The VVA is a commitment to review sustainability and valuation, including education, standards and practices, with the aim of improving understanding of their inter-relationship.
The Accord represents a formal expression and commitment by signatories to advance understanding, knowledge, education and practices about valuation and sustainability:
1. Review how sustainability relates to the practice and standards of valuation
2. Working with stakeholders to promote awareness of and competency in the appropriate methods of addressing sustainability in valuations and worth appraisals
3. Working with those within and outside the valuation professions worldwide, to education and inform about sustainability and its relationship to value and worth
4. Regular reporting of the collaborative progress via an agreed secretariat set up for that purpose, and targeting a full report on progress at international conferences.
Economic sustainability is key to delivering on the broader Sustainability agenda. The primary vehicle for determining financial viability or security is the business case, into which valuations and appraisals are of fundamental importance. Likewise on an ongoing basis, financial statement - and the valuations within them - take centre stage in assessing performance and risk. The professional who evaluates the business case for a financial institution is usually required to follow valuation standards. "Valuers" are accredited and regulated by a number of professional bodies globally and they apply authorised standards. However, valuation standards do not extensively cover sustainability even though they may embody many of the principles.
A number of studies have concluded that there is a possible link between the value of real estate assets, its sustainable features and related performance, although this is not always picked up in the calculation of Market Value, which is limited by specific definition.
Value is poorly and sometimes wrongly captured in business cases and too often focused on costs at the expense of value. Without a reliable business case and independent validation for sustainability, the real estate and financial sectors will remain sceptical.