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 value –building on the current model

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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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