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Perspectives Paper: Defining & Estimating Social Value

1 July 2022

This second paper in the series examines whether Social Value can be a basis of value, the difference between Social Value and the Social component of ESG, and whether the existing valuation principle of highest and best use can apply to Social Assets and Social Value.

Intuitively we all know that parks, nature reserves, hospitals, graveyards, businesses and other assets have value to their local community, but unless they are the owner we rarely try to calculate that value. Here, instead of considering social value generated by an asset from the perspective of the asset owner, as much ESG valuation work does, we look at social value as the value to the users and other non-owner stakeholders. The value to society of a business, public resource or other asset.

Richard HaylerIVSC Standards Review Board

Following the publication of our first Perspectives Paper in this series on Social Value in November 2020, the IVSC’s Social Value Working Group has issued a further paper to explore some of the issues in more detail.

This second paper in the series examines whether Social Value can be a basis of value, the difference between Social Value and the Social component of ESG, and whether the existing valuation principle of highest and best use can apply to Social Assets and Social Value.

The paper also poses a number of questions for valuers, which the IVSC is seeking feedback on:

  1. Do you think that the definition for Highest and Best Use within a Social Value context needs to be expanded or reframed, and if so, how would you revise the existing definition?
  2. Should governments and charities be maintaining a Social Value balance sheet in addition to their traditional balance sheets?
  3. Do you consider that the current discussions on ESG adequately addresses Social Value concepts in both a for-profit and not-for-profit world? If not, what would give this discussion more prominence and stimulus?
  4. With the information that is presently available, is it possible in most situations to accurately quantify and measure Social Value? If yes how, and if not, what is missing?

Social Value Working Group

Name IVSC Board
Alexander Aronsohn Tangible Assets Board Technical Director
Becky Gaughan CBRE
Eduardo Rottman Tangible Assets Board
Ian Jedlin Standards Review Board
Kim S Hildebrandt Tangible Assets Board
Richard Hayler Standards Review Board
Roy Farthing – chair Standards Review Board
Kentaro Nakimichi Tohmatsu External Specialist
Simon Mather Tohmatsu External Specialist

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One Comment

  • Javier Ayala says:

    Useful tool for addressing Social Value concept and its components from Valuation Perspective for all Social Assets valuations and valuers to refer to. Worth distinguishing the difference between Social Value (concept) and Social (criteria) within ESG valuation.

    Perspective Papers on Social Value

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Intuitively we all know that parks, nature reserves, hospitals, graveyards, businesses and other assets have value to their local community, but unless they are the owner we rarely try to calculate that value. Here, instead of considering #socialvalue generated by an asset from the perspective of the asset owner, as much ESG valuation work does, we look at social value as the value to the users and other non-owner stakeholders. The value to society of a business, public resource or other asset.

Richard HaylerIVSC Standards Review Board
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of the IVSC, operating in 137 countries worldwide. Join them.

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There are more than 180 member organisations
of the IVSC, operating in 137 countries worldwide. Join them.

Become part of a global network working to enhance valuation standards and professionalism.