Background of the Sustainable Value Approach

Companies are more and more confronted with the need to operate in a sustainable way and contribute to sustainable development. Catchphrases like "Eco-Efficiency" or the "Triple Bottom Line" express the idea that while striving for economic prosperity corporate decision makers should take into account the environmental and social consequences of their business. However, a closer look reveals that today's business decisions are primarily driven by financial goals. Sustainability issues play a minor role at best. Our economic activity thus continues to reduce the environmental and social capital. However, we need environmental and social capital - alongside economic capital - to create value in the future. Only companies that consider environmental, social and economic capital in their decisions can truly create sustainable value.

Prof Frank Figge of Queen's University Belfast (United Kingdom) and Dr Tobias Hahn of IZT - Institute for Futures Studies and Technology Assessment in Berlin (Germany), have developed a value-oriented methodology to assess the sustainability performance of companies, called Sustainable Value. Sustainable Value allows to assess corporate sustainable performance in a value-orientated way. It makes use of exactly the same opportunity cost thinking that dominates the financial markets and is thus inline with managerial thinking. Sustainable Value allows an integrated assessment of the use of economic, environmental, and social resources in monetary terms. It is now possible to analyse, monitor and manage the sustainability performance of companies similar to the way capital is managed today in companies.

Read how to calculate Sustainable Value here or have a look at our tutorial. Contact us, if you are interested in tools with which you can manage the sustainability of companies using the Sustainable Value approach. Examples of how Sustainable Value has been used to monitor and manage sustainability in companies can soon be found at