Reframing company accounts for people, planet and profit
By Kate Coghlan
The Centre for Climate Engagement (CCE) at Hughes Hall, University of Cambridge, is partnering with Social Value International (SVI) to support the True & Fair Project, bringing academic rigour to help directors, investors, and accounting bodies integrate sustainability into financial reporting.
Every day, businesses rely on natural and social resources like carbon, water and labour, many of which impose hidden costs on people and the planet. Yet financial accounts rarely reflect these externalities, leaving a gap between what a company is really costing society and what its balance sheet shows.
To bridge this gap, the True & Fair Project, led by SVI, aims to challenge the way financial profit is calculated by ensuring that dependencies and negative impacts (hidden costs) are recognised within financial statements, rather than being confined to a non-financial report. Now, CCE is joining forces with SVI to deepen the project’s legal, governance, and practical foundations.
Research focus
SVI’s True & Fair initiative began with a legal opinion (issued by George Bompas KC in 2024) that explored whether UK company directors already have a duty to incorporate sustainability considerations into accounts when such information is material.
The finding: yes, in many cases they do.
This implies that rather than just a “nice to have” in non-financial reporting, sustainability-related information may be essential to core financial statements. The collaboration with CCE explores how this principle intersects with the duties of directors, investors, accounting bodies, and regulators.
CCE brings legal, governance, and policy expertise, helping translate complex theory into practical guidance. As part of the collaboration, SVI and CCE are developing in-depth analysis and tailored guidance to inform key stakeholders, including directors, investors, accountants and lawyers to explore how the true and fair requirement applies to their work in the context of sustainability.
Key results
- SVI has already published a guide for UK company directors on how to apply the “true & fair” requirement in the context of the company’s carbon emissions.
- The new collaboration extends the agenda: CCE and SVI are co-developing deeper analysis and tailored guidance examining the role of other stakeholders including investors, accounting bodies, and legal advisors.
- Together, they are considering how a range of legal obligations interact with the core ‘true and fair’ requirement, exploring how to leverage these obligations to better reflect sustainability issues in financial accounts.
“We are excited to support SVI’s campaign to ensure sustainability is integrated in financial reporting … and contribute to practical resources which help businesses and investors navigate legal and governance complexities.”
Nick Scott
Manager of the Law and Climate Programme at CCE
Challenges, Next Steps, and Impact
One challenge is bridging legal theory and boardroom practice. Directors may struggle to know when sustainability is material and how to represent it. The true and fair requirement applies not only in the UK but also in the EU, most Commonwealth countries, and beyond. Another challenge, therefore, is to ensure that the guidance is practically relevant across different sectors and jurisdictions.
Next steps include producing detailed stakeholder-specific guidance, mapping engagement opportunities with accounting bodies and regulators, and creating case studies to prove the concept. CCE and SVI will also communicate widely, to boards, auditors, investors, and others, to raise awareness of the true and fair requirement and the True & Fair Project’s aims.
This collaboration could shift the rules of corporate accountability — making sustainability disclosures a norm in core financial statements. It could better align board incentives with sustainability goals, aid investors in risk assessment, and embed climate considerations into the foundation of corporate governance.
source: cam.ac.uk