Steve Kelsey: Life-cycle analysis – or medieval accounts?

Help yourself to a congratulatory sherry and mince pie, for it’s the season for frivolity. Those of you who are now thinking I’ve finally lost it, or, rather less charitably, that I’ve started the party season a little early, shame on you and return the pie. The comparison is a good one if you will allow me to stretch an analogy cruelly.

If you were in business in 14th century Italy you had rather a lot on your plate. In Naples alone there were 14 concurrent currencies in operation with their own coins and values, numerically the Roman system was still in use and the means of calculating interest, had the church allowed it, would have been tortuous in the extreme. Instead of interest rates, each lender charged an adjustment – a fee that looked remarkably like an interest rate but was called something different so the lender didn’t go to hell.

So how is this comparable to 21st-century accountancy? Well, it all depends what you are comparing it with. If you are talking about money, there is no comparison at all .The idea is very silly.

However, if you look at what businesses have to contend with today in calculating their products’ sustainability the Medici family had it easy. Fourteen different life-cycle assessment (LCA) methods would be wonderful. A calculation method as efficient as working out a tithe of XVII times MXVII would be grasped with grateful arms.

Is this just another self-indulgent bout of hyperbole? Well, consider the following: as part of an exercise for a consortium we looked at LCA-based models in the marketplace today. We stopped at 54. Each tool has its own dataset or data source, each has its own calculation methods, lists of criteria, declared scope.

Each tool has variation in method at a detail level which adds another layer of complexity, and, even worse than this, the user is able to change scope and report method to suit the task at hand. Imagine your building society deciding what accountancy method, currency and interest rate and tax regime it felt like using when it calculated your payment each month.

Ultimately, sustainability accounting is just that, accounting, and yet there is no one system of calculation and little compatibility between models. We are entering a period of having to make huge decisions but we can’t even calculate where we are.

Steve Kelsey is strategic innovations director at PI Global. Send comments for Steve to  packagingnews.editorial@haymarket.com

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