Making sustainability accountable: a valuation model for corporate performance

Corporate Sustainability refers to business strategies that create long-term shareholder value while adding social and environmental values to external stakeholders as well. Reviews from current research work show that there is a critical need for a quantitative method to evaluate business sustainability performance and incorporate it into company's management and decision-making processes. This research develops a valuation model to account the values and costs of corporate sustainability strategies in terms of economic prosperity, environmental quality and social justice. A sustainability index system is developed to assess the company's economic, environmental and social performance, as well as their interactions. An additive utility function combines all the indices in correspondence with the decision makers' value structure and examines how social and environmental investments impact a company's bottom line. A business case of an electronic company is studied to illustrate the implementation of the value model. This valuation model will shed valuable light on the accountability of external values and costs that are not captured by traditional financial methods.