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2013 | OriginalPaper | Chapter

Integrating Sustainability in Capital Budgeting Decisions

Author : Marinilka Barros Kimbro

Published in: Corporate Sustainability

Publisher: Springer Berlin Heidelberg

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Abstract

This chapter discusses how to integrate sustainability and environmental impacts into capital budgeting decision-making by including: life-cycle-assessment (LCA), life-cycle costing (LCC), eco-efficiency (EE) and full-cost accounting (FCA) appraisal techniques. This comprehensive investment analysis – from “cradle to grave”- provides a template by which hidden environmental costs and benefits can be identified, analyzed and priced thus resulting in a better prediction of cash flows. The model also integrates environmental risks into the risk-rate component of the cost of capital by developing a sustainability risk-rate and sustainability-cost NPV that captures the sustainability exposure of each capital project alternative.

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previous chapter Sustainability and Business at a Crossroads: The Idea of Positive Investments in Creating Shared Value
next chapter A Study of Consumer Attitudes and Behaviour Towards Sustainability in Bradford, UK: An Economical and Environmentally Sustainable Opportunity
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Metadata
Title
Integrating Sustainability in Capital Budgeting Decisions
Author
Marinilka Barros Kimbro
Copyright Year
2013
Publisher
Springer Berlin Heidelberg
Book
Corporate Sustainability

Print ISBN: 978-3-642-37017-5

Electronic ISBN: 978-3-642-37018-2

Copyright Year: 2013

DOI
https://doi.org/10.1007/978-3-642-37018-2_5