Announcing The Value Accounting Network
We are thrilled to be part of the newly-formed Value Accounting Network bringing together leading organisations to advance the role of value accounting in decision-making, governance, and disclosure.
“I’m delighted SVI will be working with other fantastic organisations who share our mission of changing the way the world accounts for value. I hope this initiative leads to greater collaboration, convergence and opportunities for us all to develop value accounting.”
Ben Carpenter, CEO Social Value International
Read the network’s Joint Statement below.
The purpose of the Value Accounting Network is to advance the role of value accounting in decision-making, governance, and disclosure. To achieve this the members of the Value Accounting Network, collaborate and build consistency in what value accounting is, and how it is applied.
A shared ambition for value accounting
We are united in our shared ambition that the value provided by and experienced by people and nature must be included in all decision-making.
We recognize that one reason the global community is failing to address the collective challenges of climate change, inequity, and the loss of nature is that decisions are based on incomplete information that is not sufficiently accounting for the value provided by nature, people, society, and the economy.
We are working together through the Value Accounting Network 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, preserves, 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, valuation, context driven information and other approaches that you may have heard of such as true price or true cost accounting.
The system of value accounting initiatives
Internationally accepted frameworks such as the Natural, and Social and Human Capital Protocols, Social Value International’s framework, and the System of Economic Environmental Accounting (SEEA) represent the synthesis of previous efforts to standardize approaches.
As momentum grows towards greater use of value accounting in decision-making, there are several new and evolving initiatives which are developing necessary methodologies and guidance to fulfil different needs and objectives.
The leaders of these initiatives regularly engage with one another through various networks and through bi-lateral agreements. They also collaborate through the Capitals Coalition which was established by the community as a forum to challenge assumptions, share learnings and best practice, and travel towards greater understanding and standardization.
It can though be overwhelming to be confronted with so many different approaches. It is not always easy to understand how they relate to each other, and which route is best suited for your needs.
The Value Accounting Network aims to help to address this challenge and will meet at regular intervals to develop a program of work that will:
Clearly display how the various initiatives relate to and complement one another.
Progressively build consistency in how value is reflected and support the role of audit and assurance, in holding decision makers to account.
Support and communicate individual advances made by parts of this community towards greater application.
Continue to explore developments in value-based initiatives, build on each other’s work and harmonize terminology, measurements and boundaries, classifications, parameters, techniques, and value coefficients.
Commonality
As a starting point we commissioned independent research from Sustain Value on the points of commonality between the initiatives. These show that all members of the network are similarly motivated and share a common understanding of the imperative to integrate information across economic, environmental and social dimensions. This commonality will also form the basis for future work together.
We firmly believe it is vital for businesses, finance, and governments to base decisions on value accounting.
We aim to modernize accounting to transform governance practices, decision making, and reporting.
We believe that we need generally accepted principles to account for value.
We believe that integrated thinking, and a holistic systems-based approach is essential.
We embrace and support the concept of ‘capital’ reflecting stocks that can change over time and that underpin increasing or decreasing flows of benefits to people, communities, the environment, and the economy.
We recognize the importance of accounting for holistic value creation, the value of impacts and dependencies on different capitals.
We recognize that the value to society (inside-out) and value to the entity (outside-in) are both essential to assess and report value.
We believe that the trade-offs between capitals and between stakeholders must be specified and addressed in decision making.
We recognize the importance of existing efforts, and we are building on the standards, frameworks and definitions that have already been agreed.
Help create a new normal
If you are reading this, then it is likely that you are already thinking about how value accounting may be able to help you achieve your aims. Whether you work in business, finance, or government you will already be making decisions that could be improved with the contextual information and data that value accounting can provide. The role of standard setting, accountancy, academia, science, and civil society to inform and influence the use of value accounting is also essential.
If you would like to find out how the initiatives referenced here may be able to help you or would like to know more about the Value Accounting Network, then please contact: info@capitalscoalition.org.
The network is curated by the Capitals Coalition in partnership with the Impact Management Project, with additional independent technical support provided by Sustain Value. The initiatives involved in the network alongside SVI are Economics of Mutuality Foundation, GIST, IDEEA Group, Impact Institute, Impact Weighted Accounts at Harvard Business School, Rethinking Capital, S&P Global Sustainable 1, and Value Balancing Alliance.