Posted on: 08/01/2019
Companies should be forced to account for their environmental impact when calculating profitability, according to a survey of consumers.
The YouGov survey, commissioned by Social Value UK, found that 40% of people think additional measurements should be mandatory when calculating profitability.
The research found that millennials are the most likely to want a change in accounting rules, with the number of people agreeing that the additional measurements should be included rising to 44% in the 25-34 year old age group.
Social Value UK is encouraging businesses to adopt a ‘principles-based’ approach to accounting, taking in a broader definition of value which goes beyond the financial.
Public expects more accountability
Ben Carpenter, CEO of Social Value UK, said: “The overall ‘value’ or ‘profitability’ of a company is highly important as it informs key decisions, from setting share prices to informing economic analysis.
“This hasn’t escaped the attention of members of the public, who now clearly expect companies to account for their social and environmental impact, as well as their financial performance.”
The Financial Reporting Council (FRC) has also this year launched a major project to challenge existing thinking about corporate reporting and consider how companies should better meet the information needs of shareholders and other stakeholders.