Make Impact Profitable

Business has the power to drive solutions to humanity’s greatest challenges from
climate change to inequality. But today’s markets are not designed to support that
potential. The economic system still rewards short-term financial gains, even when
they come at the expense of people and planet.
The root of this problem lies in what we count — and what we ignore.

The Profit Paradox

We are living in what can only be described as a Profit Paradox: companies thrive
financially by offloading societal and environmental costs. While these companies report impressive profits on paper, their operations often inflict real losses on ecosystems, workers, and society.
According to recent analyses, 66% of listed company profits would vanish if social and environmental costs were fully accounted for. Meanwhile, truly impact-driven
companies — think Patagonia, Interface or Those Vegan Cowboys — often struggle to scale, despite generating immense value for society.
Take investing in nature. The value case for investing nature is crystal clear: every euro invested leads to 4 to 38 euros in benefits for society. However, the business case remains problematic because only few of those euros return to the investor.
This is the Profitability Gap: transformative companies that solve real problems remain financially marginal, while harmful business models dominate the market.
To build a truly sustainable economy that addresses this, it’s vital that we design out
the tension between profit and impact.

Closing the Gap with True Profits

We must fix the foundation of what we count in the economy. That starts with redefining profit: from financial profit to True Profits.
True Profits represent a company’s financial profits after accounting for its most
significant external costs and benefits. By quantifying impacts across nature, society, and human well-being — and expressing them in the universal language of currency —True Profits reveal what a company contributes to the world.
This is not about reinventing accounting, it’s about aligning it with 21st-century
priorities. Just like traditional financial metrics, True Profits can be calculated at the
level of companies, projects, or investments. They allow investors, executives and policymakers to see which activities are truly value-creating and which are value destructive.

From Redefining Profit to Making Impact Profitable

But redefining profit is only step one. The second and perhaps more transformative step is this: We must make impact profitable.
True Profits provide the basis for a new class of market incentives that reward
companies for their positive contributions to society. This means shifting from a race to the bottom on price, to a race to the top on impact.
That transformation is already within reach. Imagine a fiscal system where companies that create more societal value pay lower corporate tax rates — a True Profit Tax that reflects their net benefit to the world. Or a financial system where investments in nature, biodiversity, and clean innovation are recognised as real assets, by literally putting nature on the balance sheet. And consider how central banks are beginning to act: the European Central Bank, for example, now adjusts collateral requirements based on a company’s climate performance, offering more favourable terms to firms with lower emissions.
These developments point toward a future where capital naturally flows to the most
regenerative, inclusive, and sustainable enterprises — not as an exception, but as the norm.

Why This Matters

Markets are powerful because they scale what they reward. Today, they reward costcutting and externalisation. Tomorrow, they can reward regeneration, fairness, and long-term value creation.
True Profits make this possible. By integrating impact into the heart of financial logic, we empower companies to lead sustainability transitions without sacrificing
competitiveness.
It’s time to design an economy where the most impactful companies are also the most profitable ones.
Let’s make impact profitable.

Featured image: Photo by Jakub Żerdzicki on Unsplash