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KPMG’s True Value methodology

KPMG’s True Value methodology PurposeThe purpose of this paper is to constructively critique KPMG’s “True Value methodology” which seeks to quantify in financial terms the value companies create or reduce for society.Design/methodology/approachThis paper is based on a review of documents produced by KPMG detailing its methodology and corporate reports in the public domain of the True Value methodology applied in practice. The critique is divided into two sections. The first section reviews KPMGs methodological view of a bounded economic reality and offers potential starting points and limitations for a conceptual framing of the “methodology”. Practical insights on applying the methodology are offered in the second section.FindingsThe True Value methodology helps its producers understand the potential risk to future earnings posed by current externalities being internalised. KPMG’s socio-economic framing of future scenarios and financial valuation of environmental and social impacts is limited to a standardised commercial viewpoint. Potential opportunities exist for producers to involve stakeholders in the application of the methodology to form a more inclusive and pluralist conception of risk and values for social and environmental impacts.Practical implicationsThis paper offers timely insights for companies using and considering the use of the “True Value” methodology and stakeholders considering their engagement in the application process and/or use of its findings.Originality/valueThe study is a constructive critique of this contemporary, financial practice of accounting for externalities developed by KMPG. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Sustainability Accounting, Management and Policy Journal Emerald Publishing

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Publisher
Emerald Publishing
Copyright
Copyright © Emerald Group Publishing Limited
ISSN
2040-8021
DOI
10.1108/SAMPJ-05-2016-0027
Publisher site
See Article on Publisher Site

Abstract

PurposeThe purpose of this paper is to constructively critique KPMG’s “True Value methodology” which seeks to quantify in financial terms the value companies create or reduce for society.Design/methodology/approachThis paper is based on a review of documents produced by KPMG detailing its methodology and corporate reports in the public domain of the True Value methodology applied in practice. The critique is divided into two sections. The first section reviews KPMGs methodological view of a bounded economic reality and offers potential starting points and limitations for a conceptual framing of the “methodology”. Practical insights on applying the methodology are offered in the second section.FindingsThe True Value methodology helps its producers understand the potential risk to future earnings posed by current externalities being internalised. KPMG’s socio-economic framing of future scenarios and financial valuation of environmental and social impacts is limited to a standardised commercial viewpoint. Potential opportunities exist for producers to involve stakeholders in the application of the methodology to form a more inclusive and pluralist conception of risk and values for social and environmental impacts.Practical implicationsThis paper offers timely insights for companies using and considering the use of the “True Value” methodology and stakeholders considering their engagement in the application process and/or use of its findings.Originality/valueThe study is a constructive critique of this contemporary, financial practice of accounting for externalities developed by KMPG.

Journal

Sustainability Accounting, Management and Policy JournalEmerald Publishing

Published: Nov 7, 2016

References