The Impact Observatory organizes a high-level meeting with large Spanish companies and the two world leaders in impact accounting

Tuesday, October 10, 2023. The two reference bodies for impact measurement in the United States and Europe, IFVI (International Foundation for Valuing Impacts) and VBA (Vaue Balancing Alliance), which have been collaborating through a joint venture since last January, have met in Madrid to present joint advances in impact accounting.

Dan Osusky, Chief Research Officer of IFVI - a spin off of the Impact Weighted Accounts developed at Harvard Business School-, and Christian Heller, CEO of VBA, participated in an event led by Ángel Pérez Agenjo, managing partner of Transcendent, and organized by the Impact Observatory, an initiative promoted by Transcendent and Ontier.

The meeting, entitled “Impact Accounting: the pragmatic solution for business leaders to take decision-making and disclosure to the next level”, addressed how the standardization of accounting and impact evaluation methodologies will facilitate the standardization of assessments and measurement methodologies worldwide.

A preview of the joint presentation of financial data and Impact

In this regard, the representatives of IFVI and VBA highlighted the evolution of the joint methodology they are developing, in what direction it is heading and how it is implemented and used at the corporate level and in the financial market.

In addition, they have explained how VBA members are allowed to generate the necessary data along the value chain for business management, financial planning and reporting at the same time. They have also shared with companies how to present the financial statement and an impact statement in the future to understand the creation of total value of business models; and how policy makers and policy makers drive the movement.

Dan Osusky, Chief Research Officer of IFVI, pointed out that “impact accounting is a natural step for Spanish companies on their path to sustainability, and it will help them both to comply with emerging regulatory requirements and to convert the data they are reporting and disclosing into more useful information for decision-making by their leaders and investors. An understanding of the local context is essential for the relevance of impact accounting, and IFVI welcomes and appreciates the opportunity to engage with stakeholders at the local level, as impact accounting methodologies are developed and improved.”

For its part, Christian Heller, CEO of VBA, stressed that “it is increasingly clear that the requirements for transparency of companies' sustainability results are increasing. As a company, we still have the opportunity to help shape this process, both in accounting and in the disclosure of information: and, to achieve a pragmatic, relevant and value-creating solution, companies must submit a joint proposal. That's why impact accounting and the corresponding impact statement now have a more promising approach.”

Computing the impact to get ahead

With this high-level meeting, the Transcendent and Ontier Impact Observatory intends to continue promoting knowledge and management of social and environmental impact on companies. Its objective is to promote leadership that is committed to impact as a lever for growth and long-term value creation for society.

Ángel Pérez Agenjo, Managing Partner of Transcendent and who led this meeting, stressed that “we are very pleased to have organized this meeting between a select group of large Spanish companies with the two leading organizations in the assessment and measurement of impact because it has allowed companies to know first-hand what are the main advances in impact accounting, as well as how to compute this measurement to go ahead”.

The references in the methodology of Impact Measurement

International Foundation for Valuing Impacts (IFVI) emerged from the Impact Weighted Accounts Project at Harvard Business School. In 2022, IFVI was launched as an independent organization in order to scale up and achieve the ambitious goals set by the G7 Impact Working Group in its December 2021 report.

Its mission is to build a global impact economy that provides solutions to the great social and environmental challenges we face, integrating impact assessment into financial analysis, capital allocation and decision-making. That is why it works to translate the impact into the current language and makes information about the impact accessible and actionable.

For its part, Value Balancing Alliance (VBA) is an alliance of multinational companies that come together with the common objective of creating a way to measure and compare the value of the contributions made by companies to society, the economy and the environment; a metric that was not previously reflected in a company's balance sheet. In this way, the alliance translates environmental and social impacts into comparable financial data; through members who test the methodology to ensure its viability, robustness and relevance.

IFVI and VBA have established the Technical and Professional Evaluation Committee (VTPC) to direct, validate and approve the research and impact assessment methodology produced by the cooperation of both organizations. Thus, they have an open source methodology that is comprehensive and applicable worldwide, which will allow companies and investors to translate social and environmental impacts into monetary language and make them comparable to financial performance.