IFVI and the Value Balancing Alliance (VBA) have joined forces to develop one common impact accounting methodology for the public good as well as to advocate for adoption globally.
Our 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.
Our work strives to be business relevant, pragmatic, scalable, and transferable. We are 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.
- Build on existing work to develop the next level of sustainability information: the monetary valuation of impacts, also called impact accounting;
- 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;
- Provide relevant data for corporate, financial market, and public sector decision makers to account for the full value contribution of business to people and the planet.
- 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. The joint methodology development process follows rigorous governance, consultation, and piloting processes.
- Testing the methodology with corporates and investors. This work is operationally led by the VBA and provides feedback on 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.
Our 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.