BASF's value contributions accounted for by Value Balancing Alliance for the first time
May 12, 2021
The Value Balancing Alliance (VBA) piloted its methodology for standardized accounting of corporate value contributions. For the first time, the initiative used its method to calculate BASF's economic, environmental and social impacts.
How can companies' contributions or impacts on the economy, society and the environment be made measurable and comparable? Based on this question, BASF founded the Value Balancing Alliance e.V. (VBA) in 2019 together with seven other companies. The aim of the initiative is to develop within three years a cross-industry standard for measuring the overall impact of companies that captures economic, environmental and social aspects of business activities along the value chain. By converting corporate value contributions into monetary value, the overall impact of companies in any industry can be made tangible and comparable.
In a pilot project, the VBA method has now been applied to all member companies for the first time and the results were published anonymously. Thus, value added was also calculated for BASF for the first time using the VBA method. This can be compared with the results of the Value to Society method developed by BASF with external experts, according to which BASF has calculated its value creation holistically every year since 2013. BASF contributed its Value to Society approach to the development of the VBA methodology.
"Companies make a major economic and social value contribution. This goes hand in hand with an ecological footprint. We need standardized methods to make these relationships measurable and comparable. In this way, we support companies in their decision-making and enable targeted contributions to solving problems such as climate change," says Christian Heller, CEO of VBA.
"The successful piloting across different industries is unique in its kind and a milestone on the way to a new standard," says Jörg-Frederic von Walcke-Wulffen, Sustainability Strategy expert at BASF. "It allows us not only to compare the results with our previous calculations, but also to contribute to comparability between different industries. “
The results of the two accounting methods for BASF's value added are largely consistent. In the area of the environment, the method accounts for negative value contributions of BASF's entrepreneurial activities on balance. For the impact on the economy and society, on the other hand, the calculation resulted in positive value contributions. A deviation results from the different methodological approaches in the calculation of the social impact. Overall, BASF makes positive contributions to society according to both calculation methods.
Over the next three years, the VBA will continue to develop the methodology step by step and further test its applicability. A second pilot is planned for later this year.