operations, suppliers and customers
• Application of the 4D P&L method along a full value chain: a book
• Co-development of new methodologies, to be able to quantify all types of capital in a relevant, robust and reproducible way