Products are where businesses significantly touch people’s lives and the environment. By valuing product impacts in monetary terms, organizations can integrate them into decision-making alongside financial performance to make product impacts visible, actionable, and decision useful.
While methodologies for industry-agnostic impacts —such as emissions, water use, or labor practices— are more advanced, more specific impacts that occur when products are used by people remain difficult to measure and value. Yet, it is precisely here, in the interface between business offerings and societal well-being, that some of the most significant positive and negative effects materialize.
To address this gap, the Framework for Industry-Specific Product Impacts was developed under the governance of the VTPC by the International Foundation for Valuing Impacts (IFVI) and the Value Balancing Alliance (VBA) and approved for public comment. It lays the conceptual foundations: definitions, measurement boundaries, attribution principles, and valuation approaches. This framework ensures consistency with broader sustainability standards and aligns with the General Methodology for impact accounting.
From principles to practice
The best-case scenario is when industry-specific methodologies have already been established by subject matter experts of an industry, such as in the case of the VBA’s health and mobility clusters. These provide a standardized reference, ensuring consistency across companies in the same sector.
However, companies operating in industries without such methodologies can still follow the framework to produce their own assessments. As the underlying complexity remains, practitioners applying the methodology should always keep in mind the following set of guiding questions as a support for product impact assessments that want to be aligned with the methodology principles. In fact, a description of the own industry-specific product impact methodology can be derived directly from the answers to this set of questions.
Step 0: Scoping the assessment
Every impact assessment begins by defining its boundaries. Scoping establishes which products should be considered, how they are grouped, and what initial hypotheses exist about their potential effects on well-being.
For organizations with large portfolios, clustering products with similar characteristics can help manage complexity. For producers of intermediate goods, it means tracing how those inputs contribute to final products and their downstream impacts. At this stage, the objective is not measurement but clarity: focusing the analysis where impacts are most likely to be significant.
Step 1: Impact drivers
With scope established, attention turns to the characteristics of products that drive impacts. By identifying and quantifying impact drivers, organizations create the causal link between their activities and the ultimate effects on people and the environment.
It demands data collection, model selection, and alignment with existing standards, reducing the risk of relying on assumptions.
Step 2: Outcomes and impacts
Here the methodology moves beyond drivers to the real-world consequences for stakeholders. Products can have multiple use scenarios—some anticipated, others unintended. Each scenario creates outcomes that affect Natural, Social, Human, and Economic Capital, and different dimensions of well-being.
Clarifying these outcomes requires establishing reference scenarios, assessing which impacts are material, and substantiating claims with evidence. It also means navigating attribution: allocating responsibility fairly between producers of final and intermediate products while avoiding double counting.
The result is a well-defined and evidence-based picture of impacts, grounded in transparency and comparability.
Step 3: Monetary valuation
The final step translates impacts into monetary terms. This is not an attempt to reduce everything to a financial figure, but rather to create a common language that makes impacts comparable across products, sectors, and geographies.
Different valuation techniques and perspectives—whether global, local, or equity-weighted—shape how results are presented. The process is iterative, and answers to some questions may affect responses provided earlier, which should be reflected particularly in the last step of the assessment.
For an impact statement to be complete, product impacts should be taken into account. Positive product impacts demonstrate a company’s purpose and the societal value it generates, whereas negative impacts identify areas where business models may need to evolve. The strength of this structured approach lies not only in its technical rigor and alignment with the path marked by the General Methodology, but also in the discipline it brings to the process.
The guiding questions at each step act as checkpoints, prompting organizations to clarify assumptions, test evidence, and produce results that can be trusted by decision-makers and stakeholders alike, which could assist in accounting the impact of other topics for which a methodology does not currently exist. This is how businesses can move from broad claims to evidence-based insights, building accountability, comparability, and ultimately, sustainable value creation for both society and enterprise. Incorporating these insights into strategy ensures that businesses remain accountable, forward-looking, and aligned with societal needs.
The guiding questions are available for download via the links below, with a complementary template to record your answers and present your methodologies in a standardized way.