Capital valuation and sustainability: a data programming approach

Capital valuation and sustainability: a data programming approach Project valuation methods tend to focus primarily on economic returns and ignore wider sustainable development concerns. Traditional project valuation methods attempt to monetize the benefit and cost impacts of environmental and social impacts. Monetizing costs and benefits of environmental and social goods and services however is challenging. To avoid the need to assign a priori dominance to any of these capital forms, we derive a composite index formed as an aggregate of sub-indices that represent financial returns, environmental impacts and social effects, index weights are obtained through solving a series of data envelopment analysis optimization models from a set of sub-indices over each project’s life. We assess the reliability and robustness of this approach using a portfolio of corporate projects. The sustainability of each project is benchmarked against the ‘best’ and ‘worst’ performing project within the portfolio so that weights of the component indices are derived using only the portfolio data. This approach ranks projects according to the optimal trade-off between sustainable outcomes without the need to arbitrarily prescribe weights to ensure environmental or social outcomes are met. The design of the model naturally favors projects that adequately address the full spectrum of economic, environmental, social, and any other desirable factors relative to the portfolio of projects under assessment. The results provide reliable and robust guidance for sustainable business decisions. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Review of Quantitative Finance and Accounting Springer Journals

Capital valuation and sustainability: a data programming approach

Loading next page...
 
/lp/springer_journal/capital-valuation-and-sustainability-a-data-programming-approach-YW0jdx4w1z
Publisher
Springer US
Copyright
Copyright © 2014 by Springer Science+Business Media New York
Subject
Economics / Management Science; Finance/Investment/Banking; Accounting/Auditing; Econometrics; Operations Research/Decision Theory
ISSN
0924-865X
eISSN
1573-7179
D.O.I.
10.1007/s11156-014-0448-2
Publisher site
See Article on Publisher Site

Abstract

Project valuation methods tend to focus primarily on economic returns and ignore wider sustainable development concerns. Traditional project valuation methods attempt to monetize the benefit and cost impacts of environmental and social impacts. Monetizing costs and benefits of environmental and social goods and services however is challenging. To avoid the need to assign a priori dominance to any of these capital forms, we derive a composite index formed as an aggregate of sub-indices that represent financial returns, environmental impacts and social effects, index weights are obtained through solving a series of data envelopment analysis optimization models from a set of sub-indices over each project’s life. We assess the reliability and robustness of this approach using a portfolio of corporate projects. The sustainability of each project is benchmarked against the ‘best’ and ‘worst’ performing project within the portfolio so that weights of the component indices are derived using only the portfolio data. This approach ranks projects according to the optimal trade-off between sustainable outcomes without the need to arbitrarily prescribe weights to ensure environmental or social outcomes are met. The design of the model naturally favors projects that adequately address the full spectrum of economic, environmental, social, and any other desirable factors relative to the portfolio of projects under assessment. The results provide reliable and robust guidance for sustainable business decisions.

Journal

Review of Quantitative Finance and AccountingSpringer Journals

Published: Mar 16, 2014

References

  • Monitoring changes in economy-wide energy efficiency: from energy–GDP ratio to composite efficiency index
    Ang, BW
  • Evolving sustainably: a longitudinal study of corporate sustainable development
    Bansal, P
  • A cross-country assessment of bank risk-shifting behavior
    Barth, JR; Bertus, M; Hai, J; Phumiwasana, T

You’re reading a free preview. Subscribe to read the entire article.


DeepDyve is your
personal research library

It’s your single place to instantly
discover and read the research
that matters to you.

Enjoy affordable access to
over 18 million articles from more than
15,000 peer-reviewed journals.

All for just $49/month

Explore the DeepDyve Library

Search

Query the DeepDyve database, plus search all of PubMed and Google Scholar seamlessly

Organize

Save any article or search result from DeepDyve, PubMed, and Google Scholar... all in one place.

Access

Get unlimited, online access to over 18 million full-text articles from more than 15,000 scientific journals.

Your journals are on DeepDyve

Read from thousands of the leading scholarly journals from SpringerNature, Elsevier, Wiley-Blackwell, Oxford University Press and more.

All the latest content is available, no embargo periods.

See the journals in your area

DeepDyve

Freelancer

DeepDyve

Pro

Price

FREE

$49/month
$360/year

Save searches from
Google Scholar,
PubMed

Create lists to
organize your research

Export lists, citations

Read DeepDyve articles

Abstract access only

Unlimited access to over
18 million full-text articles

Print

20 pages / month

PDF Discount

20% off