At the Value Balancing Alliance, our objective is to create a global impact measurement and valuation (IMV) standard for monetising and disclosing the positive and negative impacts of corporate activity and to provide guidance on how these impacts can be integrated into business steering. The standard, or “methodology” as we call it, translates environmental and social impacts into comparable financial data. With our product, we enable business leaders to be changemakers for a sustainable and inclusive future.
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 VBA methodology v0.1 in their companies against several criteria: feasibility, scalability, robustness, comparability, connectivity, and relevance.
This first piloting is an important step towards a standardised methodology for impact analysis across all industries. The testing has shown that the methodology can be used successfully with reasonable effort and how the long-term value contribution of companies can be compared.
Earlier in 2021, the Value Balancing Alliance had published first versions of three papers on Impact Valuation, the General Method Paper v0.1, and papers with focus on the Environment and the Socio-economy. These papers are our first step in the development of the methodology. A global standard for impact measurement and valuation needs to be widely accepted across various industries, geographies and firm sizes. It needs to be continuously adjusted according to the member companies’ feedback. We build a unique knowledge base through continuous feedback from various industries and business units (e.g., finance, strategy, sustainability, HR, EHS) to inform subsequent methodology versions over the next years.
The development of the methodology is an ongoing process and will be made available to the public. In the following months, the methodology will be further developed and refined. Therefore, we collaborate with other stakeholders such as the European Commission and the OECD. In order to become even more significant for all business models, we will integrate additional social indicators and the downstream impacts of production in our next version of the standard (Methodology 0.2).