SAP Becomes Founding Member Of Value Balancing Alliance
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SAP Becomes Founding Member Of Value Balancing Alliance

SAP announced that it has joined Value Balancing Alliance e.V. (VBA), a nonprofit organization addressing the need to rethink the value contribution of business as it pertains to different types of capital.

The objective of the Value Balancing Alliance (VBA) is to create a standard for measuring and disclosing the environmental, human, social and financial value companies provide to society.

“Along our 10-year sustainability journey at SAP, we have consistently embraced the idea that social, environmental and economic performance are interrelated,” said Daniel Schmid, chief sustainability officer, SAP. “Being part of this alliance will allow us to work with like-minded companies to create the foundation for widespread implementation. It’s another step for us to live up to our vision and purpose to help the world run better and improve people’s lives.”

Eight international companies founded VBA in June 2019; BASF, Deutsche Bank, LafargeHolcim, Novartis, Philip Morris, Robert Bosch, SK Holdings and SAP. Furthermore, Deloitte, EY, KPMG, PwC, the Organisation for Economic Co-operation and Development (OECD), leading universities and stakeholders from governments, civil societies and standard-setting organizations support it. VBA will make its work available to the public, targeting widespread adoption by other companies.

The members of the VBA aim to transform the way businesses measure and value their overall societal impacts. They also want to help companies discover dependencies along the value chain and monetary effect on a company’s value. A smart integration of impact measurement and valuation (IMV) can help bridge the gap.

Shared objectives of Value Balancing Alliance

  • Standardize calculations, ensure comparability of methods, establish a pilot for management accounting and publicly provide outcomes within three years
  • Increase transparency of business decisions and creation and loss of value
  • Work with external bodies to develop and extend accounting frameworks
  • Shift the priority from maximizing profit to optimizing value creation

For example, SAP has been an early adopter of integrated reporting. It participated in the pilot program of the International Integrated Reporting Council (IIRC) in 2013. The following year, it became one of the first German companies to publish an integrated report. Consequently, it gave equal importance to financial and prefinancial value creation and demonstrating how they interrelate.


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