Press release: The hidden bill, social and environmental costs at Europe’s top companies outstrip their profits
Amsterdam, 30 March 2026 — A new report by the Impact Economy Foundation calculates the True Profits of the 20 largest European companies and finds that their combined financial profits of €209 billion would turn into a net societal loss of €19 billion once social and environmental costs are counted. “Europe does not lack sustainable solutions. It lacks a market that rewards them,” says Werner Schouten, director of Impact Economy Foundation.
True Profits
The True Profits Assessment, developed by Impact Economy Foundation in collaboration with Impact Institute and Singapore Management University, introduces a new metric: True Profit, a company’s financial profit after accounting for its key positive and negative social and environmental externalities. Grounded in the Impact Weighted Accounts Framework (IWAF), True Profits give businesses, investors and policymakers a new economic compass: not just which companies are financially profitable, but which are profitable for society.
Key findings show:
The report analyses the True Profits of the 20 largest companies in Europe.
On the one hand:
- Total annual positive contributions to society of the 20 companies analysed amount to approximately € 427 billion. These benefits include customer value, employee well-being and financial returns to investors.
On the other hand:
- Climate-related costs alone absorb 60% of companies’ reported profits.
- When social and environmental costs are fully accounted for, combined profits of €209 billion would turn into a net loss of €19 billion (see figure).
- For every euro of revenue generated, companies generate €0.16 in social and environmental costs, which are not reflected in profits.
These findings underline that Europe’s current economic model is heavily dependent on and favours business models that shift costs to society, while disadvantaging companies that invest in cleaner, more resilient solutions.
“Companies that want to lead on sustainability face a clear Profitability Gap. As long as societal costs remain unpriced, sustainable technologies and business models will struggle to scale,” says Werner Schouten, director of the Impact Economy Foundation.
Making impact profitable: the opportunity for Europe
The report concludes that Europe can be competitive and sustainable, only if markets reward impact. The report argues for making impact profitable through three levers: a True Profit Tax that links corporate tax rates to net societal impact; impact-adjusted interest rates that lower the cost of capital for impactful business models; and balance sheet reform that recognises climate and nature investments as long-term assets.
“Together we can build an economy where the most impactful solutions are also the most competitive. That is the only durable definition of competitiveness,” says Schouten.
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, calculating 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), covering impacts including climate, air quality, biodiversity, material use, employee wellbeing and consumer value.
About the Impact Economy Foundation
The Impact Economy Foundation accelerates the transition toward an economy where entrepreneurship and innovation contribute to solving societal challenges. By creating tools, movements and incentives such as True Profits, IEF ensures that doing good is also good business. The Foundation collaborates with leading academic institutions and global networks, including Harvard Business School, Impact Institute and Singapore Management University.
Media contact: Werner Schouten | Director werner@impacteconomyfoundation.org +31621664330
About Impact Institute
Impact Institute is a social enterprise and recognised global leader in impact measurement and valuation. Impact Institute helps organisations to understand and manage their impact, to optimise their value creation to stakeholders and stay within planetary and social boundaries. We help organisations to transform towards more sustainable and regenerative business models by quantifying and monetising social and environmental impacts. We provide tools, data and software, as well as consulting services and education to help organisations make better-informed and data-driven decisions.
