Conscience-based sustainability: The era of Impact Accounting is nigh

From 18 June 2026, over 20,000 businesses globally will be including the monetary costs of their environmental, social and human capital in their overall financial reporting, and more will follow suit

If ever there was an example of sustainability becoming mainstream, it is the imminent introduction of Impact Accounting.

Pioneered by renowned global venture capitalist and philanthropist Sir Ronald Cohen; the strategy is the practice of measuring and valuing a business’ social, environmental and economic consequences in monetary terms.

It expands on traditional financial accounting to include external factors such as carbon emissions or societal health contributions, for example, allowing companies to assess their total risk, return and true value to society.

The premise is to not only make organisations more accountable for their actions in terms of ESG impact, but to demonstrate to customers that they are taking ESG seriously.

Speaking at the Lenovo 360 Circle Summit in Geneva last week, Sir Ronald said this development marks a major changing point for the world as CFOs that have emissions going way above average could be caught “without their swimming trunks on”.

“The world has been changing since the Microchip was invented,” said Cohen. “People questioned the need for cellular phones and nobody anticipated the internet either. It is the same thing with sustainability. The world has changed in terms of its values and younger people are looking for more meaning in their lives and are moving away from capitalism. Now technology is meeting impact and AI is helping to manage impact in ways we never could previously.”

He warned companies that refused to embrace the sustainability reporting revolution would soon be left in the dust.

“Understanding and integrating into these trends is a necessity. It was the same with the people who refused to embrace technology changes and were overtaken 50 years ago – look at IBM and Apple. Those that don’t embrace these changes today will be overtaken. This is a better way to grow and a better way to make money.”

Cohen said the climate will continue to worsen, and this type of reporting will become increasingly mandatory, so it is vital that the correct data is there to ease the transition.

“The problem is that businesses and investors have not had access to reliable data about impact in the past. But now we will be able to calculate Earnings per share (EPS) after taking impact into account,” he said.

“This will affect companies differently, but because of the computing power available today the ability of AI to bring a sense to the data in minutes in a way that would have required a huge amount of effort in the past. Companies that don’t adapt will get overtaken or will disappear.”

Cohen’s advice to CFOs was to be more forward thinking when it came to ESG.

“When impact meets technology is where the most valuable companies are going to be built. They will bring impact into their business model. The more they sell the more they will deliver impact and the more profitable they will be. The essence of decision making is taking the future into account – working out what the future holds is crucial for a leader to succeed.”