SVI Pioneers Recognition of the Social Cost of Carbon as a Financial Liability

Social Value International (SVI)’s Board of Trustees has formally committed to accepting responsibility to pay for the social consequences of its Scope 1, 2 and 3 greenhouse gas (GHG) emissions. This commitment, structured as a constructive obligation, has been recognised in the organisation’s 2023/24 financial statements as a liability on the balance sheet, marking a major milestone in sustainability accounting.

The move comes as part of SVI’s leadership of the True & Fair Project, which is helping companies understand how legal and accounting frameworks can be used today to reflect sustainability information in their statutory financial accounts.

Under UK company law, directors are required to ensure financial statements present a “true and fair view.” A legal opinion, commissioned by SVI in early 2024, confirms that material sustainability issues - including carbon emissions - may need to be included in financial accounts to meet this requirement.

“SVI accepts this leadership role as we uphold our vision to change the way the world accounts for value, to achieve decision-making that advances equality and unequivocally avoids environmental degradation”, said Stephanie Robertson, Co-Chair of SVI’s board.

This action places SVI at the forefront of a growing movement to internalise environmental externalities and embed sustainability into financial decision-making. By recognising the social cost of carbon as an expense and liability, SVI is leading by example and supporting other organisations to follow suit.

SVI’s full financial statements for 2023/24, including the carbon provision, are publicly available via Companies House and can be downloaded here.

Organisations interested in understanding the legal and practical steps to reflect carbon or sustainability-related obligations in their accounts can learn more via the True &  Fair Project.