RESOURCES

How the Integrated Value Model enriches corporate decision-making and promotes sustainable business

Organisations and their management need an interpretation of ‘value’ far broader than simple financial value if they want their business to thrive – or even survive – in a world tested by environmental and societal shifts. The decision in where and how to invest must take other values – societal and ecological values – into consideration.

The long-term viability of organisations may be at risk if executives do not enhance their way of decision making. If executives, business managers, and relationship managers would better understand the positive and negative impacts of their business activities on their stakeholders they would have a much richer set of data points to help understand where business opportunities lie and what business risks to prepare for.

The Research Project

The paper tries to answer the following questions:

Does integrated value help the transition to sustainable business models?
Could a case be made for the CFO to embrace integrated value?

The investment decision model for integrated value is tested with two case studies:

An automotive company, and
A food company

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Key findings

The report shows that the 20 companies analysed generate substantial positive value for society, but also significant unpriced costs. Their total annual positive contributions amount to approximately €427 billion. These benefits include customer value, employee well-being and financial returns to investors.

At the same time:

Climate-related costs alone absorb 60% of companies’ reported profits
When social and environmental costs are fully accounted for, combined profits of €209 billion turn into a net societal loss of €19 billion
For every euro of revenue generated, companies create €0.16 in social and environmental costs that are not reflected in profits

These findings underline a deeper structural problem: Europe’s current economic model still depends heavily on business models that shift costs to society, while disadvantaging companies that invest in future-proof alternatives. The report makes a broader case for redefining competitiveness itself. Long-term competitiveness will come from building markets in which the most impactful businesses are also the most competitive.

About the True Profits Assessment

The True Profits Assessment was developed by the Impact Economy Foundation in collaboration with Singapore Management University and Impact Institute. It analyses the 20 largest European companies by market capitalisation and calculates each company’s True Profit: financial earnings adjusted for quantified social and environmental costs and benefits.

The methodology builds on the Impact Weighted Accounts Framework (IWAF) and covers impacts including climate, air quality, biodiversity, material use, employee well-being and consumer value.

Learn more about True Profits