International Foundation for Valuing Impacts (IFVI)

Background

The International Foundation for Valuing Impacts (IFVI) is an independent nonprofit organization established in 2022, evolving from the Impact-Weighted Accounts Project at Harvard Business School. IFVI's mission is to build and scale the practice of impact accounting to promote decision-making based on risk, return, and impact. The organization envisions a just and sustainable global economy where businesses fully account for their contributions to people and the planet.

Key Strategic Focus

IFVI focuses on integrating social and environmental impacts into financial analysis to enhance resource allocation and achieve long-term financial stability. The organization operates through two primary pillars:

Research: Developing methodologies that convert social and environmental metrics into monetary terms, creating transparent, comparable, and decision-useful impact accounts.

Market Development: Partnering with investors, companies, data providers, and the public sector to implement impact accounting practices.

Financials and Funding

In 2023, IFVI reported revenues of approximately $2.25 million and expenses of about $2.01 million, resulting in a net income of $239,958. Notable funding includes:

Ford Foundation: A grant of $250,000 awarded in May 2023 to support the integration of impact valuation into financial analysis.

MacArthur Foundation: A grant of $200,000 awarded in 2023 to develop methodologies and valuation estimates for impact valuation.

Pipeline Development

IFVI is actively developing methodologies for impact accounting, including:

Global Value Factor Database: A centralized resource of nearly 100,000 value factors for environmental impact accounting.

Interim Methodologies: Resources enabling companies and investors to measure and value environmental impacts in monetary terms, covering areas such as air pollution, land use, waste, and water pollution.

GHG Emissions Topic Methodology: Translating greenhouse gas emissions impact into currency to understand societal costs.

Technological Platform and Innovation

IFVI's innovation lies in its development of impact accounting methodologies that monetize social and environmental impacts, making them accessible and actionable. This includes:

Proprietary Methodologies: Creating frameworks that translate environmental and social metrics into monetary values.

Scientific Methods: Utilizing valuation estimates and data analysis to support impact valuation.

Leadership Team

Sir Ronald Cohen: Interim Board Chair. Co-founder and Chair of Impact-Weighted Accounts; Global Steering Group for Impact Investment (GSG); G8 Social Impact Investment Task Force; Apax Partners Worldwide LLP, Bridges Fund Management, Big Society Capital.

Saori Dubourg: Board Member. Chair of the Value Balancing Alliance Steering Committee; Member of BASF SE Board of Executive Directors.

Conor Kehoe: Board Member. Chairperson of the International Integrated Reporting Council; Member of the Value Reporting Foundation Board; Senior Advisor at McKinsey and BlackRock.

George Serafeim: Board Member. Charles M. Williams Professor of Business Administration at Harvard Business School; Co-Chair of Impact-Weighted Accounts at Harvard Business School.

Robert Herz: Board Member. Former Chair of the Financial Accounting Standards Board (FASB); Former Founding Member of the International Accounting Standards Board (IASB); current board member of Fannie Mae, Morgan Stanley, and Workiva.

T. Robert Zochowski III: President and Chief Executive Officer. Former Program Director of Impact-Weighted Accounts at Harvard Business School.

Katie Panella: Treasurer and Corporate Secretary.

Leadership Changes

The inaugural board meeting in July 2022 marked the establishment of IFVI's leadership team, transitioning from the Impact-Weighted Accounts Project at Harvard Business School to an independent organization.

Competitor Profile

Market Insights and Dynamics

The impact accounting sector is experiencing growth as organizations seek to integrate environmental, social, and governance (ESG) factors into financial decision-making. The demand for standardized methodologies to monetize social and environmental impacts is increasing, driven by regulatory pressures and investor interest in sustainable practices.

Competitor Analysis

Key competitors include:

Value Balancing Alliance (VBA): Focuses on developing methodologies for impact measurement and valuation, aiming to standardize the assessment of corporate impacts on society and the environment.

Impact Management Platform: A collaborative initiative providing resources and guidance for organizations to measure, manage, and report their impacts.

Strategic Collaborations and Partnerships

IFVI has established significant partnerships to advance impact accounting:

Value Balancing Alliance (VBA): Collaborating to develop a common impact accounting methodology for public use, combining corporate and investor perspectives.

Impact Management Platform: Joined as an Observer to contribute to the mainstreaming of impact management practices.

Operational Insights

IFVI's strategic partnerships and development of standardized methodologies position it as a leader in the impact accounting field. Its collaboration with VBA and participation in the Impact Management Platform enhance its credibility and influence in promoting impact valuation practices.

Strategic Opportunities and Future Directions

IFVI aims to:

Expand Methodologies: Continue developing and refining impact accounting frameworks to cover a broader range of social and environmental factors.

Increase Adoption: Promote widespread adoption of impact accounting practices among corporations, investors, and policymakers.

Enhance Partnerships: Strengthen existing collaborations and establish new partnerships to further the integration of impact valuation into financial analysis.