Redefining Value
description
Transcript of Redefining Value
Redefining Value
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COMPLEX PUZZLE
Complicated World
Ecological Footprint = 1,5
Collaboration
Improve Business Case
Bu
sin
ess
So
lutio
ns
Today
Scaling up requires 3 key elements
PRIORITY AREAS
ACTION2020
TO REACH SOCIETAL MUST-HAVES
IMPROVE THE BUSINESS CASE
Long-term vision
True cost, True value management
Traditional managementFinancial
Capital
Natural Capital
Social Capital
Business Manageme
nt
Transformation Needed
Collaboration
Improve Business Case
Bu
sin
ess
Solu
tion
s
Today
PRIORITY AREAS
ACTION2020
TO REACH SOCIETAL MUST-HAVES
Cost of Risk
Radical Transparency
Changing the rulesof the game
Capital Market Valuations
WBCSD Redefining Value
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Integrate natural and social capital measurement and valuation into corporate performance management.
Improve the effectiveness of non-financial internal and external reporting.
Measurement, valuation and reporting reflect the true value of a company and discloses true profit and true cost.
Accelerate progress to a world where more sustainable companies are recognized and rewarded, and therefore are more successful.
TRENDS in CORPORATE REPORTING
Reporting is a dynamic processAnd not a goal in itself, but an instrument to:
1. improve the effectiveness of corporate investments in sustainability
2. trigger internal changes towards integrated decision-making
Key role to play in accelerating transition towards true value
A complex landscape requiring business leadership!
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Disclosure Measurement
ValuationRating & Investment
MVR Disclosure
MVRMeasurement
ValuationTechniques
Ratings & Investment
LowImpact
Lower Impact
Low Impact
Changing the Rules of the
Game
LowerImpact
A process founded on integrated thinking that results in a periodic integrated report by an organization about value creation over time and related communications regarding aspects of value creation.
IIRC uptake: dependencies on capitals
Votorantim Group
And more …
• SASB established in the US in 2013 aims to develop sustainability accounting standards to support publicly-listed corporations disclose material factors in compliance with the US SEC requirements
• GRI G4 guidelines issued in 2013 with a strengthened focus on materiality (stakeholder approach)
• CDSB is expanding its Climate Change Reporting Framework to include information about environmental matters in mainstream corporate reports to be launched in 2015
• EU passed legislation to require member businesses (>500 employees and/or public interest) to disclose sustainability performance last April
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INTEGRATED REPORTING
Financial Accounts
Accounting Principles- GAAP -
Management Accounts
FINANCIAL CAPITAL
Non-Financial Reporting
Non-Financial Principles- GASP -
NATURAL CAPITAL
SOCIAL CAPITAL
HOW-WHAT
Meaningful transparency
Comparability& Materiality
Better informed decisions
EP&L and other methodologies
SP&L and other methodologies
Natural Capital Protocol
Social Capital Protocol
TRUE VALUE
INTEGRATED VALUATION
What about corporate practice? Less than 12% of reports reviewed reflect those sustainability
issues considered to be material to the business.
80% of WBCSD members produce a stand-alone
sustainability report with the rest developing self-declared
integrated reports
75% use the GRI Guidelines with an upward trend to
combine the use of several frameworks
60% of total reports reviewed have some form of assurance
on their sustainability disclosures with limited level as the
dominant form
When known, the average time period between year-end and
the publication date is approximately six months reflecting a
disconnect between sustainability and financial reporting
cycles
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Internal decision-making → External disclosureManagement tools →Reporting frameworks
WBCSD is not new to this space…
Social Profit & Loss AccountFeasibility Study
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Natural and Social Capital Protocol Components
Protocol Frameworks
Sector Initiativesstandardized metrics / methodologies by
sector
Measurement & Valuation of Action 2020 Priority AreasMinimum standards > best practice > methodologies > KPIs
Practical Methodologies & Guidelines
Approaches to measurement & valuation, e.g. S P&L; E P&L; others
Metrics
Key Performance Indicators > Units of Measurement, incl. from SASB; GRI
Purpose > Principles > Scope & boundaries > Overview of Components
Human Rights
Skills & Employment
Inclusive Business
Rural Livelihoods
WaterClimate &
EnergyEcosystems &
Land Use
Sustain-able
Lifestyles
Chemicals
Forests Mobility Cement
Top-down Elements
Bottom-up Elements
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• Generic Natural Capital Protocol
• Sector guides for Food & Beverage + Apparel
• Pilot testing
• Overall coordination• Multi-stakeholder
consultation process
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