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Why we measure Value to Society 

As we strive to become a more sustainable company, we have formally included the concept of adding value to society into our leadership model. We have also adopted a process of measuring the value we create for society.

We are working on a new approach to integrated 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.

What is impact valuation?

Impact valuation is based on the premise that in order to succeed, companies must more precisely understand how value is created and diminished as a consequence of their activities and use this information to mitigate risks and harness business opportunities. Creating this holistic view can change the way in which flows of costs or benefits are understood internally and externally. For example, internally, impact valuation can support decision making, risk identification and innovation, and it can act as a management tool to help orient company strategies toward sustainable activities, solutions and sourcing. Externally, it can help investors and other stakeholders evaluate the influence of social and environmental externalities on business value drivers such as growth, profitability and risk.

Quantifying Value to Society

The impact categories currently included in SGS’s impact valuation approach are selected based on a combination of material business topics, the availability of reliable primary and secondary data and the feasibility of calculation methods. We acknowledge that impact valuation is an emerging topic, and there is much work to be done to develop and standardize our own company approaches. Notwithstanding these limitations, we consider that our assessments have produced results that are directionally correct, and are sufficiently sound for communication and reporting purposes. We are committed to using impact valuation to support our goal of ensuring long term, successful and sustainable value creation for all our stakeholders. We will make efforts to improve the maturity, quality, reliability, consistency, and comparability of measurement and valuation techniques and we shall continue to share our learning on the feasibility, benefits and the practical limitations of impact valuation.

Value Society Model

Capital Indicators and Interlinkages

The business environment is complex and interlinked. Our impact on our capitals is evaluated through highly varied indicators that interact and affect one another in very nuanced ways. Our indicators have been defined to analyze flows within the six capitals. They have been selected based on materiality principles and the available research literature and data. Using our model to chart the indicators allows us to understand the subtle interlinkages between the capitals. This is in line with the objectives of the Integrated Reporting Framework. Note that these indicators are only used to map our direct operations. Our supply chain and services are treated separately.

Capital Indicators and Interlinkages

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