The True & Fair Project, led by Social Value International (SVI), is working to change how financial profit is calculated by ensuring that hidden costs and negative impacts are included in financial statements, not just in non-financial reports. The Centre for Corporate Engagement (CCE) has joined SVI to help strengthen the project's legal, governance, and practical aspects.
The initiative began with a 2024 legal opinion from George Bompas KC, which examined whether UK company directors have a duty to include sustainability issues in accounts when such information is important. The conclusion was that, in many cases, directors do have this responsibility.
This finding suggests that sustainability information may be essential for core financial statements and not only for non-financial reporting. The partnership between CCE and SVI aims to clarify how this requirement affects directors, investors, accounting bodies, and regulators.
CCE brings expertise in law, governance, and policy to the project. Together with SVI, they are preparing detailed analysis and guidance for directors, investors, accountants, and lawyers on applying the true and fair requirement in relation to sustainability.
One of the main challenges is helping directors determine when sustainability is relevant and how it should be reflected in financial reports. The true and fair requirement applies beyond the UK to the EU and most Commonwealth countries. Therefore, making sure the guidance is useful across different sectors and regions is another key issue.
Future steps include producing stakeholder-specific guidance documents, engaging with accounting bodies and regulators, developing case studies to support their approach, and communicating widely with boards, auditors, investors, and others about the project’s goals.
According to those involved in the collaboration: "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."