The newly formed International Foundation for Valuing Impacts (IFVI), a spinoff from the Impact-Weighted Accounts (IWA) project at Harvard Business School, held its inaugural board meeting this past weekend to launch the organization.
The goal of the International Foundation for Valuing Impacts is to drive the global integration of impacts in financial analysis to promote effective resource allocation and achieve long-term financial stability. To do so, IFVI will develop methodologies and valuation estimates, conduct research needed to support impact valuation, increase awareness about the feasibility and importance of full impact disclosure, and build market uptake of impact valuation among corporates, investors, and policy-makers.
The IFVI will build on the IWA's impact frameworks, methodologies, and datasets published to date. Since its inception in 2019, IWA has demonstrated that impact-weighted accounts are feasible, valuable, and scalable. It has published 22 papers, conducted over 2 dozen pilots, and released four open source data sets comprising thousands of companies. It has also drafted key principles underlying the display of impact-weighted accounts in conjunction with the Impact Economy Foundation, building on the internationally accepted frameworks, the Natural Capital Protocol (2016) and the Social and Human Capital Protocol (2018). The IFVI has been launched as an independent organization to implement the recommendation of the G7 Impact Taskforce and its December 2021 report, Time to Deliver, which notes:
“Investment decisions are being taken today with incomplete information. We should be working towards a world in which such decisions are thoroughly informed by risk, return, and impact. For this reason, the ITF urgently calls for mandatory accounting for impact as a destination, stressing that the journey towards this goal must be underpinned by greater transparency, harmonised global standards and strong mechanisms to ensure integrity of data and analysis…. The ITF recommends that the G7 countries and partners collaborate with the private sector, standard-setters and academia on approaches to impact valuation. This work is needed to deepen our understanding of how to value impact in a way that allows a meaningful comparison of the impacts and profits of companies, while also revealing the relationship between the two.”
IFVI aims to establish a close partnership agreement with the Value Balancing Alliance to provide efficient scale to accomplish the goals set out by the G7 Taskforce. IFVI and the Value Balancing Alliance will continue to work closely within the valuation ecosystem, through the Capitals Coalition’s Value Accounting Network and Value Commission. IFVI will accelerate progress through partnerships that promote speed and scale, and will build upon and amplify existing robust research.
Work on teaching, case studies, and executive education will continue at Harvard Business School under the leadership of IWA project faculty co-chairs George Serafeim and Ethan Rouen.
The initial Board of Directors of IFVI comprises five directors; additional representatives will be named once the establishment of the entity has been completed. The directors are:
Sir Ronald Cohen (Interim Board Chair): Co-founder and Chair, Impact-Weighted Accounts; Global Steering Group for Impact Investment (GSG); G8 Social Impact Investment Task Force; Apax Partners Worldwide LLP, Bridges Fund Management, Big Society Capital. Co-founder British and European Venture Capital Associations, Social Finance.
Saori Dubourg: Chair, Value Balancing Alliance Steering Committee; Member, BASF SE Board of Executive Directors.
Conor Kehoe: Chairperson, International Integrated Reporting Council; Member, Value Reporting Foundation (VRF) Board, Member, G7 Impact Taskforce; Senior Advisor, McKinsey and Blackrock.
George Serafeim: Charles M. Williams Professor of Business Administration, Harvard Business School; Co-Chair, Impact-Weighted Accounts, Harvard Business School.
Robert Herz: Former Chair, FASB; Former Founding Member, IASB Board; current member of the Boards of Fannie Mae, Morgan Stanley, and Workiva, served for many years on the Boards of the SASB (and its successor the Value Reporting Foundation) and as an Executive-in-Residence at Columbia Business School.
The Board has appointed the following as Officers of IFVI:
T. Robert Zochowski III: President and Chief Executive Officer.
Katie Panella: Treasurer and Corporate Secretary.
Sir Ronald Cohen, Interim Board Chair, remarked “This is a tremendous step forward in creating more inclusive and sustainable economies based on impact transparency. IFVI will drive the global establishment of standardized monetary valuation of impacts created by businesses and investors to complement existing efforts to standardize physical metrics. We are ushering in the era of impact and profit, where both drive resource allocation and the valuation of companies.”
Please contact T. Robert Zochowski III at email@example.com with media questions. The existing IWA team and their email addresses will remain at Harvard Business School until December 2022 while IFVI’s operations are fully established.