Our work

Our starting point 

Economic conditions have changed fundamentally in recent years. Buzzwords like resource-efficient growth, climate neutrality, fair prices, social standards, circular economy and preservation of biodiversity characterize corporate agendas. This transformation is particularly visible in accounting: The book value and market value of companies are drifting further and further apart. Given all this, certain questions arise: What is business success in today’s world? How do I measure success? How do I manage a company? What should be reported to stakeholders and how?

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The graphic illustrates the argument that the economy and society should be seen as embedded parts of the biosphere, i.e. our planetary boundaries. It challenges the current sectorial approach where social, economic and ecological development are regarded as separate parts. Companies play a crucial role to enable sustainable and inclusive value creation. Therefore, it is paramount to identify, understand and ultimately manage businesses multiple impacts on society.

Ilustration by Jerker Lokrantz. Azote for Stockholm Resilience Centre, Stockholm University https://www.stockholmresilience.org/research/research-news/2016-06-14-how-food-connects-all-the-sdgs.html

The methodology behind

There are two major perspectives on value in sustainable finance: Firstly, there is a stakeholder perspective that focuses on positive and negative impacts of corporate activities on the environment and by extension society – the value to society perspective. And secondly, a financial-driven view of how these impacts (and dependencies) affect the (longer term) financial performance of corporations – the value to business perspective. Both perspectives are inherently connected and have, thus, been widely acknowledged as “double materiality”. The VBA embraces both methodological streams, as both streams are fundamental for understanding a company’s long-term value creation.


Impact valuation

The Value Balancing Alliance methodology employs a monetary metric to tangibly discern the impact of business models, place it in the local context of the activity, understand the significance and weighting of individual sustainability aspects and, ultimately, better integrate them into corporate management. 


For example, it makes a fundamental difference whether a company is consuming water in an arid climate (in the desert) or a humid area (by a lake). The value of water is not simply a quantitative function of the number of gallons consumed. A company also has to decide how to use its resources: for research, reduction of climate emissions or water consumption. Human resource development for employees is also very important. A monetary metric helps companies put the value of a program or initiative into context - as shown by the experience of member companies in the regular piloting of our methods.


Our methodology emphasizes the need to avoid offsetting individual dimensions and their indicators: e.g., impacts of greenhouse gas emissions can never be used to offset the financial or social performance of a company. The aim of our methodology is just the opposite.


To understand the underlying calculation methodology for monetary impact valuation better, download our General Methodology paper.

Development and testing

A global impact measurement standard is not only needed to foster long-term thinking, but also to consolidate all the knowledge that has already been created in this field. The Value Balancing Alliance is, therefore, building on the work of leading universities, the experience of its member companies and existing frameworks. Through a structured piloting process conducted by all member companies, the methodology will be regularly tested and the feedback from practitioners and other stakeholder groups will improve the methodology and guidance materials.

In 2020, members of the Value Balancing Alliance conducted the world’s first pilot testing of its kind: Eleven member companies from seven industries ran an extensive pilot testing program across nine regions globally. They tested the Value Balancing Alliance methodology v0.1 in their companies against several criteria: feasibility, scalability, robustness, comparability, connectivity, and relevance. Read on about the pilot study here.

Calculation concept 

The objective of the Value Balancing Alliance methodology is the comparable disclosure of a positive or negative value to the impacts of businesses on society. At its core, the methodology formalizes the calculation logic for impact measurement and valuation (IMV) based on the impact pathways that have been traced in each relevant topic area per indicator. The IMV models require a reliable data infrastructure and processes for the collection of internal company data on operational impacts and external data on value chain impacts.

Value chain boundaries

The influence of a company goes far beyond the boundaries over which it exercises financial or operational control. For example, decisions regarding materials and suppliers have indirect impacts on a company’s supply chain. Similarly, the design of products and services affects how customers use and dispose of products, which leads to indirect impacts on society. Hence, a meaningful assessment of the relationships between companies and nature and companies and society needs to take such upstream and downstream effects into account. Therefore, users of this methodology should apply impact valuation to areas influenced by business activities even if the influence occurs outside the narrow boundaries of mainstream financial reporting.

Value Balancing Alliance Position Paper