CEO Report – May 2021

Be responsive!

Perhaps the volume of zoom calls is making me dizzy but it feels like the world is spinning faster than ever before. I am fortunate to work as part of a thriving network, a community of incredible people passionate about changing the way the world accounts for value. The last month has been no exception and I’m delighted to share with you some exciting updates and observations.  

SVI are developing a new Principle: The rumours are true; this is indeed BIG NEWS. You all know that SVI advocates for a principles-based approach to accounting for value and our seven principles have been the pillars of our work since 2008 so adding a new one was a big decision but one, we felt was necessary. 

This eighth principle will be called “Be Responsive” and a draft standard and short guidance is being prepared (as we speak) that you as members will be able to comment on over the summer. The principle makes it very explicit the need to act or ‘respond’ to the data we collect on social value. It also explores issues of impact risk management and ‘good enough’ data to support decision making. Watch this space. 

Putting stakeholders at the centre: I’m delighted to confirm that SVI are supporting an OECD funded Peer Learning Partnership project. This is a six-month project led by Social Value US coordinating research on stakeholder engagement practices in the ‘for profit’ entities of the social & solidarity economy. To get involved please contact us. 

More ESG explosion and the developments at the IFRS: It seems my last blog on the limitations of ESG was well received and I have been sent many more critiques of ‘ESG euphoria’ – none more so than this piece from former BlackRock chief investment officer. This is such a critical time for our movement; yes, it is good that the capital markets are now very focussed on social and environmental issues but much of this ESG measurement is being confused with more mature sustainability accounting and reporting and could be a dangerous distraction. Achieving the SDGs and tackling complex problems such as climate change and inequality require ‘systems thinking’, measurement of outcomes and a long-term view of value creation. Sadly, the majority of ESG reporting is based on outputs only and is designed merely to identify risks to short term profits. I highly recommend following the views of Professor Carol Adams who is blogging frequently on this subject and the developments at the IFRS – here’s her latest take! SVI will be organising another response to the IFRS’s latest plans for the Sustainability Standards Board. 

The Power Game: Like 3.5 billion other people in this world, I’m a big soccer fan and I don’t often get the chance to talk about this in a work context except a few weeks ago a fascinating story unfolded where twelve of the world’s richest football clubs attempted to break away and form a European Super League (ESL). This was a desperate attempt by greedy owners to satisfy shareholders wanting ever higher financial returns. Nothing new here you might think, but the outrage showed by the players, coaches and fans, who had not been involved in this decision, was so powerful that the decision was overturned. One article described the story as the death of shareholder primacy. Of course, I was pleased that the voices of the fans had been heard but can’t help feeling that without football clubs having more fan ownership or recognition of the non-financial value the game creates, this tension will rise again. I also shared the feelings of one footballer (Patrick Bamford) who said, “it’s a shame there’s so much uproar over money and not racism (or other inequalities)”. Perhaps the failure of the ESL can be an example of how shareholders who relentless pursue profit can be held to account by the people who are impacted by these decisions.  

Global Network Summit: Lastly, I wanted to share the news that we recently hosted conversations with the leads from 26 different Social Value networks aiming for greater collaboration and scaling of our activities. As a team we will be working hard to respond to what we’ve heard and support our networks to achieve our shared goal of changing the way the world accounts for value. 

Kind regards,

Ben