We recently published a whitepaper in close collaboration with the Erasmus Platform for Sustainable Value Creation: a platform with leading sustainable finance players in the industry and academia, including ABN AMRO, PGGM, DNB, Triodos, NWB, Robeco, Deloitte, the Rotterdam School of Management, and the Impact Economy Foundation.
The whitepaper discusses the risks of focusing solely on financial value, especially in a world affected by environmental and societal shifts. Companies that operate in sectors with high negative externalities have an increasing need to transform their business models and reduce their negative impacts or even become regenerative. In order to navigate the complex world full of transitions, CEOs, CFO, CROs, and business managers need to understand the positive and negative impacts of their business activities on their stakeholders. One of the key flaws in the current decision-making processes is that there is a heavy focus on short-term financial metrics, without accounting for the wider impacts that the company has on society. This puts the long-term viability of these companies at risk.
The whitepaper offers an approach to adopt integrated thinking, which combines the monetized social and environmental impacts with the financial values of the company to enrich decision-making. Using two case studies, one on the energy transition through the electrification of cars and one on the protein transition, the authors show how Impact Measurement and Valuation (IMV) techniques can help the CEO, CFO, and CRO build a broader value case. This allows for an actionable alternative narrative to short-termism. By embedding this into their strategic outlook, companies can anticipate relevant societal transitions and change their business model to become more sustainable and long-term viable.