Companies are spending millions of dollars in local communities to support sustainability – environmental, social and governance (ESG) – programs that develop infrastructure, provide vocational training, transfer skills, support a variety of local institutions and stakeholder groups and much, much more. Measuring the real and perceived benefits to communities of sustainability programs is important for assuring positive outcomes. Thankfully, there are many proven tools and practices for measuring the impact of sustainability programs. But this is only half the story.
In addition to creating benefits for the local communities, sustainability investments also create significant business value for companies. Intuitively, companies understand that there is a business case for being a good corporate citizen. Positive relationships with communities, civil society and governments help ensure that, among other things, production schedules are met, access to labor, land and resources are maintained, and reputations are kept intact.
The Financial Valuation Tool calculates a probable range for the net present value (NPV) back to the company from a portfolio of sustainability investments, including value protected through risks mitigated and value created through productivity gains. The FV Tool, which is used to plan, prioritize, measure and scale a company’s site-level sustainability investments, is designed to supplement a company’s traditional discounted cash flow valuation model. The tool can compare two different sustainability investment scenarios, based on risks and opportunities faced by an operation/asset, such as a mine or pipeline, to help managers decide which scenario is likely to yield the most value for the company by creating positive impact for surroundings communities.