Is there a company out there that doesn’t promote itself as a socially responsible company. These companies also work hard on increasing their market capitalisation (value), so where does sugar fit in?
The gap between the book value and market capitalisation is largely unquantified but in reality it is made up of the employee value, often called HR asset value, intellectual capital and the socio-economic contribution.
There are tools to value the HR assets so this is possible, the accountants say they can value the intellectual property (although those innovative inventions are thin on the ground these days) which leaves valuing the socio-economic contribution of the organisation. This is where the “rubber hits the road” and with some companies the socio-economic value may be neutral or even negative for example tobacco companies, heavy polluters, some alcohol promotions and maybe foods that contain ingredients that the medical profession tells us is “damaging” like excess added sugar etc. We have been down the path of putting a value on the carbon footprint including pollution, carbon “miles” but did we transfer this to the balance sheet as a socio-economic value?
I am not an accountant but we are all governed by accounting standards for reporting through standards like GAAP, IASB (IFRSs) and FASB which appear to prevents us from putting these values on the official book value (but they will allow goodwill which can now be impaired to make up for losses elsewhere). However this should not prevent us from advocating for it, nor does it prevent us putting these values in as a balance sheet notes. This has been done for [...]