Home / Issues / Financial Markets / Value Driver Model

Value Driver Model

The Value Driver Model is a tool that utilizes key business metrics to determine the return on investment of corporate sustainability activities. The Value Driver Model offers companies a simple and direct approach to assess and communicate the financial impact of their sustainability strategies. The Value Driver Model likewise helps investors to effectively integrate sustainability data into their existing investment processes.

The financial and market performance of any firm is the product of a complex array of factors, as such the goal of the Value Driver Model is to provide a few key metrics that companies can use to illustrate how their sustainable business strategy contributes to overall performance.

The model assists firms in constructing their own metrics to describe the connection between their top financial objectives (e.g. return on capital or return on equity) and the following:

  • Revenue growth from sustainability-advantaged products, services and/or strategies (S/G).
  • Total annual cost savings (and cost avoidance) from sustainability-driven productivity initiatives (S/P).
  • Reduced sustainability-related risk exposure that could materially impair a company’s performance (S/R). 

Companies are invited to host an ESG Investor Briefing using the Value Driver Model as a basis for communicating ESG return on investment to investors. Please see the ESG Investor Briefing Project page for more information.

The Toolkit

Companies are encouraged to use the following tools to apply the Value Driver Model to their strategies, operations, and communications. Other stakeholders are also encouraged to use these tools to support company workshops and trainings. Please email the contacts below if you would like further support adapting the Value Driver Model.

The Value Driver Model: A Tool for Communicating the Business Value of Sustainability. This paper provides a contextual basis for the Model and illustrates how companies can begin to calculate Value Driver metrics. Download.  

Case examples: Snapshots and detailed cases demonstrate how one or more dimensions of the Value Driver Model apply to specific companies. View case examples.

Presentation Slides: Provide an overview of the operational steps that can be taken to implement a value driver approach within a company. It is intended as a source for internal corporate communications, as well as for other interested parties, such as Global Compact Local Networks. Download Presentation (pdf). For a PowerPoint file, with accompanying presenter notes contact Sarah Bostwick (bostwick (at) unglobalcompact.org)

Share Your Progress

The Global Compact and PRI are interested in how companies are using the Value Driver Model, in an effort to enhance these tools and your ability to adapt the model to your corporate context. Please share your company’s experience with the project team:

Contact

Sarah Bostwick
Manger, Reporting
bostwick (at) unglobalcompact.org

Danielle Chesebrough
Manager of Investor Engagements with the UN Global Compact
danielle.chesebrough (at) unpri.org

(Last updated: 11 December 2013)