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Workshop: Measuring Value
Les Hems / Director, Climate Change
and Sustainability Services, EY
@leshems @ey_australia
Simon Faivel / Director, Social Ventures Australia
@Social_Ventures
Mark Kramer / Co-founder & Managing Director, FSG
@FSGtweets
Measuring Shared Value
Les Hems
Director, EY
Creating Shared Value Forum
14 April, 2015
Page 2
Agenda
1. 
How does measuring shared value differ to
traditional measurement
2. 
A new approach for measuring value
3. 
Measuring value in practice: The Barossa Co-op
Page 3
Shared value is an evolution
Historical
business conduct
Sell more, deliver
it cheaper and
more efficiently
Maximise value created
from investment
Minimise negative
externalities on
society
Maximise
economic and
societal
opportunities
Acknowledge
impact
Industrial revolution
1990’s >
Measure Financial
Value
Financial
Reporting
Address impacts of
business
Risks to
opportunities
2010’s
Measure Triple Bottom
Line
Measure
impact
Sustainability
Reporting
Measure Total Value
Created
Measure value
Increasing voice of stakeholders eg customers, investors & communities driving change
Page 4
Integrated
Reporting
Approaches to measuring performance, impact
and value
Industrial revolution
Financial Value
•  Market Capitalisation
•  Debt to Cash Flow
•  Total intangibles to Total
Assets
•  Leverage Ratio
•  Total Annual Investment
Return
•  Profit Margin
•  Return on Equity
•  EBITDA
•  Future earnings
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1990s
2010’s
Triple Bottom Line
Impact
Total Value Created
•  Global Reporting
Initiative
•  Social impact
•  Social audit
•  Environmental impact
•  London Benchmarking
Group
•  Cost benefit analysis
•  Total Value Framework
(EY)
•  Global Impact Investing
Network (GIIN)
•  Total Contribution (nef)
•  Total Impact
Measurement Impact
(PwC)
•  True Value (KPMG)
Organisations…. ‘create value
beyond what is captured by
financial statements’, hence there
is a need to find new ways to
demonstrate the total value
created.
EY – Elevating Value Report (2014)
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Copyright © 2014 Ernst & Young Australia. All Rights Reserved. Liability limited by a scheme approved under Professional Standards Legislation
Hierarchy of measuring shared value
Enterprise •  Measuring the shared value created to the core business strategy (for example, Nestle and Stockland) Business Unit Product/Service or Pilot Page 7
•  Measuring shared value achieved at the business unit level (for example, Diageo, GSK, Pepsi and Walmart) •  Measuring shared value from one product/
service or pilot project (for example, Cisco and Coca-­‐Cola) Drivers for measuring value
Corporates
►  quantify the commercial return achieved from their community and
sustainability investments
►  quantify the social, environmental and broader economic value that is
created by their core commercial activities
►  identify how existing initiatives deliver on sustainability and corporate
strategies.
Not-for-profit
►  systematically measure not only the social value they create but also
the sustainability of this value creation and their role in local
economies.
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Before you can measure value you first need
to identify…
Key questions:
1. 
How does your organisation create value?
2. 
What is the type of value created?
3. 
Which stakeholders capture the value created?
4. 
What capitals does your organisation rely on to create value?
The Total value Framework has 3 dimensions:
Ø  The 6 Capitals from Integrated Reporting: – financial, manufactured,
intellectual, human, social and relationship, and natural
Ø  Stakeholders – producers, consumers and wider community
Ø  Time – short, medium and long term measurement
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The EY Total Value Framework
Business process used to create value
Capital Inputs by Stakeholders
MANUFACTURED
Outcomes
focus
FINANCIAL
FINANCIAL
Materiality
Transparency
HUMAN
HUMAN
Plan &
Design
Implement
Measure
Report
SOCIAL
SOCIAL
Stakeholder
NATURAL
Responsiveness
inclusiveness
INTELLECTUAL
NATURAL
INTELLECTUAL
Toolbox
Direct and Indirect Stakeholder outcomes
Direct and Indirect Stakeholder inputs
MANUFACTURED
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Capital outcomes for Stakeholders
Benefits of TVF
1. 
Improved understanding of how to create value and the
different types of value created for different groups of
stakeholders.
2. 
Gain insights into how they can improve the efficiency and
effectiveness of their business to increase a particular
type of value for particular groups of stakeholders.
3. 
Demonstrate their competitive advantage and social
licence to grow.
Page 11
► 
Case Study:
The Co-Op – Heart of the Barossa
The Future
Page 12
Complete
Understand how you create value
Page 13
Outcomes
Page 14
Presentation title
The total value created by The Co-op
Foodland
Page 15
Three steps for implementation
Step 1:
Develop outcomes
measurement systems
and use it as an internal
learning process
Step 2:
When confident,
demonstrate outcomes
to key stakeholders
Step 3.
When confident, report
outcomes to all
stakeholders
Start with a welldefined and
understood program
Share findings with
clients, carers,
family/guardians;
investors and
funders
Focus on key
outcome measures
Benchmark across
programs or with
other providers
Balance quantitative
with qualitative
Take colleagues
step by step
Make sure it is
owned by everyone
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Thank You
► 
Contact:
► 
Les Hems
Director, EY
[email protected]
► 
► 
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