'Standardized ESG performance measurement crucial': VBA CEO

Christian Heller, CEO of Europe-based non-profit organization Value Balancing Alliance, speaks in a video message during the 2021 Korea Times Global ESG Forum themed “Global Investors' ESG Proposals” at the Korea Chamber of Commerce and Industry (KCCI) building in Seoul, Friday. Captured screen image

By Yi Whan-woo

Standardized measurement of environmental, social and corporate governance (ESG) performance at a global scale is becoming increasingly important for the accurate and transparent valuation of companies rushing to join the ESG bandwagon, Value Balancing Alliance (VBA) CEO Christian Heller said, Friday.

In a video message during the 2021 Korea Times Global ESG Forum themed “Global Investors' ESG Proposals” at the Korea Chamber of Commerce and Industry (KCCI) building, the CEO highlighted VBA as a group of mostly international companies and that such trait can help accelerate developing and testing methods for the standardized accounting of corporate value.

Founded in 2019 by German multinational chemical company BASF, VBA members in Asia include SK Group and Shinhan Financial Group.

Heller headed BASF's Value-to-Society program that has inspired VBA.

“It's all about an inclusive and sustainable economy,” he said, noting the government agendas of the government as well as regional and international organizations have been focused on disclosure of ESG performance.

“We also need to think ― how do we measure success and performance of a company?” Heller said, adding such measurement should center on defining corporate value and impact of business models on societies, the economy and the environment.

He accordingly listed out three steps: Developing and testing methodologies and standardizing them on a global scale.

“It's providing much, much better information with regard to risk exposure and risk management, but also business opportunities,” he said. “So for companies, it should be the direction of travel to assess their overall impact and to understand how this is affecting the value of an enterprise.”

A Germany-based non-profit organization, VBA counts more than 20 companies as members, plus the OECD, Oxford University, Harvard Business School, governments and standard-setting bodies as stakeholders.

The CEO called for international participation, pointing out the contributions from SK Group and Shinhan Financial Group have been considerable.

“You all know about SK's Double Bottom Line principles,” he said, referring to the Korean conglomerate's philosophy of co-prosperity by boosting both economic and social value in every business.

Regarding Shinhan Financial Group, a major banking group here, Heller pointed out it has been the first financial company in Asia to work with VBA on a net-zero campaign.

“We are a global movement and I just can encourage you to join in because businesses need to provide solutions at global scale,” he said. “It does not make sense that we are working separately in countries or in sectors.”