The oft-heard conviction that collaboration is essential for sustainability is one that Sabic, it would seem, has taken to heart. Just last month, the company announced its membership in Together for Sustainability (TfS), a group of over 40 chemical companies partnering to assess, audit and improve sustainability practices within their supply chains, and it has long been active in other forums and organisations, among which the Alliance to End Plastic Waste, of which it is a founding member. This week, Sabic announced that it has now also joined the Value Balancing Alliance as a core member, the highest level of membership offered by the alliance.
A non-profit organisation founded in June 2019 to develop and promote a methodology to assess companies’ impacts on nature, society, and the economy in monetary terms along the value chain, the alliance currently counts more than 25 international companies across multiple industries and sectors as members. Its founding members are BASF, Bosch, Deutsche Bank, LafargeHolcim, Novartis, Philip Morris International, SAP and SK. As a core member, the VBA’s highest level of membership, Sabic will have full access to the alliance’s methodology work and voting rights in the VBA steering committee.
While ESG - environmental, social and governance - considerations are already an integral part of Sabic’s sustainability strategy, the focus of the VBA is on calculating the monetary value of social and environmental impacts. It is striving to develop a standard that translates the ecological, human, social and financial value contributed by companies into monetary terms.
As the VBA states in its position paper: “Monetary valuation of business impacts is the language business understands, it enables comparability, it incorporates the local context and the complexity of how impacts arise and is relatively easily integrated into traditional accounting systems and decision making.”
“At Sabic, we strive to integrate ESG into decision-making at every level and in every area of the global organisation. Standardised sustainability management accounting and steering systems are integral to this process,” said executive vice president of technology & innovation and Chief Technology & Sustainability Officer, Bob Maughon.
The methodology developed by the VBA builds on existing and tested ESG frameworks, peer-reviewed scientific studies, and widely accepted methods for impact measurement and valuation (IMV). The members of the VBA will pilot the methodology in day-to-day applications to test its feasibility, scalability, comparability and connectivity to existing systems.
Sabic brings to the alliance the perspective of a company based in the Middle East region - an emerging market. Its membership will broaden the diversity of the viewpoints shaping the global methodology.
“We are proud to welcome Sabic, one of the world’s largest petrochemicals manufacturers with headquarters in Riyadh, Saudi Arabia, to the Value Balancing Alliance. As we continue to expand our alliance, we are excited to work together with companies like Sabic and continue our efforts in advancing performance measurement and sustainable accounting,” said Christian Heller, CEO of the Value Balancing Alliance.
The Alliance is supported, amongst others, by the consultancy firms Deloitte, EY, KPMG, PwC and BRL; by the OECD and the World Bank as policy advisors and by leading academic institutions, such as the University of Oxford. The Alliance has also received a grant from the EU Commission to develop green accounting principles for the EU to support the implementation of the Green Deal.