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2019 | Book

Structure of Sustainability Valuation Read chapter Read first chapter

Sustainability Valuation of Business

Author: Dr. Yonghyup Oh

Publisher: Springer International Publishing

Book Series : SpringerBriefs in Finance

Part of: Springer Professional "Wirtschaft+Technik" , Springer Professional "Technik" , Springer Professional "Wirtschaft"

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About this book

This book discusses the concept of sustainability valuation, a method in which corporate social responsibility (CSR) among other factors is embedded in the cash value of a given firm. It proposes a new, holistic way of representing sustainability in a theoretical framework, and discusses the role of policy in determining a firm’s cash value. Moreover, it addresses the method’s potential, the challenges involved in its practical application, and how it can be adapted to specific cases. By shaking up the field of firm valuation in an era characterized by global sustainable development, the book makes a valuable contribution to the available literature on finance, sustainability science, and policymaking.

Table of Contents

Frontmatter
1. Structure of Sustainability Valuation
Abstract
This chapter introduces the concept of sustainability valuation of business. In this valuation, the value of business is determined by the values of sustainability businesses contribute to the sustainability of society. This is a main departure from conventional valuation methods. It finds a win-win situation between businesses and the sustainability of society, as the value of business would increase only when the business improves the sustainability of society. This chapter introduces key concepts such as de jure and de facto sustainability, describes the sequence of sustainability valuation, and discusses how this method would distinguish itself from other valuation methods.
Yonghyup Oh
2. Sustainability Channels of Business
Abstract
This chapter is the first step in sustainability valuation. As the contribution of business to the sustainability of society is the key driver of the business value, it illustrates how the society can build its decision-making model of sustainability and derive policy that would best serve to sustainability development of the society. As the way in which business is run may not automatically assure production of positive sustainability, this chapter introduces the concept of sustainability channels which indicate the system that transfers de jure business sustainability into de facto business sustainability. This mechanism induces businesses to get more engaged in creating sustainability of society.
Yonghyup Oh
3. Sustainability Cashflows
Abstract
This chapter proposes a way to enter the transfers realized through sustainability channels to the system of business accounting. A system of business reporting can indicate sustainability values in its products along the three pillars of sustainability at each stage of resource procurement, production, and sales. It argues that the private sector and the public sector have enough information to establish such a system. This chapter discusses the concept of sustainability cashflows.
Yonghyup Oh
4. Sustainability Discount Rates
Abstract
This chapter discusses capital that produces sustainability and how to find the rates to discount future sustainability cashflows of business. With sustainability cashflows, the return-risk profile of business would change, which would eventually modify the capital structure of the business and consequently its discount rates. It maintains the view that the discount rates are market-driven, and the transition to new discount rates will be slow and gradual.
Yonghyup Oh
5. Completion and Further Issues
Abstract
This chapter completes the valuation, which follows a straightforward calculation of the discounted present value of the future sustainability cashflows. It further discusses challenges and limitations, particularly regarding the feasibility of institutional support and the extended scope of work of a valuer. It emphasizes the need for valuing small and independent businesses. It should be noted that the actual implementation will require a certain degree of empirical adaption, while sustainability valuation would serve as a basis for valuation for virtually all businesses.
Yonghyup Oh
Backmatter
Metadata
Title
Sustainability Valuation of Business
Author
Dr. Yonghyup Oh
Copyright Year
2019
Electronic ISBN
978-3-030-18648-7
Print ISBN
978-3-030-18647-0
DOI
https://doi.org/10.1007/978-3-030-18648-7