Provocation: Stop Outsourcing Impact—It Is Our Balance Sheet

To every boardroom still tracking “impact” on a side deck: we are mis-stating your accounts. Carbon intensity, social licence, ecosystem resilience—these aren’t footnotes to earnings; they’re entries on the same ledger that governs cash. Keep pretending otherwise and our P&L is fiction.

• Revenue booked today from a degenerative product is a loan against tomorrow’s brand equity and market optionality. That interest rate is rising; ask any fossil incumbent staring down stranded assets.

• Positive externalities are enterprise options in disguise. They widen market permission, lower capital costs, and compound like any other intangible. Ignore them and we are burning unpriced upside.

Our discount rate already knows the truth. Investors are baking climate risk and social volatility straight into the cost of capital. Either we recognise that flow in our own models or the market will do it for us—at a markup.

So let scrap the two-ledger mindset. Let’s fold impact into GAAP, IFRS, whatever acronym you swear by. If every allocation can’t clear a 2× test—pays now and pays later—rewrite the strategy, because the future column is just tomorrow’s row on today’s sheet.

Impact isn’t adjacent to profit. It is deferred profit (Positive impact compounds into tomorrow’s earnings,—or deferred loss (Negative impact shows up later as stranded assets, regulatory penalties, or brand damage). Count it accordingly, or prepare to be counted out.

Born from a conversation with @DavidJohnson