Value Balancing Alliance and International Foundation for Valuing Impacts join forces
The Value Balancing Alliance (VBA) and the International Foundation for Valuing Impacts (IFVI) have joined forces to develop one common impact accounting methodology for the public good as well as to advocate for adoption globally. This methodology will allow corporates and investors to translate social and environmental impacts into the language of currency and thus make them comparable to financial performance. We believe that impact accounting significantly improves transparency about how companies create value — for all stakeholders.
This work strives to be business-relevant, pragmatic, scalable, and transferable — building on frameworks and protocols published by leading organizations in the impact management ecosystem and sustainability-related disclosures required by governing jurisdictions and international standard setters, including Capitals Coalition, EFRAG, Global Reporting Initiative (GRI), IFRS Foundation, Impact Economy Foundation, Impact Management Platform, Social Value International (SVI), and the Transparent Project.
Our goals are to:
- Build on the work of ESG standard setters to develop the next level of sustainability information: the monetary valuation of impacts, also called impact accounting;
- Provide relevant data for corporate and financial market decision makers to account for the true value contribution of business to people and the planet;
- Enable businesses and investors to incorporate impact accounting into strategic decision-making and management accounting;
- Align with data collection requirements in sustainability reporting for easy integration into existing reporting structures.
Our strategic ambition is for our impact accounting methodology to be adopted, with the above preparatory work completed, by an international standard setter for rapid global adoption.
To achieve this common goal, VBA and IFVI are jointly:
- Developing one common impact accounting methodology. This work is operationally led by IFVI and governed by the Valuation Technical & Practitioner Committee (VTPC), an independent committee to direct, validate, and approve research and methodology produced by the cooperation of IFVI and VBA.
- Testing the methodology with corporates and investors. This work is operationally led by the VBA and provides feedback on the feasibility of the methodology and usefulness of the results for decision-making.
- Executing joint marketing, communication, and market development activities. This includes advocacy and awareness raising on impact accounting, stakeholder engagement, capacity building, and participating in policy and regulatory processes.
- Cooperating with other organizations operating within the impact management ecosystem. A successful global uptake of the jointly developed methodology can only be achieved in dialogue and co-creation with other leading organizations in the ecosystem.
The joint methodology development process follows rigorous governance, consultation, and piloting processes. You can read more about the Due Process Protocol and the VTPC in the Governance and Due Proces section.
Methodology Development
Our methodology development follows rigorous due process under the leadership of the Valuation Technical and Practitioner Committee. The development of the impact accounting methodology (the Methodology) is a multi-year engagement led by IFVI in partnership with the Value Balancing Alliance.
The Methodology builds on frameworks and protocols published by leading organizations in the impact management ecosystem and sustainability-related disclosures required by governing jurisdictions and international standard setters, including Capitals Coalition, EFRAG, Global Reporting Initiative (GRI), IFRS Foundation, Impact Economy Foundation, Impact Management Platform, Social Value International (SVI), and the Transparent Project. The Methodology is designed to harmonize and build upon concepts, definitions, frameworks, methods, and principles.
Governance and Due Process
The development of the Methodology is governed by the Valuation Technical & Practitioner Committee (VTPC), an independent committee established by IFVI to direct, validate, and approve research and methodology produced by the cooperation of IFVI and VBA.
The IFVI Board of Directors provides oversight to the Due Process Protocol through its Due Process Oversight Committee (DPOC). More information about the VTPC is available in the VTPC Terms of Reference.
In the development of the Methodology, IFVI and VBA will follow the rigorous and credible process outlined in the Due Process Protocol balanced with the urgent and dynamic needs of stakeholders in the face of great social and environmental challenges. As detailed in the Due Process Protocol, formal methodology statements undergo public exposure prior to final approval by the VTPC.
Questions or comments about IFVI governance or methodology can be submitted to the VTPC at VTPCLeadership@ifvi.org, the Chair of the DPOC at DueProcessOversight@ifvi.org, or directly to technical staff at research@ifvi.org.
Workplan
The impact accounting methodology is developed and released on a rolling basis until a complete set of social and environmental impact topics and relevant industry methodologies have been issued. The workplan to develop new topics is released annually and updated as necessary.
The provisional work plan is subject to change throughout its development process, and updates will be shared on our site.
