RESOURCES

True Profits Assessment

Europe holds many of the foundations for future competitiveness. It has strong positions in clean tech, circular innovation and sustainable business models. Yet these strengths are not fully translating into market advantage. This report argues that a crucial next step is needed: pricing impact into the market.

The True Profits Assessment examines the 20 largest European companies by market capitalisation and calculates their True Profit: financial profit adjusted for key social and environmental externalities. In doing so, it shows which companies are not only financially profitable, but also create net value for society.

The central finding is clear. Europe’s current market rules continue to reward companies for externalising harm, while businesses investing in cleaner and more resilient models often remain at a disadvantage. If Europe wants to strengthen long-term competitiveness, it must begin rewarding impact.

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Methodology paper

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