Accounting for the Impact of Sustainability and Net Present Value on Stakeholders

Abstract

The increasing importance of sustainability within the framework of organizational structures requires an adaption of the Net Present Value (NPV) criteria. We propose a modification to standard evaluation techniques that considers a social distance factor to other stakeholders when determining the appropriate discount rate for investment cash flows. We also set the modification appropriateness in the context of business and organizational form. It is our aim to encourage greater analysis of sustainability that considers the impact on all stakeholders in the analysis of investment opportunities.