Werte schaffen, Wirkung erzielenWie lässt sich der Unternehmensbeitrag für die Gesellschaft messen
Hendrik Fink (PwC) und Christian Heller (BASF)Fachkonferenz Verantwortung8. September 2017, Goethe Universität, Frankfurt am Main
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In line with leading global initiatives
Impact Valuation
Roundtable ‘White Paper’
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Recent survey shows 78% of companies SAY they are valuing their impacts, but only 25% communicate externally
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Measuring the impact on people is the right measure for the Impact Explorer
There are multiple ways to carry out environmental and social valuation, PwC uses the ‘Impact on people’ method as this gives a true measure of impact and represents how corporate activities impact
society. It is a method that is widely used by policy appraisers and policy decision makers.
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We create chemistry for a sustainable future –What is our value contribution?
Our task: Design a pragmatic model to measure our Value-to-Society.
Starting questions in 2013
What is value? And for whom?
What is the objective of the calculation?
What models and metrics are available?
What are best practices?
What standards are developed?
What data are requested?
What expertise is required?
…
6 Verbund sites and 352 other production sites
Sales: €57,550 million
> 30,000 raw materials purchased
> 75,000 direct suppliers
> 300,000 customers in almost every industry
> 60,000 product application in the market
Business partners in almost every county
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Our solution: A consistent and scalable model to quantify and value externalities
Model delivers results, which are directionally correct.
Dat
aQ
uant
ifica
tion
Valu
atio
n
Purchase profile: Primary data
Output: Industry data
Supplier impact pathway
ESCHER input-output modelling
Output: Primary data
Sales profile: Primary data
Output: Industry data
Aggregation of operational data
Customer impact pathway
Input-output modelling
Multiplication with PwC’s valuation coefficients
Supply chain Own operations Customer industries Reference points
Basis: PwC’s TIMM framework
Aligned with Natural & Social Capital Protocol
Informed by Impact Valuation Roundtable
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Financial impacts Monetized pre-financial impacts
Net incomeWages
Health & safety
Human capitalAir emissions
Land use
Water consumption
Water emissions
GHGs
Waste
Amortization
DepreciationTaxes
Economic Social Environmental
Scoping guided by materiality, feasibility, availability of data and methods.
Value-to-Society: A comprehensive assessment of our impacts on society in monetary terms
Impact categories Consistent application at corporate, project, and
product level Additional aspects included at project and
product level
Value chain Corporate level: “Production cycle” – supply chain,
own operations, customer industries Project and product level: Use phase and end-of life
integrated on a case-by-case basis
Benefits and limitations for the usability of Value-to-Society at corporate level
Communication
Reporting
Advocacy
Positioning
Over time
Industry benchmark
Relevance of impacts
Progress monitoring
Corporate targets along
the value chain
Goal setting
Risk exposures
Business opportunities
Decision making
Data accuracy and granularity
Maturity level of quantification and valuation methods
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Additional benefits at project & product level (e.g. site development, M&A, R&D, marketing)
Value-to-Society provides complementary information to existing measurement tools.
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Improved integrated thinking through increased understanding of interdependencies.
BASF’s Value-to-Society 2016: Fourth year in a row net positive contribution
Profits
Taxes
Wages & benefits
Human capital
Health & safety
Air pollution
GHGs
Land use
Waste
Water consumption
Water pollution
Full external supply chain Own operations Customer industriesIndirect suppliers Direct suppliers Customers in industries supplied by BASF
Value contribution by BASF purchase Value contribution by BASF operations Value contribution made by BASF sales
Depreciation
-10 0 30bn€ -10 0 30bn€ -10 0 30bn€
BASF’s Value-to-Society in a nutshell
How to increase convergence of methods?
Enabling comparability
How do stakeholders use the provided information?
Being rewarded for efforts
What are value-generating application areas within a company?
Improving long-term business resilience and success
How to achieve an approved, mature, and standardized model?
Embedding in reporting and accounting
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