Impact Accounting for Product Use: A Framework and Industry-specific Models

169 Pages Posted: 2 Jul 2021

See all articles by George Serafeim

George Serafeim

Harvard Business School

Katie Trinh

Brown University, Department of Economics, Students

Date Written: June 30, 2021

Abstract

This handbook provides the first systematic attempt to generate a framework and industry-specific models for the measurement of impacts on customers and the environment from use of products and services, in monetary terms, that can then be reflected in financial statements with the purpose of creating impact-weighted financial accounts. Chapter 1 introduces product impact measurement. Chapter 2 outlines efforts to measure product impact. Chapter 3 describes our product impact measurement framework with an emphasis on the choice of design principles, process for building the framework, identification of relevant dimensions, range of measurement bases and the use of relative versus absolute benchmarks. Chapters 4 to 12 outline models for impact measurement in nine industries of the economy. Chapter 13 describes an analysis of an initial dataset of companies across the nine industries that we applied our models and constructed product impact measurements. Chapter 14 provides a preliminary discussion of the accounting treatment of product impact estimates within impact-weighted accounts. Our overall conclusion is that the measurement of product impact is feasible, scalable and generates important insights for the competitive positioning and strategy of organizations.

Suggested Citation

Serafeim, George and Trinh, Katie, Impact Accounting for Product Use: A Framework and Industry-specific Models (June 30, 2021). Harvard Business School Accounting & Management Unit Working Paper No. 21-141, Available at SSRN: https://ssrn.com/abstract=3877521 or http://dx.doi.org/10.2139/ssrn.3877521

George Serafeim (Contact Author)

Harvard Business School ( email )

Boston, MA 02163
United States

HOME PAGE: http://www.hbs.edu/faculty/Pages/profile.aspx?facId=15705

Katie Trinh

Brown University, Department of Economics, Students ( email )

Providence, RI
United States

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
60
Abstract Views
352
rank
440,733
PlumX Metrics