SK Group has decided to create an international standard that measures the "social value" created by companies in three years with global conglomerates.
According to SK on Aug. 15, Value Balancing Alliance (VBA), a non-profit corporation that jointly studies social value measurement systems, will hold an opening ceremony in Frankfurt, Germany, on Aug. 19 and will start its official work.
VBA is a consultative body jointly led by SK and German chemical company BASF. In addition to SK and BASF, eight other companies including Novartis (Swiss), Bosch, SAP, Deutsche Bank (Germany), Lafarge Holcim (France), and Philip Morris (U.S.A.) participated in the VBA.
It is also working with four major global accounting firms -- PricewaterhouseCoopers (PwC), KPMG, Ernst & Young (E&Y), and Deloitte.
VBA plans to increase the number of participating companies in the future, but limit its member companies to around 15 for efficiency in discussions.
VBA will create accounting standards related to social values that can be internationally accepted by 2022 and encourage companies from each country to use them through the Organization for Economic Cooperation and Development (OECD).
OECD will participate in the VBA as an advisory group from the initial development stage. The European Commission (EU) and BlackRock, the world's largest asset manager, will also join the advisory group.
In addition, a research consortium led by professors from Oxford University in Britain and Harvard University in the U.S. will be formed during the second half of the year for the theoretical foundation of measurement system development.
"Although some companies are currently measuring social values, it is impossible to compare them due to different standards," said an SK official, adding, "VBA's purpose is to objectively grasp the level of social value creation of individual companies by establishing unified standards at a global level."
In particular, SK is expected to take the role of vice president of VBA and lead the establishment of international standards by reflecting its know-how and experience in measuring social values.
VBA participation was also made at the Davos Forum in Switzerland earlier this year with a proposal from BASF, which saw SK Chairman Chey Tae-won hold a separate session of social values.