With the same motivation, at a company level we have proposed a methodology, our Figico Impact Valuation Framework, to move beyond GVA. This methodology, which aims to quantify and monetize our positive and negative impacts on society, helps us understand our value creation and make better strategic decisions.
We are working on a new approach to Purpose-driven Leadership to ensure that our impact on society is considered in our strategic decision-making – alongside our operational, legal, tactical and financial concerns. To function optimally, this leadership model requires a fair basis of comparison across all areas, which is why we have begun to measure the environmental and social value we create in financial terms. This process, known as impact valuation, will help us to better understand our material issues, set our sustainability priorities and track our progress toward the ambitions laid out in our Strategic Focus. It also marks another important step toward fully integrated reporting.
In traditional economics, GDP is used to measure the total economic value generated at a national level, while a company’s impact is defined as gross value added (GVA). GVA is generated through traditional financial calculations, such as the payment of wages and salaries, profits generated and taxes paid. However, these metrics have been questioned as they only give a partial picture of wealth and performance. Alternatives to the GDP have been proposed, such as the OECD Better Life Index.
