In September 2016 AkzoNobel has launched their newly developed 4 Dimensional Profit and Loss (4D P&L) methodology in the Gothenburg Bookfair in Sweden. The method was illustrated with the case study, in which the 4 types of capital along AkzoNobel’s value chain of a book are addressed: Financial Capital, Natural Capital, Human Capital and Social Capital. 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.
The societal value of companies
The reason that AkzoNobel started this initiative was to gain insight into their societal contribution in a broader sense:
“In the course of doing business, companies create societal value in many ways. Not only do they provide their customers with products and services that they need, they also contribute to the economy by purchasing products and services from upstream suppliers. Further, they generate jobs and income for their employees and pay taxes to the government.
Unfortunately, business activities exert negative effects as well. On people and communities, but most importantly on environment and nature. As a result, society is critical of companies. Where traditionally the impact of a company was solely measured in terms of the proﬁt generated for its shareholders and its share price on the stock market, today, stakeholders demand increasingly more insight into a business’ societal contribution in a broader sense. AkzoNobel has addressed this request by developing the 4 dimensional proﬁt and loss (4D P&L) methodology.”
From AkzoNobel: 4 Dimensional Profit and Loss accounting (Paper books are part of the sustainable city)
As a result of this initiative, AkzoNobel is currently at the forefront of the discussions regarding this topic.
The methodology: A robust and repeatable approach
The developed methodology is in line with the Natural Capital protocol and based on public and scientifically robust methods. Hereby AkzoNobel created a robust and repeatable approach that is applicable for all value chains. To encourage a wider use of the approach, the methodology will be presented in the break out session Natural Capital Expended: Four Dimensions of Sustainability of the Natural Capital conference (23-25 November, The Hague).
A sustainable collaboration
Ecomatters has been closely cooperating with AkzoNobel for many years now and during the last two years has been closely involved in the work on 4D P&L in a collaborative way: Together with the sustainability team of AkzoNobel, we have drafted, piloted and implemented this method. For more information please contact Max Sonnen.