The Sustainability Delta
Considering Sustainability Opportunities in Firm Valuation
Bibliographic Data
| ID | 12306755 |
|---|---|
| Authors | Rodrigo Zeidan (0000-0003-2980-3360, Fundação Dom Cabral and NYU Shanghai, corresponding author), Heiko Spitzeck (Fundação Dom Cabral) |
| Year | 2015 |
| Volume | 23 |
| Issue | 6 |
| Pages | 329-342 |
| Publication date | 2015-06-22 |
| Open Access | Yes |
| Type | ARTICLE |
| Venue | Sustainable Development (JOURNAL) |
| Journal identifiers | ISSN: 0968-0802 • E-ISSN: 1099-1719 |
| Publisher | Wiley (PUBLISHER • GB) |
| DOI | 10.1002/sd.1594 |
| OpenAlex | W1566468740 |
| Language | EN |
| Citations received | 2 |
| References cited | 56 |
In this paper we present the Sustainability Delta model as an improvement over existing environmental, social and governance (ESG) methodologies used in firm valuation. Starting from the question of how banks should integrate sustainability criteria into their valuation methods, we find that ESG methodologies currently do not consider the potential to generate higher future revenues due to sustainable innovations, and also lack consideration of different scenarios such as higher standards in legislation or consumer demand. To address these shortcomings the Sustainability Delta model is developed. Simulation results on the sugar manufacturing industry in Brazil demonstrate that by using the Sustainability Delta we estimate an improved firm value of 1.24%. The Sustainability Delta would allow for a more accurate valuation of firms as well as for the more effective allocation of capital for investors, which should bring market pressure to improve sustainability practices and thus contribute to sustainable development. Copyright © 2015 John Wiley & Sons, Ltd and ERP Environment
Business · Delta · Economics · Environmental economics · Environmental resource management · Natural resource economics · Sustainability · Sustainability organizations · Valuation (finance · Corporate Social Responsibility Reporting · Engineering · Environmental Sustainability in Business · Financial Reporting and Valuation Research · Accounting · Ecology
W(h)ither Ecology? The Triple Bottom Line, the Global Reporting Initiative, and Corporate Sustainability Reporting
Effects of "Best Practices" of Environmental Management on Cost Advantage
The Impact of Corporate Sustainability on Organizational Processes and Performance
Stock returns in relation to environmental, social and governance performance
The sustainable company
Linking responsible investments to societal influence
Environmental sustainability through project appraisals
Assessing SRI fund performance research
Corporate Social and Financial Performance
From Exxon to BP
| Citations per year | 0.25 |
|---|---|
| Citation span | 2018 - 2022 (5) |
| Highly cited | No |