Today, The Value Commission, a three-year collaborative project hosted by Capitals Coalition, has launched a public consultation to seek feedback on the draft Transparency Criteria for the creation and application of value factors worldwide.
A value factor enables businesses to translate the information that they collect across their operations into insights on the value of their impacts and dependencies across natural, social and human capital. Using these value factors, organizations can turn data into actionable insights that allow them to see the bigger picture of their operations and supply chains and enable them to make better-informed decisions that deliver value across the capitals.
Value factors have long been used to help organizations extrapolate the value that is created or eroded based on a decision they make. For example, when evaluating a decision that emits one tonne of carbon, using a value factor (e.g., $185 social cost per tonne of carbon) allows organizations to better calculate the associated health impacts and broader social cost. By using the value factor as a multiplier, they can gain valuable context (e.g., 50 tonnes of carbon x $185 = $9250 social cost). This approach supports better informed decisions and in this example, a clearer understanding of impact and how to mitigate it.
But this information is only as accurate as the value factor that is used to generate it. To ensure that decisions are taken based on the most accurate information available we need to ensure that value factors are credible and that the methodologies used to create and apply them are clear and transparent.
The Transparency Criteria are a detailed set of standards that can be used to improve user confidence in the application of a value factor. The criteria serve as a method to improve the flow of information between developers, users and stakeholders.
This transparency may be related to the scope of the decision they intend to inform, the methodologies used to create them, or the level of detail included in source data used to develop the factors, as well as how justice, equity, diversity, and inclusion were considered in their development. There are currently 53 criteria drafted around these and other broad themes.
The Value Commission is now seeking public comment on the global Transparency Criteria. The consultation is open until 20 October 2023 and can be accessed via the ScribeHub platform here. A parallel piloting phase is also being carried out from September 2023. More information on pilot testing and how to take part can be found here.