Forward Thinking for Sustainable Business Value: A New Method for Impact Valuation

Herwig Buchholz, Thomas Eberle, Manfred Klevesath, Alexandra Jürgens, Douglas Beal, Alexander Baic and Joanna Radeke
Additional contact information
Herwig Buchholz: Merck KGaA, 64293 Darmstadt, Germany
Thomas Eberle: Merck KGaA, 64293 Darmstadt, Germany
Manfred Klevesath: Merck KGaA, 64293 Darmstadt, Germany
Alexandra Jürgens: Boston Consulting Group, 20095 Hamburg, Germany
Douglas Beal: Boston Consulting Group, 20095 Hamburg, Germany
Alexander Baic: Boston Consulting Group, 20095 Hamburg, Germany
Joanna Radeke: ESMT Berlin, 10178 Berlin, Germany

Sustainability, 2020, vol. 12, issue 20, 1-16

Abstract: How can a company commit to maximizing stakeholder value while maintaining financial performance? Companies increasingly have the ambition to provide stakeholder value to their owners and shareholders, employees, consumers, suppliers, partners, the environment, and future generations. However, such companies often face difficulties in demonstrating the value they bring to stakeholders, due to the lack of universal methods for assessing their impact. Besides the practical need to develop a method for impact valuation, we researched the existing literature and discovered the lack of a holistic method to evaluate all impacts of a company using a common currency with flexible adaptations at different levels. We developed a new method called Sustainable Business Value (SBV) to address these gaps and enable companies to evaluate their impacts. We tested the SBV in two pilots. The SBV method differs from currently used methods, including sustainability reporting, sustainability rating and indices, and sustainability accounting. SBV can be used for decision-making, portfolio management, benchmarking, stakeholder communication, investor communication, and business development and also provides a comprehensive perspective of a company’s impact across six standardized dimensions. However, further development and standardization of proxies and cross-industry standards are needed.

Keywords: impact valuation; impact assessment; corporate sustainability performance; Sustainable Business Value; SBV model (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
https://www.mdpi.com/2071-1050/12/20/8420/pdf (application/pdf)
https://www.mdpi.com/2071-1050/12/20/8420/ (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:gam:jsusta:v:12:y:2020:i:20:p:8420-:d:427130

Access Statistics for this article

Sustainability is currently edited by Ms. Alexandra Wu

More articles in Sustainability from MDPI
Bibliographic data for series maintained by MDPI Indexing Manager ().