AkzoNobel’s 4D Profit & Loss Accounting of a Book

AkzoNobel has been regularly using a 4-Dimensional Profit & Loss (4D P&L) accounting methodology to assess its own operations since 2014. The four-dimensional (human, social, natural, and financial capitals) profit & loss methodology was developed to gain a deeper understanding of the company’s impacts across the value chain. It takes into account not only AkzoNobel’s own costs and profit, but also the value creation (profits) and negative effects (losses) that take place in other links of the value chain.

Since one of AkzoNobel’s main products to the pulp and paper industry is chlorate for white-bleaching paper, it was decided to apply the 4D P&L study to the paper book. This puts the business-specific results of bleaching chemicals production into context and shows the contribution of AkzoNobel to a consumer product.

Natural Capital Protocol used
  • No, but aligns with the Protocol’s framework
Natural Capital Issues
  • Climate & Air Emissions
  • Energy
  • Materials & Resources
  • Waste Management
  • Water
Organizational Focus
  • Product
Valuation Type
  • Monetary
Geographical Scope
  • GLOBAL
Social & Human Capital Issues
  • Employment & remuneration
  • Health, safety
  • Labor relations
  • Skills & knowledge
Value Chain Boundary
  • Direct operations
  • Downstream
  • Upstream
Sectors
  • Chemicals

Key findings

The greatest benefit of undertaking this assessment for AkzoNobel has been around the tracking and monitoring of impacts to facilitate continuous improvement, and around the engagement of employees, suppliers and customers. Demonstrating that AkzoNobel is proactive about measuring its social impact is crucial to maintaining supplier and customer relationships given the current importance of the topic.

AkzoNobel is using the results of the regular 4D P&L assessments to help drive product and service innovation; launch additional community programs, prioritizing those offering more value to society. Regarding human capital, the company has introduced additional talent development and training programs for employees. The HR management team has been benchmarking the results with industry averages and using the information to attract and retain talent.

AkzoNobel is integrating the results of the 4D P&L assessments into business decisions across the company. All employees have access to an Excel tool that allows them to input a specific scenario, such as changing an electricity supplier to one in a different location or implementing a specific community program, and to see the impacts of this change on the 4D P&L. This is critical for employee engagement and raising awareness throughout the organization on all possible impacts of the business on society.

In the future, AkzoNobel would like to include more downstream impacts of their product use.

More information

http://social-human-capital.org/case-studies/akzonobel%E2%80%99s-4d-profit-loss-accounting-book

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