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Olam innovates in terms of team and tool: looking ahead to account for sustainable development


I have watched the space of multi-capital accounting for more than 10 years now, including looking at past endeavors (yes full cost accounting was first tested in the 90s!), and most recent ones.

I was very positively surprised last year when attending a presentation by Olam’s ‘Finance for Sustainability’ Chartered Accountant, Ravi Abeywardana (ICAEW member), to see their model called the “Integrated Impact Statement” (at the London Net Impact Conference, May 2019).

Multi-capital accounts have been developing quite fast in the past few years, notably since the E P&L developed by Puma and then Kering. The Big 4, and companies such as the Crown Estate have published tools and results. However, there is today, no “live” and “tested” integrated model (which covers the balance sheet).


In past presentations, and when I teach, I talk about 3 models of multi-capital accounts:

  • “full cost accounting models” (negative impacts mostly on the profit (P&L)),

  • “sustainability assessment models” (those who account both for positive and negative impacts, mostly on the profit (P&L)) and

  • integrated models (which cover the balance sheet).




Today, there are three experimentations of integrated models:

  • one that has started recently at Harvard (Impact Weighted Accounts),

  • one that is ongoing in France (CARE), and

  • Olam’s Integrated Impact Statement (IIS).

The only one that has now been made public and piloted is the one from Olam.

What is interesting and relevant in Olam’s ‘Integrated Impact Statement’ (IIS) model


There are a lot of key Olam elements that I believe are important in any accounting for sustainable development experimentations:

  1. First it is about the long term. According to Olam, incorporating the balance sheet allows them to understand whether business activities are sustainable over the long term by measuring the change in assets (capitals). To be precise, Olam’s IIS tool is composed of 3 elements - Profit and Loss; Balance Sheet; and Risk and Opportunity Statement.

  2. Second, this choice of going for capitals (stock, and not just flows), allowed them “to assess whether operations are sustainable or unsustainable when measured against boundaries” (more about that in their 2019 annual report). This is the only model (out of all three categories) that is pioneering, implementing “boundaries” into their accounting. See the boundary as a bank balance for natural, social and human capital, highlighting whether activities are in the red (overdrawn = bad) or the black (positive cash balance = good). If in the red, management decisions would be taken to mitigate.

  3. Their impact statement is also about taking a systems approach “that captures the complexity and reality of today’s diverse and intertwined ‘eco-agrifood’ systems”. While I commend this approach, it is not clear yet from the published items (online, in their 2018 report, in their 2019 report) how the systemic approach is being implemented within the “integrated impact statement”.

  4. Finally, natural capital is understood at different geographical level (for valuation at least) which demonstrates a sound understanding of accounting for natural capital




Accounting for sustainable development in action

There are three interesting points in their model in action:

1/ Olam have piloted the IIS in 3 business units for 3 different agricultural products in three different countries for all capitals (it is the only integrated model which has been piloted to that extent as of today)

2/ They have “independently validated and shared with experts for their input and further refinement", and

3/ They are using it not just for reporting but will embed within internal management accounting & control, deploying the IIS at profit centre level.

I have been advocating for “the Chief Value Officer” but also for sustainability CFOs and accountants. Like many others now (Danone, Orsted, Manulife, SSE…), Olam created a dedicated Finance for Sustainability department. This is key, as tools depend on the right level of expertise to be implemented and diffused.

We want more

Despite the documents published and details on the source of the valuations used, such as Massachusetts Institute of Technology Global Social Cost of Carbon (Pindyck, 2019), they could go further by publishing detailed methodologies which both the Crown Estate and Kering have done. This would really enhance transferability, debate and move the space forward.

Others, like Yorkshire Water, have done “hackathons” to develop their method even more with partners. Is this something Olam and others within this space could benefit from?

I hope that Olam continues its leadership position within the multi-capital arena and I await further details on Olam’s Balance Sheet and Risk & Opportunity statement, associated methodologies and the system view of accounting. Olam is participating in changing accounting and will continue to do so if it creates the right partnerships and collaborations “to grow the multi-capital accounting mindset” and positively shape the future we live in.


You want more? be in touch. Audencia is created a new pole of expertise with a research centre and an MBA (Chief Value Officer). Watch the space.

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