The practical part: How our members are testing our methodology

Executive Summary of the second VBA Pilot Study 

At the Value Balancing Alliance, we believe that we must comprehensively understand, quantify, and monetize the impact of our business models to sustainably manage our businesses. We are developing impact accounting methodologies with our member companies and partners with the aim of collecting robust, comparable, and auditable data. To ensure feasibility and relevance for companies, our members annually pilot the methodologies in their day-to-day business. We are constantly developing our methods further. In this process, the experience gained from piloting is an essential source of information.

  

We are proud that we were also able to successfully carry out the second piloting of the further developed methodology v0.2. Compared to the v0.1 methodology, we have also piloted three additional social indicators - child labor, forced labor, and living wages - and gained initial experience with the assessment of the companies' product portfolios. Our members applied the methodology v0.2 to their decision-making, such as purchasing and processing raw materials. Additionally, more companies and industries participated in this second piloting and were able to calculate their impact on society with a reasonable effort. 

 

The piloting shows that our methodology generates valuable data of both the positive and negative impacts of the business model along the value chain. This information can be used in decision-making and steering and also enables us to create significantly higher and tangible transparency about the value creation of a company.

 

The piloting also highlights areas that need to be improved. For example, the maturity of the living wage indicator is lower than that of the others, and its estimated impact has some overlap with the GVA indicator. Member companies agreed that more industry-specific guidance is needed to assess impacts of their product portfolios. These points will therefore be reflected in the next version of methodology.

 

 

 

 

» As with the first pilot, this methodology showed the comprehensive corporate value of our company. This will help us find the right ways to improve our corporate value and disclose the positive and negative impacts for all stakeholders when the downstream methodology is established.

 

Nobuo Fukuda, Representative Executive Vice President, Chief Supply Chain Officer, Mitsubishi Chemical Group Corporation

 

» The addition of further relevant social indicators enabled us to get a more balanced view on risks as well as positive and negative impacts across the supply chain. This is another important step forward in assessing Porsche’s sustainability performance comprehensively.

 

Dr. Sebastian Rudolph, Vice President Communications, Sustainability and Politics, Porsche AG

 

» The second pilot helped us develop even better understanding of the impact management topic. We look forward to continue our engagement with the Value Balancing Alliance in this promising and important space.

 

Daniel Schmid, Chief Sustainability Officer, SAP

 

» Contributing to the VBA, we aim to enable companies to appropriately measure and manage impacts. Consequently, we continuously support the development and piloting of VBA methodology.

 

Robert Prengel, Head of Impact Valuation, PwC Germany

 

» We have founded the VBA to make impact an integral part of corporate steering and reporting. Testing and piloting by our members is central to ensure relevance for companies, pragmatic implementation, scalability and further development of the methodology. Our joint learning sessions with practitioners directly show the potential of the methodology. Through testing and piloting, we are in the unique position to exactly know what we are talking about.

 

Christian Heller, CEO, Value Balancing Alliance

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