Total Value - Impact valuation to support decision-making

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Impact valuation to
support decision-making
| Total Value Impact valuation to support decision making
Introduction to Total Value
How value is created
The Total Value concept
Target users of a Total Value analysis
The Total Value approach
Step 1: Objective
Step 2: Materiality analysis
Step 3: Impact pathways
Step 4: Measurement & valuation approach
Step 5: Data gathering & analysis
Step 6: Assurance & communication
Step 7: So what - action plan
Special Note
Total Value and the Sustainable Development Goals
Total Value and ‘Change’
How EY can help
Definitions used in this paper
References in chronological order
Appendix: example case studies
Total Value Impact valuation to support decision making |
1. Introduction to
Total Value
EY’s Total Value is designed to enable better informed decisionmaking. It helps companies to create more value for stakeholders
and society at large. Total Value aims to measure and value the
most material aspects of value creation, which are usually
hidden or go unmeasured. This information enables companies
and external stakeholders to improve decision-making, as the
Total Value analysis shows how decisions affect the impacts for
its stakeholders and society at large. Total Value, therefore, helps
to improve overall value creation of organizations, as well as to
fulÕll their societal purpose.
| Total Value Impact valuation to support decision making
In our complex world, companies need to develop an increasing
understanding on how they create value for stakeholders and society at
large, to be able to develop a long-term, viable strategy and to keep their
license to operate. Value creation, however, is only partially captured by
a company’s Õnancial statements, since the latter mainly reÖect its
Õnancial and manufactured capital. Other forms of capital, such as social,
human, intellectual and natural capital, are only partially or not visible
at all in a company’s Õnancial accounts. Since these forms of capital
often remain invisible, the question arises whether companies, and
their stakeholders, have the right information base to make decisions
and mitigate risks that could affect their overall value creation.
Companies face dilemmas and have to make trade-offs between various
forms of capitals, which are often measured in various non-comparable
units. Furthermore, these trade-offs often have strategic implications.
For instance, should a company invest in a safety program to improve
its overall ‘lost time injury’ (LTI) rate, or should the money be invested
in product innovation or an emission reduction program? This decision
is in fact a trade-off that affects the value creation for society at large
(climate change), employees (LTIs) and the company’s customers (product
innovation). At the moment, companies make such decisions consciously,
but base their decisions on qualitative criteria.
Case study
Novo Nordisk introduces an EP&L approach to reduce their
environmental impacts
Novo Nordisk performed a measurement and valuation of the
environmental impacts within its own operation and within its
supply chain. The results of the Novo Nordisk EP&L reveal that
Novo Nordisk’s most material impacts on nature occur within the
Õrst and third tiers of the supply chain. If environmental costs
relating to water consumption, greenhouse gas (GHG) emissions
and air pollution were to be internalized, Novo Nordisk would
have to pay EUR 29 million in 2011 for operational activities
(core activities) alone. Looking further down the value chain,
the costs increase substantially. Environmental costs across tiers
1, 2 and 3 amount to EUR 194 million or 87% of the total cost.
Impacts in tiers 1, 2 and 3 are generated by suppliers and their
respective supply chains in different geographical regions
throughout the world. Novo Nordisk states that “impacts in tiers
1, 2 and 3 are outside of Novo Nordisk’s direct control and therefore
Source: Novo Nordisk, TruCost
Total Value Impact valuation to support decision making |
2. How value
is created
Externalities and shared value
A company’s value creation is often subdivided in externalities and
shared value. Shared value refers to value creation for stakeholders,
such as customers, suppliers, local communities or employees.
The value exchanges with society at large are referred to as “externalities,”
indicating that these are external to the entities that cause such effects.
Externalities can be either positive or negative. A positive externality typically
occurs when the consumption or production of a good causes a beneÕt to
a third party. For instance, several companies decided to invest in training
and education of local communities. This enables these companies to hire
well-skilled employees locally, while simultaneously creating value for
society at large by an overall improvement of skills and living standard
in the long run. Negative externalities arise, for instance, if chemical
producers cause spills and as a side effect contaminate water bodies and
consequently impact local Õsheries’ income negatively.
The negative impact of companies on society and the environment has
been extensively covered by various media over the past decades. The rising
demand for resources exceeds three out of the nine planetary boundaries
beyond safe thresholds: climate change, the rate of biodiversity loss and
the rate of interference with the nitrogen cycle. This is attributable to the
linear economy primarily based on the principles of “make, use and trash”
that Õrst occurred in the 19th century and persisted throughout the 20th
century. The linear economy has done a tremendous job in contributing to
innovation and creating wealth for humanity. However, the linear economy
has introduced many negative side effects. As a result, humanity faces a
range of “hidden”, long-term issues such as resource scarcity and the
degradation of our natural ecosystems and their impacts on human health
and society. The Western world depends heavily on relatively few foreign
suppliers for a large number of metallic minerals used in the energy and
high-tech sector. There, too, resource scarcity will increase the volatility
of food and energy prices. As a result, foreign investors are purchasing
land to secure their supply of food and raw materials.
The top-100 externalities report from TEEB1 made clear that externality
costs of primary production (agriculture, forestry, Õsheries, mining, oil and
gas exploration, utilities) and primary processing (cement, steel, pulp and
paper, petrochemicals) total US$7.3 trillion, which equates to 13% of global
economic output in 2009. In 2013, the authors of the book Meatonomics
calculated the externalized costs of the animal food system imposed on
1 The Economics of Ecosystems and Biodiversity (TEEB) is a global initiative focused on “making
nature’s values visible.”
| Total Value Impact valuation to support decision making
taxpayers, animals and the environment to equal US$414 billion annually.
With yearly retail sales of around US$250 billion, that means that for
every US$1 of product they sell, meat and dairy producers impose
almost US$2 in hidden costs on society at large: a US$4 fast-food
hamburger really costs society about US$11.
The Rana Plaza incident evidenced that the negative social externalities
of globalized industries cannot be underestimated. In April 2013, more
than 1,130 people died when the Rana Plaza building near Bangladesh’s
capital, Dhaka, collapsed as a result of poorly maintained housing
conditions for workers. The incident made clear that the rise of fast fashion
retailers and discounters has changed the way global supply chains are
organized, including the potential risks and social impacts.
The question emerges whether these externalities are truly external or
if these are next in line for internalization? Legislation has already led to
internalization in the past. Carbon pricing, for instance, by the EU-ETS
mechanism is a likely candidate for further internalization after the
realization of the global climate change agreement signed at the COP21
in Paris. Other examples of internalized costs include extended producer
responsibility (EPR) or the WEEE2 directive for e-waste.
Next to externalities we refer to the concept of shared value. In his
article on “Creating Shared Value”3, Porter explains that one of the key
issues with businesses is that Él`]qj]eYafljYhh]\afYfgml\Yl]\
YhhjgY[`lgnYdm][j]Ylagf&É He states that Él`]q[gflafm]lgna]onYdm]
Recently, several companies started to measure the shared value creation
of their products in practice. For instance, both Unilever and Philips
have metrics in place to measure the number of “lives improved” by the
company. Such “life improving” products provide superior hygiene, or
cause environmental beneÕts through the use of the product. A typical
example of shared value creation is to partner with suppliers by helping
them to operate more energy efÕcient in return for products with lower
prices or improved quality. Organizations now also report about shared
value creation in the context of their contribution to the Sustainable
Development Goals. (For more information, please refer to chapter 5).
Insight in an organization’s shared value and externalities will therefore
help companies to assess and manage Õnancial, reputational, legal and
operational risks and opportunities related to these externalities.
Total Value deÔned
Value exchanges with society at large
Induced creation of jobs
Supply chain biodiversity impacts
Scarcity of natural resources
Systemic economic impacts
Not captured by company’s accounts;
value created/abstracted for/from others
Value exchanges with stakeholders
Incidents due to unsafe working conditions
Community investment
Employee learning
Product environmental impacts
Social impact of products or services
For whom
Local communities
Intrinsic value
Figure 1
Shared Value
Partially visible in
company’s accounts;
shared costs and beneÕts
Total Value
For whom
Society at large
captured by
the organization
Visible in
Intrinsic value, shared value and externalities
2 Waste Electrical and Electronic Equipment.
3 Each cited publication is listed chronologically in the reference list.
Total Value Impact valuation to support decision making |
Case study
Siemens calculates the “real electricity costs for society”
by using SCOE
Siemens leverages their SCOE — Society’s Costs of Electricity —
approach to estimate the “real costs of energy.” This approach
accounts for aspects currently unaccounted for. The approach
includes (partially hidden) subsidies, grid access costs, variability
costs, social costs, economic beneÕts and geopolitical impact.
Using SCOE enables the comparison of the different technologies,
based on actual social impact factors and beneÕts. The cost of
wind power in general, but offshore wind in particular, declines
considerably from the simpler traditional cost price calculations.
Siemens argues that, based on the SCOE, offshore wind should
be a main pillar of tomorrow’s energy supply. ÉAl_]f]jYl]k[d]Yf
Hgo]jÌkNa[]Hj]ka\]fl^gj?dgZYdKljYl][email protected]_$]phdYafk
Source: Siemens
Case study
The <utch Jailways leverages “integrated proÔt and loss
statement to drive strategic decision-making“
The Dutch Railways (NS) carried out an analysis of their externalities
and shared value creation. Key impacts investigated included e,g,
environmental externalities, safety, social impacts including
mobility beneÕts and social value lost due to travelers waiting
time. The insights are improving internal decision- making and
strengthening reporting and dialogue with external stakeholders.
The Dutch Railways has used the analysis to support decisionmaking around risk mitigation to reduce their greenhouse gas
emissions supported by long-term contracts with utilities
providers. Another insight retrieved from the analysis is the
insight that about one-third of the negative social value created
occurs in “pre- and post-transportation.” NS, therefore, decides
to put more emphasis on door-to-door concepts to improve its
overall social impact.
| Total Value Impact valuation to support decision making
3. The Total Value
3.1 Introduction
Today, an increasing number of businesses are moving toward an integrated vision
of value creation, including the dimensions of shared value and externalities. In order
to achieve an integrated view of their impacts, organizations must Õrst be able to
measure the shared value and externalities they create. More recently, companies
have worked toward an environmental proÕt and loss (P&L), a social P&L or even
“integrated P&L” statements to do so.
EY developed the Total Value approach to address this need and aims to measure
the value that is created by the company, the value it shares with its stakeholders
and the broader impact it has on society at large. A Total Value analysis provides
insight in the monetized4 impacts, outcomes and their materiality.
Figure 2
Total Value created
Conceptual presentation of a Total Value analysis5
A Total Value analysis has a wide range of applications, ranging from an initial analysis
to assess an organization’s key impacts, to a more detailed analysis to, for instance,
assess the life cycle impacts of a product. While the Õrst may be used to deÕne the
organizations’ strategic focus, the latter may be used to innovate a product. These two
examples both have a distinctly different depth, scope and purpose. The commonality,
however, is that a Total Value analysis is designed to serve as decision support by
making transparent value creation, both for positive value creation and negative
value creation.
It is not the ultimate objective of a Total Value analysis to deliver a “lump sum” value
for Total Value itself. A quantitative analysis of the value creation in the different impact
categories provides insight in their individual magnitude and materiality. Hence, the
analysis provides a fundament to inform decision-making on how these impacts can
be inÖuenced. Caution is needed when adding up the different impact categories as
this could oversimplify issues and even blur the overall view. For instance, human
rights issues in an organization’s supply chain could never be “compensated” by the
purchase of CO2 rights.
4 Please refer to the special note on valuation and monetization, added at the end of chapter 4.
5 In this graph, the triple bottom line concept is used merely for simpliÕed presentation purposes. The concept could also
be explained along the dimension deÕned in the integrated reporting standard, using six forms of capital. In reality,
companies will use individual aspects such as water impacts, operational health and safety, and development of
intellectual property.
Total Value Impact valuation to support decision making |
3.2 Target users of a Total Value analysis
There are several anticipated users of a Total Value analysis. First of all,
the Total Value analysis will help companies’ decision-makers to take
better informed decisions on all levels (strategic, tactical or operational),
as it provides direction on how impact can be maximized and at which
trade-offs. It therefore helps decision-makers within the organization
build more future-proof businesses, and it helps innovators develop more
sustainable products.
Total Value analysis also fulÕlls informational needs for external
stakeholders. They, too, make decisions, for instance to buy a product
or to invest resources in a company. The types of decisions that
stakeholders make, and consequently the informational needs, vary
among different groups of stakeholders. For Total Value, three
categories of external stakeholders have been identiÕed, each with
their own speciÕc needs for information.
First, providers of Õnancial capital are an important group of external
stakeholders and advanced users of traditional sources of information,
i.e, the annual accounts. This makes investors a special group with distinct
needs, driven by the increasing awareness that various forms of capital
are not presented in the historic Õnancial information (as included in an
annual report). As a result, more and more integrated reports are being
released, including an “environmental,” “social” or “integrated” proÕt
and loss statement that includes disclosure of environmental and social
value creation. Total Value analysis reduces information asymmetry
and can be a powerful signal to investors.
Second, partners in the value chain, both upstream (suppliers) and
downstream (customers), have a distinct need for information.
Customers who want to understand how a product or service differentiates
from alternatives in the market in terms of value creation, beneÕt from
a Total Value analysis. For the company performing the analysis,
this means that Total Value can be a marketing tool, which enables
differentiating from competitors and signaling additional value.
Toward suppliers, it serves as a tool to make value beneÕts and costs
transparent. For example, it enables the fulÕllment of promises to
reduce their negative supply chain impacts, such as indirect greenhouse
gas emissions. A Total Value analysis provides the stepping stone to
the adoption of circular business models.
Finally, governments and civil society beneÕt from Total Value analyses,
as it helps them to better deÕne and implement effective public policies to
reduce environmental and social pressure . From a company perspective,
Total Value analysis can be a tool to assess possible legislative risk,
and to address possible pressure from action groups within society.
Furthermore, it serves as a powerful tool to gain and keep a societal
license to operate.
| Total Value Impact valuation to support decision making
Case study
Nestlé measures its integrated shared value creation
Nestlé’s business strategy is driven by the creation of shared value.
It states that the value generated by the organization not only
beneÕts shareholders but also the environment and society at large.
To act upon an integrated vision of sustainability that integrates
social, economic and environmental aspects into account, Nestlé
initiated the measurement of these impacts. Their analysis includes
various impacts, such as safety, rural development, carbon emissions
and water impacts. In the concluding remarks of the report, Nestlé
states that impact valuation enabled them to achieve the following:
1) to create a holistic vision of the shared value creation by Nestlé
2) to make the sustainability performance more intuitive and more
straightforward to communicate and 3) to set the right priorities in
follow-up actions.
Total Value beneÔts
BeneÔts of Total Value for:
The Total Value analysis:
Total Value supports:
Company’s decision-makers
IuantiÕes impacts, risks and
opportunities, including the
"levers of change“ for optimization
» Strategic decision-making to optimize
impact Product and service innovations
» Risk mitigation
Reveals quantitative insights
regarding externalities, shared
value and risks
» Investment decision-making
Value chain
Shows the opportunities for shared
value creation and potential for
circular business models
» Value chain transformations
» Customer buying decisions
Government and civil society
Reveals potential to internalize
externalities currently imposed
on society
» Public policy and decision-making process
Figure 3
Most important users of a Total Value analysis and their informational needs
We have a strategy update coming up and
expect to redeÕne our mission. Could you help
us to perform an initial and historic Total Value
analysis to feed our strategy update and help
implement metrics to measure progress on our
social mission periodically?
Our business balanced scorecard KPIs contain
mostly “activity” or “output” KPIs. Could you
help us to deÕne and implement “outcome”
KPIs enabling us to measure progress on our
social mission including the progress to the
Sustainable Development Goals?
We would like to disclose our progress on
the Sustainable Development Goals to our
stakeholders in our integrated report, including
assurance. Could you help us to measure our
most material shared value creation and
externalities and provide transparency to
our auditor?
Our project portfolio is complicated and
multidimensional, and we face limited resources.
Could you help us to assess the expected
environmental and social value creation of our
largest project to maximize the value creation
from our projects?
Total Value
Our clients ask us to prove the superior societal
beneÕts of our product. Could you help us to
measure the product’s social and environmental
value creation over its life cycle?
Lagging information
Figure 4
As a Õnancial institution, we would like to
incorporate environmental risk and socioeconomic beneÕts in our portfolio decisions.
Could you help us implement the right metrics
and criteria to establish this?
Leading information
Typical business needs addressed by a Total Value analysis
Total Value Impact valuation to support decision making |
4. The Total Value
Total Value provides a pragmatic seven-step approach to measuring and
valuing impacts. It builds upon existing knowledge and methodologies from
several Õelds and disciplines. For instance, to measure environmental
externalities, the EY Total Value approach would typically leverage
economic input/output modeling with life cycle assessment (LCA) and
available valuation approaches. Total Value should therefore be envisaged
as an approach that leverages available tools and techniques in an
integrated way.
Total Value aims to harmonize several principles and concepts common to
other standards such as the Global Reporting Initiative and social return on
investment. The key principles behind a Total Value analysis are:
œ Stakeholder inclusiveness — as a Total Value analysis measures
the impact of an organization on stakeholders, it is vital to involve the
stakeholders that are impacted
œ Materiality — a Total Value analysis should focus on “valuing the things
that matter” and therefore include the impacts that are most material
to the organization and its stakeholders
œ Transparency — transparent, auditable and reproducible analysis will
provide trust and usefulness in decision-making
œ Balanced view and fairness in attribution — a Total Value analysis should
include positive and negative aspects to prevent greenwashing and a
balanced view. A Total Value should not be used to, e.g., “over-claim“
social beneÕts or “under-claim” negative environmental externalities
œ Accuracy, reliability and timeliness — data sources of sufÕcient quality
should be used to provide the users of the Total Value analysis with high
quality results to enable proper decision-making
œ Consistency and comparability — a consistent approach to valuing
the various impacts is required to provide comparability. In other words,
a similar scope, boundaries and time horizon should be applied to the
various impacts whenever possible
Time is an important aspect in a Total Value analysis, as it can be used to
provide forward and backward looking (“lagging”) information. For instance,
a Total Value analysis could be used to assess if an organization’s policies
have been successful. In such an analysis, backward looking information
is used as “Ex-post” analysis. In an “Ex-ante” analysis, forward looking
(“leading information”) information — how much value is expected to be
created by means of, e.g., a policy — is used prior to taking measures in the
form of a scenario analysis or a business case. In an “Ex-Durante” analysis,
ongoing policies or measures are evaluated to assess if adaption or
adjustment is needed during execution. Typical examples of such analyses
are provided in Figure 4.
| Total Value Impact valuation to support decision making
Case study
Estimating the impact of direct, indirect and induced
A company’s employment impact is usually divided in several
1) direct (wages paid to employees),
2) indirect (wages paid to employees in a company’s supply chain),
3) induced (the economic leverage as a consequence of the
spending of wages by company or supply chain employees).
Although the direct impacts are well known to any company, the
indirect and induced employment impacts are more challenging.
These are most often estimated by means of economic input/output
models. Direct and induced employment effects are crucial to
assess a company’s role in the geographies in which it operates,
including the consequences of strategic decisions.
Total Value Impact valuation to support decision making |
Total Value in seven steps
The EY Total Value approach uses seven pragmatic steps towards measuring and
valuing impacts which are explained below in more detail.
Materiality analysis
First we determine the objective. Does it serve as input for discussion about
strategic repositioning? Or as an accelerator for innovation of products or
services? Or even to show “license to operate”? Should the analysis look
back or forward?
Assess which aspects are most material. Which form of capital is impacted
most? What are the boundaries of the impact? Given the objective of the
analysis, which impacts will be in scope?
Impact pathways
Qualitative mapping of key areas of impact, within the impact value chain
and capitals affected. This mapping follows the format of input – activity –
output – outcome – impact.
Measurement and valuation approach
Develop a model and establish what should be measured. Which are the
relevant performance indicators, and where does data come from?
What are possible limitations and estimations in the value creation model?
Data gathering and analysis
much the Total Value is. What are the interrelations between capitals?
How are different stakeholders affected? What is the impact on society?
What are the levers that can increase Total Value?
Assurance and communication
Third-party assurance can increase accuracy and credibility of the analysis.
Share the results both internally and externally, depending on the objective.
So what – action plan
plan to optimize and improve the company’s overall value creation.
Figure 5
Total Value approach in seven steps
| Total Value Impact valuation to support decision making
Step 1: Objective
Our approach starts with establishing a primary
focus. When starting the journey, it is important
to understand at which level and for which
purpose the analysis is performed. The object
of the analysis can be either be a project,
product or a portfolio of products, or it can be the company as a whole.
In the latter case, the focus is more strategic, where in the former the
focus is either more tactical or even operational. As explained in the
previous chapter, different stakeholder groups have different needs of
information for their decision-making. Establishing for whom the analysis
is performed is therefore a crucial step in the beginning of the process.
Step 2: Materiality analysis
As a Total Value analysis should focus on
“measuring and valuing the things that
matter,” a materiality analysis is crucial to
determine which aspects are to be included in
the analysis based on their (possible) impact.
In doing so, a reÕned scoping of impacts is completed, including areas
of impact that are explicitly excluded from the analysis. What started
as a preliminary idea at the start, becomes a clearly deÕned basis for
further quantitative analysis.
Step 3: Impact pathways
Each impact area needs to be described in more
detail to understand how the organization
creates value, positive or negative. EY uses
an impact pathway approach to qualitatively
describe the value creation process along the
various stages: input — activity — output — outcome — impact.
The description of the impact pathway will result in: how is the value
being created/annihilated and for/by whom? Which capitals are affected?
Stakeholder inputs are crucial to the impact pathway identiÕcation, as
stakeholders are the primary receivers of shared value and
externalities, whether intended or unintended. Within the EY Total
Value approach, stakeholders are closely involved in the deÕnition of
material aspects, as well as the deÕnition of the impact pathways.
It is vital to understand the difference between output, outcome and
impact. The output of an organization are its products and services, and
also any by-products and waste.
The waste and by-products are directly produced by the company’s
operations, and are therefore part of its output. Outcomes are the
internal and external consequences (positive and negative) for the
capitals as a result of an organization’s outputs. Impact is deÕned as the
portion of the total outcome that happened as a result of the activity of
an organization, hence that can be attributed above and beyond what
would have happened anyway. Referring to waste as an example: what
is waste for one company ideally becomes input for another, or even the
same, company. This re-use of waste is then one of the positive outcomes
of a company’s output. If this can be fully attributed, then that would
also be the impact. Another example is on a very different level, namely
outcome for human capital. A company conducting a major cost-cutting
exercise has a positive effect on the output of Õnancial capital. As an
outcome, it can have a negative outcome for human capital and a
negative attributable impact on societal value as a direct result of
reduced availability of employment.
Figure 6
Impact pathways
Case study
Using DALYs to measure and monetize indirect health & safety
The direct Õnancial impact of safety incidents within companies is
well known easily identiÕable for organizations. This includes e.g.,
costs for emergency response and loss of employee productivity.
The indirect impacts are more challenging. Recently, the DALY
concept has been used by several companies to measure and
monetize their indirect health and safety impacts on communities,
employees and customers. The WHO deÕnes the disability-adjusted
life year (DALY) as one lost year of “healthy” life. The sum of these
DALYs across the population, or the burden of disease, can be thought
of as a measurement of the gap between current health status and
an ideal health situation, where the entire population or workforce
lives to an advanced age, free of disease and disability. DALY studies
typically use “social weighting”,in which the value of each year of life
depends on age (by means of age-weighting or time-discounting).
Commonly, years lived as a young adult are valued more highly
than years spent as a young child or older adult, as these are years
of peak productivity.
Total Value Impact valuation to support decision making |
Step 4: Measurement and
valuation approach
As the connection between stakeholder and
value creation is now mainly understood
qualitatively, the next step is to deÕne an
approach to quantify these. Many questions
are still to be answered at this point: how can impacts or outcomes be
measured and valued to attain the objectives set? What should the detail
level of the analysis be? How can data be obtained and what are the
underlying assumptions of the measurement approach? What are the
relevant processes and controls to gather the data? What is the reliability
of the source data and is it “audit proof”?
Input/output model
Life cycle assessment (LCA)
Direct measurement
Statistics and general averages with high
modeling dependencies. Typically useful for
estimating indirect, induced and upstream
impacts at company level.
Hybrid measurement combines both general
and direct data. Typically useful for product
speciÕc impacts.
Direct measurement of outcome or impact
Estimation of indirect, induced and upstream
impacts at company level.
Estimating product speciÕc impacts across
the entire life cycle
Foot printing of own company operation
œ Ability to deÕne hotspots with limited effort
œ Can be enriched with LCA data for more
reÕned analysis
œ Allows for “fair” comparison between
companies/competitors on e.g., sector,
regional and national level, since same
datasets are used
œ Generic data on hotspots combined
with speciÕc data for comprehensive
understanding of challenges
œ Provides incentive for stakeholders/
competitors to provide more speciÕc
data for databases
œ Limited number of assumptions used
œ Reveals company-speciÕc focus points
œ Rich, reliable, custom data
œ Uses country and sector averages
œ Uses underlying assumptions and models
œ Labor intensive
œ Often limited scope (e.g., product speciÕc)
œ Labor intensive
œ Data security and transparency challenges
Upstream water consumption (by suppliers)
can be estimated by means of a spend
analysis combined with the use of I/O
databases and in combination with water
scarcity data to determine whether water
scarcity is a hotspot, and imposes a material
risks for the organization
A life cycle water footprint of a product can
typically be modeled with an LCA to assess
the life cycle water impacts in terms of water
use, quality, scarcity and pollution.
Use of direct measurements to quantify water
use (cubic meters), quality and pollution
(e.g., COD — chemical oxygen demand) and
scarcity, etc, of an organization
Induced and indirect employment impacts
of the company can be estimated by means
I/O models, such as GTAP, FMO, EORA,
EXIObase, WIOD, Eurostat, Standard
Chartered, etc.
Employment in the supply chain enabled
by your activities could be quantiÕed by the
number of employees divided by the share of
turnover your activities generate with those
Iuantify the amount and classiÕcation of
the employment directly derived from your
process or organization
Example 1:
water impacts
Example 2:
Figure 7
Several measurement approaches compared6
6 This overview provides three basic categories of approaches. Estimation, e.g., by means of
surveys to stakeholders, would typically be included in the category of “direct measurement”
A wide variety of measurement approaches can be distinguished.
Often “direct” data may be not available and hence models are used to
quantify impacts. For instance, if an organization attempts to estimate
its upstream employment effects, the tier-2 and tier-3 supplier data is
often not readily available. In that case, macro-modeling by means of
economic input-output models may provide a sufÕciently accurate
estimate. Each measurement approach has its own limitations, costs
and underlying expert judgment assumptions. Total Value aims
to align the approach carefully to the objectives of the analysis,
thereby making sure that costs and beneÕts of the overall analysis
are in balance.
| Total Value Impact valuation to support decision making
In parallel to the measurement approach, an approach needs to be
deÕned to value or monetize7 the outcomes or impacts. Analogous to the
measurement approach, no standards are readily available that provide
a rule-based approach. Good practices exist, however, that can be
leveraged. At the release date of this article, a Natural Capital Protocol
and a Social Capital Protocol are under development within the Natural
Capital Coalition and World Business Counsel for Sustainable Development,
respectively. Moreover, various sources for valuation proxies have been
made public and are available for use. The various approaches and
underlying data each have their limitations and drawbacks and are based
on assumptions. It is essential to assess the data quality and approaches
prior to applying them in practice.
It is not the objective of this article to explain the various valuation
approaches in much detail and therefore it only addresses several
highlights. Valuation of social and environmental externalities can roughly
be divided in various categories, including abatement costs, revealed
preference and stated preference approaches. Revealed preference is
based on standard market good valuation applied to nonmarket goods by
means of hedonic pricing (related asset valuation such as house market
prices) and travel cost methods. In contrast, a stated preference approach
elicits individual valuations through stakeholder surveys by asking their
willingness to pay for a certain outcome. Revealed preference approaches
primarily allows to measure the value of consumptive uses, while stated
preference approaches generally allow us to measure the value of
non-consumptive uses by means of data gathered through surveys.
More details on the various valuation techniques, including several
examples, are provided in Figure 8.
Most of the valuation techniques are complementary, so they can be
combined to obtain more accurate results.
Examples of valuation approaches
Abatement costs – the costs
associated with limitation, prevention
or repair of impacts (mostly used for
environmental impacts)
TruCost estimates the ‘social cost of carbon’ by monetizing the damages associated
with an incremental increase in greenhouse gas (GHG) emissions in a given year.
Contingent valuation – survey
based approach to value nonmarket
A contingent valuation approach was used to estimate consumer willingness to pay
for food safety health outcomes. It is estimated that there are about a million cases of
foodborne disease (FBD) in the UK each year, resulting in 20,000 hospital admissions
and 500 deaths. Most of this illness is caused by microbial pathogens such as viruses
and bacteria. The objective of this was to estimate this cost, i.e., to estimate the
willingness to pay (WTP) to avoid pain, grief and suffering associated with illness and/or
death caused by microbiological pathogens, chemical and radiological contaminants
and allergens.
Kgmj[]2;gfkme]joaddaf_f]kklghYq^gj^gg\kY^]lq`]Ydl`gml[ge]k$A;>[email protected]*()+
Hedonic pricing – indirect approach
to value nonmarket resources by
means of (related) asset valuation,
such as house prices
A hedonic pricing model was used to estimate the “added value of cultural heritage”
for a speciÕc Dutch location (case study Tieler-en Culemborgerwaard). House prices
were used as a basis for the analysis. The valuation study was used to determine the
course of action for investment in this site.
Travel cost – willingness to pay (WTP)
approach – the costs is the WTP to
access a certain location
The Dutch Railways used the travel cost method to assess their value creation for
travelers. As a basis, they used the WTP data from the “Knowledge Institute for
Mobility Policy” in the Netherlands.
Figure 8
Several valuation approaches compared
7 Please refer to the special note on valuation and monetization added at the end of this chapter.
Total Value Impact valuation to support decision making |
Step 5: Data gathering
and analysis
A Total Value analysis requires extensive
amounts of data to be gathered. This includes,
e.g., supplier data, product use data and data
from global manufacturing operations.
Subsequently, data processing and analysis is needed to perform the
impact valuation itself. This is the step “where the rubber meets the
road,” as it provides the real insights into the quantiÕed value creation
aspects and how they interrelate to each other. The most important
questions to be answered at this point are to establish if the rationale
behind the results is understood: are the identiÕed hotspots in line
with expectations and the materiality assessments? How should the
detailed results be interpreted and are these understood by stakeholders?
Step 6: Assurance and
Case study
FMO includes GHGs and employment in their investment
portfolio decision-making
FMO invests with the goal of having broad economic, social,
environmental and governance impact. Measuring and tracking
this development impact is part of our service. FMO considers
expected ESG impact from Õrst investment screening, working
with the borrowers and investee companies to identify criteria and
deÕne action plans to optimize this impact, closely monitoring
the progress and offering support when needed. Sustrack, FMO’s
proprietary monitoring system that tracks its clients’ progress in
the deÕned action plans, is an effective tool in the result-driven
pragmatic approach to ESG. After Õve years, or upon program
exit, impact is evaluated — assessing the business success of the
project or company, but also the extent of impact it has made
on the local economy, community and environment.
In many cases, a Total Value may be used
to communicate to internal and external
stakeholders, as the analysis reveals the
magnitude of the externalities or shared
value exposed to them. Hence, it is important that the presented data
is reliable and free of material misstatements. An enabler to achieve
robust results is assurance, whether internal or external by an
independent third party. Transparency about the methods used,
calculations performed, limitations, expert judgments and an
independent assurance report are important enablers in the presentation
of a Total Value analysis.
| Total Value Impact valuation to support decision making
Step 7: So what - action plan
Having a robust Total Value analysis available
at hand is a Õrst milestone in itself, but its Õnal
purpose is that it leads to action: Total Value
analysis is performed to enable informed
decision-making. For instance, now that the
magnitude of several negative impacts is known, are these impacts
likely to be internalized (e.g., through carbon pricing)? What “levers of
change” can the organization use to strengthen the organizations’
future business? Now that the organization knows its key material
issues in more detail, how can it change its business to deliver more
value to stakeholders?
The second aspect that a Total Value analysis covers in this step would
include “next steps” for the analysis itself. With the results and their
implications available at hand, organizations typically decide to reÕne
the analysis by including new (material) aspects or adding more detail
to the analysis, for instance. While an initial analysis often serves as
a hotspot analysis, subsequent analyses often have reÕned business
purposes with the objective to better informed business decisions.
Business value of the analysis
Total Value analysis
œ Limited scope and number of impacts
œ Serves as hotspot analysis
œ Mostly based on macromodels
œ Targeted and limited use for decision-making
œ Includes all material impacts
œ Covers entire value chain and stakeholder groups
œ Detailed and elaborate
œ Limited number of assumptions
œ Wide application for decision-making
Figure 9
Business value of the Total Value analysis over time
Total Value Impact valuation to support decision making |
Special note
Is measurement the same as valuation? And is valuation the same as monetization?
Different words are in use around the topic of analyzing impact, which could lead to confusion among users
of information. What adds to even more confusion is that there is no standardized way yet to assess impact.
We can be short in answering the two questions posed in the title of this note: no and no. Measurement is
not the same as valuation, and valuation is not necessarily monetization.
Measurement is a prerequisite for valuation. Measurement is nothing more and nothing less than actually
gathering raw data. This data takes different forms for different types of capital. Financial capital is expressed
in monetary terms, manufactured capital can be expressed in units or weight and human capital-related
metrics can be number of people, but also numbers of occupational accidents and employee satisfaction
scores. Valuation is the next step, in which all data is expressed in common terms to make them comparable.
A possibility is the use of ratings on a scale or benchmarking against a target. Many board reports that are
used internally in organizations take this form: ratings and benchmarks against a target occur frequently
in board reports.
Monetization is a special type of valuation, one all companies already perform for manufactured capital.
For manufactured capital, which is stored as inventory, this is an exercise that is performed — and required —
in traditional accounting. Inventory on the balance sheet is not expressed in units, weight or hours, but in
monetary terms. Several methods exist: when reporting under US GAAP, LIFO is a popular method, whereas
under IFRS this is not allowed and the FIFO method is dominant. For other types of nonÕnancial capital,
monetization is a rather new concept, and one that is not subject to regulation.
The current consensus is to express value in monetary terms. Given the sole focus on Õnancial value in
traditional accounting, this is logical. To assess the Total Value of a company, it could be a beneÕcial exercise
to monetize not only Õnancial and manufactured capital, but all forms. Monetizing enables reporting on
an environmental or social proÕt and loss account, and it is a metric that is widely understood.
Caution is necessary, however, as there are drawbacks on monetizing. As a Õrst criticism, it seems to
prioritize Õnancial capital over all other capitals. Depending on the stakeholder that is being reported to,
this could prove useful or extremely silly. Investors could beneÕt from monetization, as does management
to a certain extent. But authorities for occupational safety are not interested in a monetized report on
employee safety, but require actual safety Õgures in number of incidents.
Second, as with a traditional monetization exercise like the inventory valuation, the assumptions and
reporting principles are very important and have to be disclosed. Every Õnancial analyst knows that proÕts
of American and European companies can differ solely due to different inventory valuation systems, all
other performances being equal.
As a third precaution, monetization can cover up actual bad performance by apportioning a low conversion
factor to certain negative outcomes and therefore facilitate greenwashing. Solely managing on monetized
data can actually give perverse incentives and lead to ‘“devilish tradeoffs”: less pollution vs. more fatalities,
for example, could yield the same aggregate monetized value. Moreover, one could also pose the question
if ethical barriers are crossed when monetizing e.g., fatal accidents or child labor.
Concluding, monetization is regarded as a useful exercise to compare the impact of different forms of capital.
However, the assumptions and underlying models used are important and have a determining effect on
the outcome, just as inventory valuation methods have in traditional accounting. Monetization can be a
powerful tool, but one that should be managed sensibly and with caution.
| Total Value Impact valuation to support decision making
5. Total Value and
the Sustainable
The Sustainable Development Goals (SDGs) deÕne global priorities and aspirations
for 2030 and call for worldwide action among governments, civil society and
business to address the world’s biggest sustainable development challenges. As per
today, more and more companies disclose information about their contribution to
the SDGs as businesses fulÕll their societal role to resolve pressing social and
environmental issues. Moreover, global efforts from governments in achieving the
SDGs, such as introducing taxes and other pricing mechanisms, are expected to
internalize costs that are currently external. Hence, contributing negatively to the
SDGs may therefore become Õnancially undesirable in the mid or longer term.
Total Value Impact valuation to support decision making |
The EY Total Value approach Õts seamlessly with the development of a strategy in attaining the SDGs.
Especially when it comes to identifying in what way the company adds to the goals, and to identify how to
measure the progress towards the goals, the EY Total Value approach proves to be pertinent. The results
of the Total Value analysis serve as input for well informed strategic decision making and stakeholder
communication. Integrating the SDGs in the core business and into the reporting cycle will enable companies
to focus on creating visible shared value. The Õgure below explains in more detail how the SDGs can be
incorporated in the EY Total Value approach.
First we determine the objective. Does it serve as input for
discussion about strategic repositioning? Or as an accelerator
for innovation of products or services? Or even to show “license
to operate”? Should the analysis look back or forward?
Materiality analysis
Assess which aspects are most material. Which form of capital is
impacted most? What are the boundaries of the impact? Given
the objective of the analysis, which impacts will be in scope?
Impact pathways
Qualitative mapping of key areas of impact, within the impact
value chain and capitals affected. Thismapping follows the
format of afhmlÇY[lanalqÇgmlhmlÇgml[ge]ÇaehY[l.
Measurement and valuation approach
Develop a model and establish what should be measured.
Which are the relevant performance indicators, and where
does data come from? What are possible limitations and
estimations in the value creation model?
When starting the journey, it is important to determine why
the SDGs matter to your organization.
To seize business opportunities and reduce risks companies
should focus on the most material SDGs. Mapping current
and potential high impact areas (positive as well as negative)
will enable organizations to determine on which issues to
Once the SDG impact areas have been deÕned, the next
step is to understand which business activities most
effectively contribute to the SDGs. Our approach using
Impact pathways’ will provide insight in the relation between
activities and impact
Setting the right Key Performance Indicators (KPIs) is crucial
for the measurement and valuation of SDG contributions.
The UN has identiÕed over 500 universal indicators to
measure and monitor progress against the SDGs.
Data gathering and analysis
Gather data and execute modeling. Analyze the results and Õnd
out how much the Total Value is. What are the interrelations
between capitals? How are different stakeholders affected?
What is the impact on society? What are the levers that can
increase Total Value?
Assurance and communication
Third-party assurance can increase accuracy and credibility of
the analysis. Share the results both internally and externally,
depending on the objective.
So what – action plan
Understand levers of change to further optimize impacts.
DeÕne action plan to optimize and improve the company’s
overall value creation.
| Total Value Impact valuation to support decision making
To perform an SDG Impact analysis, data is gathered
from various sources in the business. Subsequently, data
modelling takes place to quantify SDG impact.
The SDGs provide a common language for sustainable
development reporting, and enable comparison between
organizations. Internally, communicating the impact on
SDGs can be an effective tool to embed the corporate
strategy in the organization.
Results of the Total Value analyses lead to better informed
business decisions. Integrating the SDGs into the core
business, embedding targets across functions and setting up
partnerships across the value chain is fundamental towards
reaching the common goals on the global agenda.
External Reporting on the Sustainable
Development Goals
Particularly large multinational corporations
have publicly adopted the Sustainable
Development Goals and are reporting on their
progress. More speciÕcally, companies in food &
beverage, manufacturing and Õnancial sector
have started to align their (sustainability)
strategies and policies with the SDGs.
Some selected the applicable SDGs based on
their existing corporate (sustainability) strategy
(i.e. Unilever, Nestlé, Philips and Heineken)
and others reviewed their existing strategies
and materiality analysis based on the SDGs
(SABMiller). Fully integrating the SDGs in
corporate strategies - instead of taking a stand
alone SDG approach - enables companies to
contributing to the global agenda with their
core business activities.
There is no harmonized reporting standard
available yet. Companies can announce goals
aligned with the SDGs on the United Nations
website, use existing reporting formats and
communications, or prepare a more concise
stand-alone report or communication. Hence,
even though the SDGs provide a common
language for sustainable development reporting,
there is great variety in practice. For instance
Heineken, SABMiller, Coca Cola and Philips
published infographics that visualise the
alignment between the corporate strategy
and the SDGs. A few companies solely state
that they are committed to the SDGs, yet do
not explicitly translate these into corporate
performance targets. Some issued a separate
SDG position paper (i.e. Novo Nordisk) and
others have included their SDG statements and
partnerships in their annual external reporting.
Sometimes case studies are used per SDG to
illustrate the company’s performance. For
instance, Credit Suisse shows how its activities
contribute to the realization of the respective
SDG, and describe the measurable impact that
can thereby be achieved.
Total Value Impact valuation to support decision making |
6. Total Value and
A Total Value analysis, an enabler for change, requires change management in itself,
as the analysis may have strategic implications. Hence, to reap the beneÕts of a
Total Value analysis, stakeholders should be mobilized to ensure that objectives,
results and their implications are aligned throughout the process. Within Total Value,
and aligned to a recent publication from De Groene Zaak on social value creation,
the following good practices are taken into account to manage change:
œ Start Êsmall’
An initial analysis starts with a limited scope
and capitalizes on the valuable outcomes.
This will build momentum and leverage for
future expansion. As outlined in the previous
paragraph, a future analysis may be performed
with additional depth or an expansion of scope.
œ Manage expectations
Clarify the scope, objectives and boundaries of
the project, so everyone involved has an idea of
what to expect. Share what you know and what
you do not know. Always be transparent about
estimations and assumptions in the model.
œ Create internal support
Identify the most important internal stakeholders
and communicate what’s in it for them and
involve them in setting the objective. This might
differ between the CEO and the HR manager,
for instance. “If you want to go fast, go alone.
If you want to go far, go together.”
œ Find partners
The trajectory will be easier with allies and
partners that have experience in measuring
| Total Value Impact valuation to support decision making
7. How EY can help
EY has helped numerous organizations to kick start, execute
or assure their Total Value analysis. We combine the following strengths:
œ EY is closely involved in the deÕnition of the Natural Capital Protocol, in close
cooperation with the Natural Capital Coalition (NCC)
œ EY is closely involved in the deÕnition of the Social Capital Protocol, in cooperation
with the World Business Council for Development (WBCSD)
œ EY has leading expertise in the execution of advanced data analytics of large
amounts and complex data including the synthesis of conclusions
œ EY has in-depth expertise of life cycle assessments, input/output modeling and
œ EY has a close cooperation with TruCost on natural capital — TruCost has a unique
natural capital database and valuation expertise that can be leveraged on client
œ EY can bring the experience of Total Value engagements that were performed for
several clients in various sectors. We will be happy to provide you with more
details to reveal our in-depth experience
Contact & co-author information
Roel Drost
(primary contact and lead author)
Guido Moret
Franc van den Berg
(Climate Change and Sustainability Services leader Netherlands)
Valuable contributions from: Marloes Vierkant, Leonoor den Ottolander,
Arno Scheepens, Alexander van der Flier, Roy Linthorst, Dirk-Jan Everts,
Stefan van Sabben, and Remco Bleijs
Total Value Impact valuation to support decision making |
DeÕnitions used
in this paper
References in
chronological order
œ Measurement, valuation and monetization — see “special note”
section of this paper (at the end of chapter 4)
œ ”The problem of social costs,”
R. Coase, Journal of Law &
Economics, 1960
œ “Planetary Boundaries: exploring the safe operating space
for humanity,”
Rockström et al., 2009
œ “An intellectual history of environmental economics,”
D. Pearce, annual review of energy and the environment,
27, 57-81, 2002
œ “Creating shared value,”
Porter & Kramer, Harvard Business Review, 2011
œ “A guide to social return on investment,”
The SROI network, 2012
œ “Natural capital at risk, the 1(( externalities of business,”
The Economics of Environment & Biodiversity (TEEB), 2013
œ “The international 4IR6 framework,”
The International Integrated Reporting Council, 2013
œ “Natural and social capital accounting, an introduction
for Ônance teams,”
Accounting for Sustainability, 2013
œ “Measuring socioeconomic impact Ç A WBCSD guide for business,”
World Business Councilfor Sustainable Development, 2013
œ “Meatonomics”,
John Robbins, 2013
œ “Better safety in Bangladesh could raise clothing prices
by about 25 cents,”
The Atlantic, 2013
œ “Methodology report for Novo Nordisk’s environmental
proÔt and loss account,”
Danish Ministry of the Environment, 2014
œ “SCOE Ç Society’s costs of electricity: How society should Ônd
its optimal energy mix,”
Siemens, 2014
œ “FMO impact model,”
Entrepreneurial Development Bank (FMO), 2014
œ “NS jaarverslag 2(14,”
NS, 2015
œ “TruCost’s valuation methodology,”
TruCost, 2015
œ “Measuring value Ç towards new metrics and methods,”
Quantis, Ageco and Nestlé, 2015
œ “The business case for true pricing”
Deloitte, EY, PwC and True Price, 2015
œ “Social Value Creation,”
De Groene Zaak, 2015
œ “Natural Capital Protocol”
Draft version, Natural Capital Coalition, 2015; latest version available
œ “SDG Compass. The guide for business action on the SDGs”
- World Business Council for Sustainable Development, GRI and
UN Global Compact, 2015
œ Impact pathways — The process through which outcomes and impacts
are created. It includes inputs, activities, outputs, outcomes and impacts.
œ Input — The resources required to carry out an activity such as
money, materials, water used, etc.
œ Activity — Company activities to operate a business that drive
positive or negative value creation, such as employee training and
manufacturing of products.
œ Output — The direct result of activities such as greenhouse gas
(GHG) emissions.
œ Outcome — The changes in the conditions of a population or an
ecosystem, e.g., climate change or living conditions.
œ Impact — The portion of the total outcome affecting human well-being
or ecosystem that can be attributed to the company.
œ Externality — The cost or beneÕt that affects a party who did not
choose to incur that cost or beneÕt.
œ Shared value — A cost or a beneÕt to a company’s stakeholders,
such as suppliers, customers or local communities.
œ Internalization — The process by which the externality costs or beneÕts
become a private cost or beneÕt to an organization. Internalization can
occur through regulation, taxation, scarcity or consumer preferences.
Note that internalization means that an organization pays for the
societal costs; but it does not necessarily mean that the damage is
resolved. For instance, a carbon tax does not mean that carbon impacts
are reduced.
œ Life cycle assessment (LCA) — A technique to measure and evaluate
the environmental and or social impacts of a product or service system
through all stages of its life cycle.
œ Materiality — Materiality is a common term used by auditors. It deÕnes
the threshold or cutoff point after which Õnancial (and nonÕnancial)
information becomes relevant to the decision-making needs of the
users. Users could include various stakeholders, including investors.
œ InputÇoutput (I/O) — A matrix of raw economic data collected by
companies and governments to study the relationships between
suppliers and producers and the economic impact of the import or
export producer goods to meet consumer demand. I/O modeling is
used by economists for economic macro analysis and more recently
also to assess environmental and socio-economic impacts.
| Total Value Impact valuation to support decision making
example case studies
Key data
œ Disability-Adjusted Life
Years (DALY)
œ World Health Organisation
œ Nr. of accidents
œ Type of accident
œ Age
œ Income
œ Land use
œ Ecosystem quality
œ Change in Biodiversity
Novo Nordisk
œ Fossil fuel energy consumption
and other emission sources of
own operations and supply chain.
Biodiversity œ Natural Capital Accounting œ Natural Capital Protocol
œ Ecosystem Valuation
œ Life-Cycle Assessment
œ Prevention based:
Eco-costs Model
œ The Economics of Ecosystems
and Biodiversity
œ US Department of Agriculture Natural
Resources Conservation Service
and National Oceanographic and
Atmospheric Administration
œ Delft University of Technology
œ Damage based: Social
Costs of Carbon
œ Marginal Abatement
based: MACC
œ Life-Cycle Assessment
œ Prevention based:
Eco-costs Model
œ World Resources Institute / World
Business Council for Sustainable
Development: GHG-protocol
œ Carbon Disclosure Project (CDP)
œ Environmental Protection Agency Social Costs of Carbon
œ CE Delft - Shadow Prices Handbook
œ Input/Output Modelling
œ Life-Cycle Assessment
œ Wastewater treatment
cost/m3 * m3
œ World Business Council for Sustainable IKEA
Employment œ Job years: equivalent
of 1 FTE in 1 year per
€ invested
Skills and
œ Expected future earnings
increase per stakeholder
due to training
œ Monetary value of quality
of life improvements
œ Water scarcity
œ Water pollution
œ Water use
œ Waste water treatment costs
œ World Business Council for Sustainable Lafarge Holcim œ Nr. of direct jobs created/lost
œ Type of direct created/lost jobs
œ PaciÕc Community Ventures InSight
œ Nr. of indirect jobs created/lost
œ Type of indirect created/lost jobs
œ World Business Council for Sustainable EY NL 2016 Development
Annual Report
œ Organization for Economic
Co-operation and Development
œ International Journal of Economics
and Management Sciences
œ Centraal Planbureau (NL)
œ Payroll data
œ Nr. Of FTE’s
œ Nr. of hours spent on speciÕc
types of training/skills,
œ Expenditures on education
Total Value Impact valuation to support decision making |
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