General Methodology 2: Impact Measurement and Valuation Techniques
The second installment in our General Methodology is now available for public comment
General Methodology 2 Public Comment
Introduction
General Methodology 2: Impact Measurement and Valuation Techniques addresses the measurement and valuation of corporate impacts. The statement builds on the key concepts, definitions, and principles established in General Methodology 1: Conceptual Framework for Impact Accounting by introducing the methods and techniques necessary to develop impact pathways and prepare impact accounts.
The two statements together provide the foundational ideas behind impact accounting, specify a blueprint for developing Topic and Industry-specific Methodologies, and enable the preparation of impact information that provides a comprehensive assessment of the societal value created and/or eroded by a corporate entity.
Highlights
- Articulates a systematic and repeatable three-step process for measuring and valuing impacts based on the logic of impact pathways, covering impact drivers, outcomes and impacts, and the monetary valuation of impacts.
- Outlines the data necessary to prepare impact accounts, linkages to sustainability-related disclosures, and techniques to estimate data, such as life cycle assessment, among others, when data gaps exist.
- Explains the importance and role of the well-being of people in the Methodology, building on the definition of impact established in General Methodology 1. The Methodology presents the OECD Framework for Measuring Well-being as the default framework for describing outcomes and impacts.
- Introduces a collection of methods for measuring impacts, including objective and subjective well-being indicators, and techniques for valuing impacts in monetary terms, including cost-based, market-based, revealed preference, stated preference, and subjective well-being valuation approaches. Detailed guidance for selecting between methods and techniques is provided.
Influences
The development of this methodology builds on frameworks and protocols published by leading organizations in the impact management ecosystem, research and standards of international organizations, and sustainability-related disclosures required by governing jurisdictions and international standard setters, including:
- Capitals Coalition
- European Sustainability Reporting Standards (ESRS)
- Global Reporting Initiative (GRI)
- Impact Management Platform
- International Sustainability Standards Board (ISSB)
- ISO Standards
- OECD Framework for Measuring Well-being
- Social Value International
- The Transparent Project
The content of General Methodology 1 and General Methodology 2 are meant to inform and explain the development of Topic and Industry-specific Methodologies and guide preparers of impact accounts to develop impact pathways in the absence of officially published methodology.
Development Process
The development of General Methodology 2 is governed by the Valuation Technical & Practitioner Committee (VTPC) and follows the Due Process Protocol.
- Development of General Methodology 2 was approved by the VTPC as part of its 2024 work plan.
- Preliminary research and development began in July 2023. VTPC discussion meetings were held in February and May 2024.
- The VTPC approved the Exposure Draft of General Methodology 2 in June 2024.
- Public comment period was launched on September 24, 2024.
Join the webinar
IFVI and VBA will host a webinar on October 29 at 4pm CET / 10am ET to introduce the exposure drafts for:
- General Methodology 2: Impact Measurement and Valuation Techniques
- OHS Topic Methodology
- Water Consumption Topic Methodology
