We must be - and should be!

Written by Ben Carpenter, CEO of Social Value International

Two years ago, I wrote a blog called Cause for Optimism in 2023. As we are about to step into 2025, it feels like the perfect moment to revisit that theme – reflecting on the progress made, the persistent challenges we face, and the reasons to hold onto a sense of optimism for the future.

To begin, it is important to consider the political landscape. 2024 will be remembered as the year of general elections – 73, in fact – marked by a recurring theme of instability, polarisation and a clear message from voters: the current economic system is not meeting their needs.

Indeed, rising levels of inequality are affecting everyone; from the most extreme of human rights abuses to the silent pandemic of social isolation and loneliness. The effects of climate change is causing catastrophic damage to our current way of living and painting a dire picture for future generations.

Against this backdrop, is it still possible to be optimistic? Well, above my desk is a quote from Angela Davis that reads:

Social Value International aims to radically transform the way the world accounts for value. Having been fortunate enough to witness the power of collaboration for meaningful change, I’d like to share 10 reasons for being optimistic in 2025.

1. The peak of ESG

In 2022, under a crescendo of noise about ‘ESG investing’ we published a paper called Going Beyond ESG. This year has seen a notable drop in ‘ESG funds’, with two factors behind this trend giving me reason for optimism. First, there is a rise in lawsuits for misleading ESG claims, with 70% of cases being decided in favour of the claimant. Secondly, we have seen a political pushback against ESG under the banner of ‘woke capitalism’. Whilst the notion of a culture war is far from constructive and the pushback could be seen as a step backwards, I prefer to interpret this as a sign of the status quo feeling threatened – the last cries of an outdated economic model.

2. Pushing the boundaries of financial accounting

In 2022, we pointed to the launch of the International Sustainability Standards Board (ISSB) as a milestone moment. The ISSB, under the governance of the IFRS Foundation, has since published its S1 (general requirements) and S2 (climate) disclosure standards. Alongside these major steps, I am encouraged by the growing technical debate around the integration of sustainability information within financial statements. Which leads me to my third point…

3. The true and fair requirement

In 2024, SVI commissioned a new legal opinion on the requirement for company directors to produce accounts that are true and fair. It examines what this means in the context of sustainability and reveals how we can use existing laws and accounting standards to integrate sustainability information into financial statements. It turns out that externalities are a choice! And the team at SVI is excited to be launching phase 2 of this project in 2025. More information here.

4. The growing shift from reporting to management

Equally (if not more) important than reporting is the need to embed impact management systems and processes into an organisation. In 2025, look out for the EU’s new Directive on corporate sustainability due diligence (CSDDD) that will add further emphasis on management systems for the corporate world. We are also excited to support the development of an ISO Management System Standard for contributing to Sustainable Development Goals.

5. Collaborative efforts for sustainable development

SVI is continuing its partnership with the UNDP to support a community of Accredited Trainers and Assurance Practitioners in implementing the SDG Impact Standards. SVI also contributed to this collective input paper to the 4th International Conference on Financing for Development and looks forward to the Second World Summit For Social Development in 2025.

6. Towards a system for wellbeing accounting

In 2022, SVI updated its definition of social value and the purpose of its standards to be more explicitly about optimising impacts on wellbeing. In 2023, the team worked with GSG Impact to map out a system for wellbeing accounting in the public sector and hopes to develop this further with partners in 2025. It is encouraging to see more wellbeing valuation resources such as the Open Social Value Bank and Measure Up being developed and made available for practitioners. We hope to encourage more of this in 2025.

7. Amplified voices and diverse perspectives for impact

I wrote in 2022 about our work on stakeholder engagement. This is a continued area of focus for SVI, spurring us to lead a piece of research on diverse perspectives that will be published with the Capitals Coalition in 2025. 

8. A new community of investors adopting impact valuation practices

A welcome development this year has been the innovation and enthusiasm to implement impact valuation (at the portfolio level) by a number of pioneering impact investors. This has been the catalyst for an exciting new project hosted by SVI called the Impact Valuation Hub, which will launch its first member cohort in January.

9. Advanced convergence and capacity building

This year, SVI has launched two new train-the-trainer programmes with the Capitals Coalition and the International Foundation for Valuing Impacts. These initiatives present exciting opportunities to build capacity, whilst driving convergence and interoperability with our existing programmes that teach the application of the SVI Standards and SDG Impact Standards. Together, this highly aligned suite of frameworks will support organisations to make better decisions that can enhance the wellbeing of people and support the sustainability of the planet.

10. More people supported through the SVI Professional Pathway

In 2024, we doubled the number of people on the Professional Pathway and are working with 14 of our affiliated networks to deliver training and accreditation services. We will be working hard in 2025 to implement new training and guidance materials to help more people advance their professional competencies in social value and impact management. Find out more here.

So, despite the numerous challenges in our world, I can find many examples of progress in our work that is transforming how value is accounted for and how decisions are made. 

I’ll finish by returning to what I said in my blog from two years ago: I continue to get my inspiration and motivation from ‘zooming’, ‘teaming’ (and perhaps a bit of ‘slacking’) with an incredible group of people. Every day, we are connecting with passionate and talented individuals who are working tirelessly to change the world. That is certainly something to be optimistic about, and leads me to the other quote I have on my desk: