Especially in public sectors and vital infrastructure, social value weighs increasingly heavier than profit on paper. Yet traditional financial metrics continue to dominate annual reports, investment decisions, and public opinion. This creates a mismatch between what organizations actually contribute to society and how they are valued.
An innovative model from Erasmus University aims to change that. The Erasmus Corporate Impact Index shows what companies really add.
The NS
A striking example comes from our own soil. The Dutch Railways (NS) closed the 2024 financial year with a loss of 141 million euros - the fifth loss in a row. Based on the classic metric, a company that struggles with its existence. However, the recent NS Futureproof Index Report shows that the NS actually creates an unprecedented amount of value for society.
According to the report, prepared by, among others, Prof. Dirk Schoenmaker from the Rotterdam School of Management, the NS generates an integrated value of €72.8 billion, of which only €6.4 billion is financial value. The rest comes from social value (such as accessibility, inclusion, and productivity) and ecological value (such as avoided CO₂ emissions). The so-called Futureproofing Ratio stands at 11.3; significantly higher than publicly traded companies like Philips (4.7).
Expressed in euros: where the NS receives 1.3 cents in subsidy per passenger kilometer, it delivers 8.4 cents in social value back.
That the train company does not operate without challenges - especially delays are a source of irritation - is explicitly mentioned in the report. But the core is clear: the added value for society and the economy far exceeds the financial deficits.
How the Erasmus index redefines value
The Erasmus index therefore takes the impact on society into account. The method used is based on three components:
- Financial value (FV) - the traditional accounting or market value
- Social value (SV) - positive external effects such as labor mobility, accessibility, and well-being
- Ecological value (EV) - environmental effects, both positive (such as emission reduction) and negative (such as biodiversity loss)
Together, these form the Integrated Value (IV). Compare that with the FV, and you get the Futureproofing Ratio. This allows companies to be benchmarked on their contribution to a sustainable and inclusive economy. Thus, not only profitability but also the social legitimacy of a business model becomes visible.
For entrepreneurs operating in sectors with public relevance (mobility, healthcare, education, energy, housing), this model provides guidance for strategic choices, public accountability, and long-term investments.
Social value around the world
The NS is not an exception. Internationally, there are also companies that, despite modest financial performance, deliver significant social value
The MTR Corporation operates the metro in Hong Kong and operates at the intersection of infrastructure and real estate development. Profit is often realized through real estate, but the real social value lies in accessibility and economic clustering around stations.
The French energy giant EDF (Électricité de France) is largely state-owned and operates with structurally low margins. Nevertheless, EDF plays a key role in the energy transition by investing in nuclear energy and renewable sources with social benefits that are difficult to capture in a P&L statement.
Patagonia is known as a morally driven company and is increasingly backing that up. The American outdoor chain has recently stopped primarily writing for shareholders, but for 'the planet'. By investing in circular chains, repair economies, and nature restoration, the company shows that social impact does not have to conflict with entrepreneurship.
And then there is DB (Deutsche Bahn). The 'German NS' faces financial challenges but generates, like the NS, a multitude of social value, from climate impact to economic accessibility, throughout Europe (tip: search for your international train tickets via DB). In Germany, this is an argument for public investments, not against.
The common feature of these companies: their value creation largely occurs outside the profit and loss statement. Nevertheless, they are essential for the functioning of society and the economy in the long term.
What can entrepreneurs learn from this?
For entrepreneurs and executives, there is an important lesson here: value is more than profit. In sectors with social relevance, it pays to think in terms of social return on investment. Especially in negotiations about financing, subsidies, or public collaboration, this offers new points of connection.
Additionally, investors and shareholders are also becoming more sensitive to impact. Impact reports, integrated annual reports, and ESG measurements are becoming increasingly decisive in the valuation of companies. Entrepreneurs who embrace this movement not only build their social legitimacy but also their future viability.
As the Erasmus researchers put it: 'Society is better off with a well-financed NS.' The same applies to any organization that consciously commits to public value creation. The downside: that is only (still) not quantifiable on the balance sheet.
