On the 20th and 21st October, Social Value International and Social Value Thailand co-hosted this year's Social Value Matters Conference (SVM). The theme of the SVM2021 conference was “Leading our transition to a sustainable world” and explored how accounting for a broader sense of value, one that accounts for the wellbeing of people and planet, will transform the way decisions are made and contribute to the achievement of the United Nations Sustainable Development Goals.  

Throughout the conference, several key themes emerged including the importance of accountability, the need to include the voices of stakeholders in the decision-making process, the urgency of change, and the vital inclusion of young people in the transformation we need. These themes were particularly pronounced in the session “Valuation in the Boardroom” - a session supported by the Value Accounting Network.  

The urgent need to change the way we make decisions 

Over the past decade, we have seen calls for organisations and governments to change the way they make decisions and ensure people and planet are protected, respected and valued.  

With COVID-19 exacerbating, and exacerbated by, pre-existing inequalities and the climate crisis threatening our future, it's clear that there is an urgent need to transform the systems around us and to do this, we must first transform the way in which decisions are made. We can no longer make decisions based solely on the financial impact they create. Instead, we need to account for the impact we have on people and the planet, and then use this knowledge to make decisions that not only provide a financial positive return, but also a positive social and environmental return too.  

As we head into COP26, all eyes are on global leaders, who will, over the course of the next few weeks, make commitments that could transform the planet around us in one of two ways – they could make (and keep) bold commitments to achieve sustainable development, cut carbon emissions and transition to a green economy, or they could continue to make decisions in the same way, ensure business as usual, and jeopardize the future of our planet.  

Organizational decision making 

And whilst global attention might be on COP26 and the actions of our global leaders, it is important that across the spectrum, all leaders step up and create the change we need. At an organizational level “CEO’s must have a strong belief in the business case – believing that acting sustainability and embedding into the operations of the organization will help to improve the bottom line” said Somphon Chitphenthom, President of Tris Corporation.  

Accounting for a wider definition of value and understanding the social and environmental impact of an organisations activities is vital if we want to address the challenges of rising social inequalities and climate change. When an organisation measures and accounts for this impact and uses this information to inform the way in which it makes decisions, it can transform the strategic priorities of an organisation and ensure that organisational activities are decided upon, not only based on the potential financial return they might bring, but also the positive (or negative) impact they may have on people and planet.  

But whilst it is important that organizations strategically embed a wider definition of accounting for value into their operations, it is also important that the way they make decisions based on this information also changes.  

The Capitals Coalition recognises that the success of organisations around the world is dependent on the value they receive from capitals. Their work focuses on enables organisations to understand how their success is directly or indirectly underpinned by natural capital, social capital and human capital, empowering them to make decisions that offer the greatest value across all capitals. To guide organisations on this journey, the Capitals Coalition has published two Protocols to enable organizations to identify, measure and value their impacts and dependencies on natural capital, social capital and human capital. Both are freely available to download on their website here. 

In many cases, board members and the actions of boardrooms are limited by the traditional rules and culture of business. However, as Boardroom 2030 is campaigning for, we have an opportunity to change this and ensure that organizations engage key people to enable them to “tackle the challenges that lie ahead and make necessary decisions to futureproof your business and the world.” 

One of the questions posed by Boardroom 2030 is “How can you break the mold of traditional decision making to listen to the voices of all stakeholders” and in the Valuation in the Boardroom discussion at SVM2021 the answer was: 

“Don't just give young people a seat at the table, give them the table!” 

The importance of ensuring young people have the space to input into decision making was a key theme throughout the Social Value Matters conference and throughout the discussion. It is clear that a key priority for ensuring that decisions are made differently at boardroom level must be to change the structure of boards themselves. Charmian Love noted that if we really want to transform organizations, we must engage young people – “they don’t think linear. They think exponentially!”. 

The inclusion of young people in the boardroom can challenge old habits, ensure the inclusion of new ideas and viewpoints and ensure that those who are going to most feel the impacts of the climate crisis are able to have a say in how we tackle it.  

Stakeholder voice (including the voices of young people) is central to the work of Social Value International. The Principles of Social Value advocate the importance of listening to, and acting upon, the experiences of our stakeholders. If Boardrooms begin to adopt a similar way of working, where they listen, act up and include the voice of stakeholders in their decision-making process, not only will the business begin to make decisions differently, but it will also begin to increase its accountability to those it impacts the most.  

How to convince skeptics 

Yet, whilst many understand why this change in the way decisions are made needs to happen, and are calling for these changes to be implemented, it is important that there is organisational leadership buy in across the board. In the discussion at Social Value Matters 2021, the question of “how do you convince skeptics?” was posed to the panel and there were 2 unanimous responses: 

1) Do not let perfection get in the way of doing good! - If we tackle the notion that measurement of social value, stakeholder engagement and agile decision-making must always be perfect and rigorous, we can begin to understand that small changes can make big impacts, that can improve upon year on year. 

2) Account for it! - Organisations use financial accounting to set budgets, targets and priorities. If we want to really transform the way organsiations operate, we need to ensure that social and environmental impacts are treated in the same way.  

The work of Social Value International and the Value Accounting Network aims to help organisations do just this. To find out more about how these networks are transforming value accounting into ways can support your organisation head to Social Value International and the Value Accounting Network. If you are interested in exploring what a 2030 future looks like for your business and how you can adapt to meet future demands, head to Boardroom2030.  

 

About Social Value Matters 

Social Value Matters is an annual conference and series of discussions organized by Social Value International in collaboration with partners from the Global Network.  

Social Value Matters conferences, shaped and delivered by the global community of members and wider networks in which Social Value International are connected, provide a combination of world-class thought-leadership content and highly interactive workshops to create the standards and practice that can help to create a more sustainable, equitable and positive future. 

Social Value Matters, however, is not a static, standalone conference, but a series of discussions that develop and grow to reflect the wider movement. Throughout the year, Social Value International hosts online webinars and discussions that show case, and push forward, the work of the social value movement.  

About the Value Accounting Network  

The Value Accounting Network has united under the ambition that the value that flows between nature, people, society and the economy must be included in decision-making. 

One reason that the global community is failing to address our collective challenges of climate change, inequity, and the loss of nature is that decisions are based on incomplete information that does not sufficiently account for this value. 

Through the Value Accounting Network, we are unifying to advance the use of value accounting in decision-making. 

Value accounting is defined by the Network as: 

The collection, calibration, and use of information about the relative value that an organization creates or erodes for its stakeholders, using common units. This information is used when making decisions for a variety of purposes. 

The term value accounting encompasses impact measurement and valuation, capitals assessments and accounting, broader valuation methodologies and other approaches such as true price or true cost accounting.