Value Commission - Draft Transparency Criteria Consultation

2 August 2023 

Today, Capitals Coalition has published the first draft of the new Transparency Criteria developed by The Value Commission. The criteria are now available for a public consultation that will run between 2 August – 20 October 2023. Once feedback from the public consultation has been collated, a final version of the Transparency Criteria will be published in January 2024. 

If you have any further questions, please don't hesitate to get in touch with us contact us on info@capitalscoalition.org 

Information for Public Consultation

Instructions to reviewers

The Coalition is using the platform ScribeHub to collect insights, comments, and suggestions on the draft Transparency Criteria.

You will be asked to register on ScribeHub by providing your name, email address and creating a password. You will then be sent a confirmation email where you will need to click on the "confirm my account" link in the email to be redirected to the login screen.

If you are already registered on ScribeHub please sign in (top right corner) before accessing the document and commenting.

Please note that Capitals Coalition will only use your name and email address for internal purposes of recording participants of the consultation and providing further information about this consultation. Your personal information will be held in line with our privacy policy.

If you would like to be informed of the progress of this project beyond this consultation, please sign up to our newsletter through this LINK and indicate your interest in this project. 

You can provide feedback on the criteria by:

• Responding to the survey: You can access the survey on the right of this page to provide feedback on key themes that cover the criteria, as well as a few specific elements of the criteria structure and purpose.
• Providing comments directly on the criteria: You are also invited to include comments at the level of individual criteria and the accompanying binary question. We encourage reviewers to comment on the usefulness of the criteria, their structure, as well as the clarity of the definitions. If you want to provide comments, click on New Comment on the right-hand side of each section heading. 

Participating in the consultation is on an individual basis (i.e., more than one person per organization may register). You can therefore choose to respond personally or on behalf of your organization. 

The consultation is open until 20 October 2023. We thank you in advance for providing your feedback.

Acknowledgements

Authored by The Value Commission and the Co-Chairs with the support of the Coalition facilitation team.The full list of the Commissioners can be found here.

Summary of The Value Commission and why Transparency Criteria are needed

What is The Value Commission? 

The Value Commission is a time-bound three-year collaborative project hosted by Capitals Coalition which brings together expert Commissioners from around the world to drive transparency and accountability across the application and use of ‘value factors’ by organizations. 

The Commission is co-designing and developing a set of clear and transparent global criteria for creating and using value factors and consolidating existing efforts into an open-access platform.

What is a value factor, and who uses them?

A value factor enables businesses to translate the information that they collect across their operations into insights on the value of their impacts and dependencies across natural, social and human capital. 

Using these value factors, organizations can turn data into actionable insights that allow them to see the bigger picture of their operations and supply chains and enable them to make better informed decisions that deliver value across the capitals.  

Value factors have long been used to help organizations extrapolate the value that is created or eroded based on a decision they make. For example, when evaluating a decision that emits one tonne of carbon, using a value factor (e.g., $185 social cost per tonnes of carbon) allows organizations to better calculate the associated health impacts and broader social cost. By using the value factor as a multiplier, they can gain valuable context (e.g., 50 tonnes of carbon x $185 = $9250 social cost). This approach supports better informed decisions and in this example, a clearer understanding of impact and how to mitigate it.

But this information is only as accurate as the value factor that is used to generate it. To ensure that decisions are taken based on the most accurate information available we need to ensure that value factors are credible and that the methodologies used to create and apply them are clear and transparent.  

Why are the Transparency Criteria needed? 

Value factors have the potential to be transformative, but currently there is little transparency, accountability, or consistency in the way that these factors are developed and applied. The process used to calculate and implement them can be proprietary and opaque, and therefore confidence in results can vary significantly.  

This lack of consistency creates a significant barrier to system-wide uptake. 

By bringing together the key providers and developers of value factors from across the globe, The Value Commission aims to harmonize this space by co-designing and developing clear and transparent global criteria to govern the creation and application of value factors worldwide. 

The Transparency Criteria aims to enhance the use of value factors by bringing more transparency and increasing the confidence of decision makers on estimations of value created, preserved and eroded for nature and people.

Introduction to the draft Transparency Criteria 

What are the Transparency Criteria? 

The Transparency Criteria are a detailed set of standards that can be used to improve user confidence in the application of a value factor. The criteria serve as a method to improve the flow of information between developers, users and stakeholders. 

This transparency may be related to the scope of the decision they intend to inform, the methodologies used to create them, or the level of detail included in source data used to develop the factors, as well as how justice, equity, diversity, and inclusion were considered in their development. There are currently 53 criteria drafted around these and other broad themes. 

How were the draft Transparency Criteria developed? 

The draft transparency criteria have been developed through a collaborative process of multiple rounds of feedback and discussions with The Value Commissioners since it was set up in Oct 2022. 

The next steps after this public consultation 

This online consultation platform is part of a wider engagement effort to receive input from stakeholders, which also includes piloting and consultative roundtables. 

• The piloting will run through September and October 2023, where volunteer organizations can apply the draft Transparency Criteria to how they use value factors to support their decision-making processes. Please contact stephany.breytenbach@capitalscoalition.org if you would like to volunteer to pilot the draft Transparency Criteria. More details about the piloting requirements can be found here.
• Consultative roundtables will be held on 5 October 2023, where the team will coordinate smaller group discussions around specific aspects of the Transparency Criteria and their usefulness in decision making. If you are interested in joining the roundtable please register through the links below. There are two options for the roundtables to cover different time zones; 

Thursday, 5 October, 09:00 – 10:00 GMT registration link here 

Thursday, 5 October, 18:00 – 19:00 GMT registration link here

We welcome the participation of any organization or individual in the consultation with an interest in the work of The Value Commission or an interest in decisions taken based on value factors. 

Following this public consultation, we will incorporate the feedback received by stakeholders and prepare the final draft of the criteria with the aim to launch the Transparency Criteria in January 2024. The next stage of The Value Commission will be focused on delivering thean open-access platform of value factors by the end of 2025. 

Key Definitions 

Value - Value is defined as the importance, worth, or usefulness of something. While in financial accounting terms, valuation is understood to mean monetization, value can come in various forms, many of which are intangible. This value can have economic, social, environmental, cultural, or spiritual aspects and can be expressed in qualitative, quantitative, or monetary terms. 

Valuation - Valuation is the anthropocentric process of estimating the relative importance, worth, or usefulness of natural, social, human, and/or produced capitals directly or indirectly experienced by people (or by a business) in a particular context. Valuation may involve using qualitative, quantitative, or monetary approaches or a combination of these. 

• Qualitative valuation describes the relative importance of the impacts and/or dependencies on natural, social, human, or produced capital and may rank them into categories such as high, medium, or low.
• Quantitative valuation uses non-monetary units such as numbers (e.g., in a composite index), areas, mass, or volume to assess the relative importance of impacts and/or dependencies on natural, social, human, or produced capital.
• Monetary valuation uses money (e.g. $, €, ¥) as the common unit to assess value.

The draft Transparency Criteria

Please find below the longlist of draft criteria separated into sections. A binary question accompanies each criterion, and a definition is also provided where needed. When using the transparency criteria, a user will select a single value factor they wish to assess the transparency of and run through the binary questions to gather insight into the underlying information of the value factor. When assessing a value factor, information is said to be ‘clearly stated’ if the relevant data/information is explicitly expressed or readily observable, leaving nothing to interpretation. 

Please note that the criteria have not been ranked or prioritized. Rather, a ‘Tiered’ structure has been used to organize the criteria. This Tiered structure has three levels. Tier 1 provides the building blocks related to Transparency in valuation. The subsequent Tiers represent further detailed aspects within the building blocks of Tier 1.  

The list of criteria under Tier 1 includes the following aspects:  

• Scope  
• Justice, equity, diversity, and inclusion considerations 
• Impacts and dependencies  
• Data sources 
• Methodologies used  
• Controls and assurance 

A visual representation of the Tier 1 criteria can be seen in the image below. 

Figure 1: Visual representation of the Transparency Criteria, Tier 1. 

Scope

The list of criteria under ‘Scope’ includes the following:  

• The decision to be informed 
• The objective behind the decision 
• The change in stock or flow being valued 
• Assumptions of the value factor 
• Definitions of key terms 
• Limitations & omissions 
• Geographic context 
• Cultural context 
• Temporal boundary 
• The impact or dependency pathway
  • The causality of the impact or dependency pathway 

Figure 2: Visual representation of the ‘Scope’ Tier 1 criteria and the subsequent Tier 2 & 3 criteria.

#1 Scope of the Value Factor

#2 The decision to be informed

#3 The objective behind the decision

#4 The change in stock or flow being valued

#5 Assumptions of the value factor

#6 Definitions of key terms

#7 Limitations & omissions

#8 Geographic context

#9 Cultural context

#10 Temporal boundary

#11 The impact or dependency pathway

#12 The causality of the impact or dependency pathway

Stakeholder perspectives included

The list of Criteria under ‘Stakeholder perspectives included’ includes the following:  

• Cultural context of stakeholders 
• Geographic context of stakeholders 
• Time preferences 
• Stakeholders affected 
• Characteristics of stakeholder groups 
• Value perspective 
• Process for including the perspective of those affected 

Figure 3: Visual representation of the ‘Stakeholder perspectives included’ Tier 1 criteria and the subsequent Tier 2 & 3 criteria.

#13 Stakeholder perspectives included

#14 Cultural context of stakeholders

#15 Geographic context of stakeholders

#16 Time preferences

#17 Stakeholders affected 

#18 Characteristics of stakeholder groups

#19 Value perspective

#20 Process for including the perspective of those affected

Justice, equity, diversity, and inclusion considerations

The list of Criteria under ‘justice, equity, diversity, and inclusion considerations’ includes the following:  

• Justice considerations in value factor development 
• Equity considerations in value factor development 
• Diversity considerations in value factor development 
• Inclusion considerations in value factor development 
• Justice, Equity, Diversity, and Inclusion integration 

Figure 4: Visual representation of the ‘Justice, Equity, Diversity, and Inclusion considerations’ Tier 1 criteria and the subsequent Tier 2 & 3 criteria.

#21 Justice, equity, diversity, and inclusion considerations

#22 Justice considerations in value factor development

#23 Equity considerations in value factor development

#24 Diversity considerations in value factor development

#25 Justice considerations in value factor development

#26 Justice, Equity, Diversity, and Inclusion integration

Impacts and dependencies

The list of Criteria under ‘impacts and dependencies’ includes the following:  

• Other impacts experienced by stakeholders 
• Baseline of change 
• Type of change 
• Scale of change 
• Degree of change 
• Indicators 
• Level of uncertainty 
• Duration of change 
• Property rights 

Figure 5: Visual representation of the ‘Impacts and dependencies’ Tier 1 criteria and the subsequent Tier 2 & 3 criteria.

#27 Impacts and dependencies

#28 Other impacts experienced by stakeholders

#29 Baseline of change

#30 Type of change

#31 Scale of change

#32 Degree of change

#33 Indicators

#34 Level of uncertainty 

#35 Duration of change

#36 Property rights

Data sources

The list of Criteria under ‘data sources’ includes the following:  

• Data types 
• Date of the value factor & updates 
• The date of the underlying data 
• Level of aggregation 
• Aggregation approach 
• Level of uncertainty 
• Data availability 

Figure 6: Visual representation of the ‘Data sources’ Tier 1 criteria and the subsequent Tier 2 & 3 criteria.

#37 Data sources

#38 Data types

#39 Date of the value factor & updates

#40 The date of the underlying data

#41 Level of aggregation

#42 Aggregation approach

#43 Level of uncertainty

#44 Data availability

Methodologies used

The list of criteria under ‘methodologies used’ includes the following:  

• Calculation parameters 
• Calculation proxies 
• Adaptation from original source 

Figure 7: Visual representation of the ‘Methodologies used’ Tier 1 criteria and the subsequent Tier 2 & 3 criteria.

#45 Methodologies used

#46 Calculation parameters

#47 Calculation proxies

#48 Adaptation from original source

Controls and assurance

The list of Criteria under ‘controls and assurance’ includes the following:  

• Standards for assurance processes and controls 
• Data quality 
• Assurance standards for the process of acting in the interest of affected stakeholders 
• Assurance process that acts in the interest of affected stakeholders 

Figure 8: Visual representation of the ‘Controls and assurance’ Tier 1 criteria and the subsequent Tier 2 & 3 criteria.

#49 Controls and assurance

#50 Standards for assurance processes and controls

#51 Data quality

#52 Assurance standards for the process of acting in the interest of affected stakeholders

#53 Assurance process that acts in the interest of affected stakeholders

Thank you for your input and engagement with the work of the value commission.