Impact Accounting Methodology
A groundbreaking methodology to incorporate impact into decision-making
At the core of IFVI’s mission and vision is a globally applicable and comprehensive impact accounting methodology for the public good that accounts for a company’s full contribution to society.
In 2022, IFVI and the Value Balancing Alliance (VBA) established a partnership to develop this methodology as well as to advocate for adoption globally.
Introduction
The impact accounting methodology (the Methodology) is a system of interrelated statements accompanied by supplemental resources such as Bases for Conclusions and Practitioner Guides.
Statements outline the purpose and scope of each methodology, define impact pathways articulating how specific activities of a corporate entity produce impact, the data needed to apply the methodology, and the approach to valuing the articulated impacts (commonly referred to as ‘value factors’).
The Methodology leverages metrics required by major standard setters and regulators, expert stakeholder perspectives and robust academic research, established and innovative quantitative methods in valuation, and feedback from users to ensure usability, credibility, and rigor. It builds 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.
Use cases
The Methodology is available for use as a public good for companies, investors, and other stakeholders across a wide range of use cases related to reporting and decision-making, including corporate management, portfolio allocation, and policymaking.
It is designed to be used comprehensively, but can also be adopted incrementally for specific topics of interest. Recognizing potential limitations that users might experience, users are encouraged to apply the methodology to the fullest extent possible based on their circumstances.
To enable these use cases, intermediary organizations such as data providers are also able to incorporate impact accounting into their systems.
Furthermore, other organizations are encouraged to build off the general principles and practices outlined in the methodologies to expand the scope of the existing methodology to encourage wider experimentation and adoption as official methodologies continue to be developed.
For more information on how organizations can use and apply impact accounting, visit the Impact Accounting in Practice page.
Architecture
The Methodology is organized by General Methodology, Topic Methodologies, and Industry Specific Methodologies:
Methodologies that are currently available are outlined below. For a provisional architecture outlining existing, planned, and possible future topics for methodology development, see here (forthcoming).
General Methodology
Establishes the system of and conceptual elements for impact accounts, including its overall purpose, users, and general measurement and valuation methods.
Environmental Topic Methodology
Considers impacts on and through the natural environment.
Social Topic Methodology
Considers impacts directly on people and society.
