Rethinking Capital is the home of normative accounting for intangibles. We hold the intellectual property relating to the net zero, nature and other sustainability applications of normative accounting for intangibles and normative governance.
We're an international community of experts in accounting, governance and intangibles brought together to tackle today's systemic inequities.

Tackling the root cause of today's natural and social inequities

"The portion of the world's economy that doesn't fit with the old model just keeps getting larger. That has major implications for everything from tax law to economic policy to which cities thrive and which cities fall behind, but in general, the rules that govern the economy haven't kept up. This is one of the biggest trends in the global economy that isn't getting enough attention."

^{Bill Gates reviewing Capitalism Without Capital: The Rise of the Intangible Economy}

Applied to the climate and biodiversity crises, Bill Gates' 'major implications' include that the incentives to meet a commitment to reduce emissions are upside down - accounting practice hasn't kept up and has become the front line of the problem.

Applied to Anglo American's commitment to a '30% reduction in Scopes 1 and 2 emissions by 2030'¹, accounting practice today treats the commitment as an externality (not the company's responsibility) - and investments purposed to meet it (such as innovation or carbon credits) as costs.

Rethinking Capital's back-to-basics approach to accounting for emission reduction commitments flips the incentives. At its heart is recognising the commitment as an obligation to be met over time - and the simple application of double-entry bookkeeping to recognise each £1 of capital allocated into building equitable relationships with nature as investing into an intangible asset on the balance sheet that grows in value as emissions are saved.

Applying it, Anglo American's commitment to a '30% reduction in Scopes 1 and 2 emissions by 2030', accounting practice today treats the commitment as an externality (not the company's responsibility) - and investments purposed to meet it (such as innovation or carbon credits) as costs. By applying Rethinking Capital's approach, its commitment would increase balance sheet assets by around $497m - materially improve its key financial metrics (profit, EPS, ROE, debt to equity ratios) and be taken into account in credit rating shown by this S&P paper² - and would increase by at least $1.545bn and flow into other metrics if accelerated.

This follows our work with the Interpretations Committee of the IASB to recognise that a provision (a quantified accounting entry) for a net zero commitment is a constructive obligation under IAS37 - a decision approved unanimously by the IASB in April 2024.

Our 2024 program will test and rapidly drive this IP to adoption. The ambition is to impact net zero and nature decision governance at scale in 2024. This program is the first intervention in a model of system change designed and held by our sister company The Rethinking Capital Foundation.

1. 30% reduction in Scopes 1 and 2 emissions by 2030

2. S&P Paper