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Impact Valuation

Your expert for questions

Robert Prengel
Director, Head of Impact Valuation at PwC Germany
Tel: +49 30 2636-1267
Email

Impact valuation aligns companies more closely with their customers and business partners

The expectation in a social market economy is that conducting business should have a positive impact on the environment and society. This refers to a business's social, economic and environmental impacts along the entire value chain. PwC helps companies identify and close potential gaps between what is expected and the actual impacts of their business.

"Impact valuation" allows management personnel, risk managers, employees, customers and investors to monitor and to manage the overall impact of the company. This makes things like the risk of damage to reputation based on business models and business opportunities more tangible for management personnel. Yet the impact valuation method also secures customer and employee loyalty and makes the business model more resilient.

"If you want to meaningfully capture and manage all of the value created by your business, you need the right tools. Impact valuation is an effective method for achieving this."

Robert Prengel, Director, Head of Impact Valuation at PwC Germany

Creating value outside company territory

Investors are calling on companies to incorporate the impacts of their business model more heavily in decision-making processes, and to be more transparent in their disclosure of those impacts. Job applicants ask questions about the company's societal purpose and prefer employers that make a visible, positive contribution. The public expects companies to declare their use of government subsidies.

Impact valuation delivers additional perspectives

Impact valuation allows the company's value creation vision to be linked with the perspective of external stakeholders. This additional perspective generates added value within the company. The three examples below show who else these additional perspectives are important for:

Investors: Many companies do not yet adequately analyse external impacts as risk factors. This is why the EU has broadened the scope of its regulation of non-financial reporting. From the point of view of investors, lasting commercial success is only possible if value chains create added value for as many of the parties involved as possible. They also expect companies to move forward with the publication of standardised information on social value creation – and to adjust their corporate thinking and actions accordingly. This expectation is also increasingly influencing access to funding.

New talent: In the battle for talent and qualified employees, companies enjoy a strategic advantage if they can clearly explain their corporate purpose in plain terms on the basis of facts.

The public: Governments around the world are increasingly providing assistance to companies as a result of COVID-19. In these circumstances, the public wants concrete proof that the funds are being used for inclusive economic purposes.

Your situation

Relevant applications go far beyond reporting

What exactly is the added value that supports the use of impact-related data? Discussion in this context often focuses primarily on reporting. But this significantly limits the debate, because there are many more applications for this data, as the following examples show:

Business development: Impact valuation encourages holistic decision-making to develop a strategic business model for the future.

Procurement: Appropriate impact analysis and internal reporting help ensure compliance with ESG due diligence requirements.

Sustainability strategy/purpose: Impact data helps to validate the effectiveness of measures in areas of key relevance for the company.

Assessment of business models: ESG due diligence based on impact data supplements the commercial due diligence process. Impact data can be used as a sort of sustainability screening tool.

Capital markets & reporting: Increasingly, borrowing costs are lower when "sustainable financial instruments" such as green bonds or green loans are used. However, they are associated with enhanced reporting obligations with regard to environmental and social impacts.

Product development: Those who integrate impact data in their product development move "in close alignment with their customers".

Communication with customers: Impact stories or tailored communication on the impacts of services or products on people's real lives or society in general can improve customer loyalty.

Our services

From the expectation to actual impact in clearly defined steps

PwC offers an experienced impact valuation team. We provide coordinated, modular "plug & play" project components. This allows individual needs to be addressed in a pinpointed and cost-effective manner for all levels of maturity:

It starts with a strategic analysis: This includes impact screenings, maturity level benchmarking against peers and determining who the stakeholders are. Efficient formats for communication help you to prepare findings and recommendations in a form with which your internal stakeholders can engage.

Learning from specific impact-measuring pilot projects: This might on the one hand involve recording impact for the entire company using a standardised methodology. On the other hand, a pilot project can also pick up on specific decision-making situations and enrich them with impact data. In both cases we offer you tried and tested "plug & play" components to ensure cost-effective implementation and documentation of the pilot projects.

Defining and scaling the target impact model: We help you to efficiently describe and integrate target models and implement them in a manner tailored to your company.

Further integration: We assist you to integrate the impact valuation in relevant standard processes. This includes embedding impact valuation in the IT landscape.

"Impact valuation is the foundation of sustainable development. This is why we actively support you in harmonising the methods and data required for it."

Susanne Klages, Senior Manager at PwC Germany

Our promise

We are your partner when it comes to supporting your impact vision – pragmatic, targeted and tailored to your business situation.

For more than ten years, PwC experts have been passionately engaged in knowledge-sharing networks and partnerships with relevant players and have been providing development resources. We are your partner, capable of taking care of all facets, from strategic design through to IT implementation.

Further insights on the topic of impact valuation

Investing with impact

What is your impact strategy? What difference will your investments make? How do you decide what's right for you, and communicate this clearly to your stakeholders? PwC will work with you to turn your ambitions into a pragmatic approach that integrates impact considerations into the investment lifecycle and merges with existing governance arrangements.

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Nature is too big to fail

PwC Switzerland and WWF Switzerland conclude in their new report, "Nature is too big to fail – Biodiversity: the next frontier in financial risk management", that the financial risks associated with biodiversity loss will become increasingly significant in 2020. As climate change and biodiversity loss mutually reinforce each other and the risk of financial market instability grows markedly, decision-makers face the enormous challenge of responding to these twin crises.

Learn more

Contact us

Robert Prengel

Robert Prengel

Director, PwC Germany

Tel: +49 30 2636-1267

Susanne Klages

Susanne Klages

Senior Manager, PwC Germany

Tel: +49 30 2636-1722

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