Research Article
Measures for Sustainable Investment Decisions and Business Strategy – A Triple Bottom Line Approach
Maite Cubas-Díaz,
Miguel Ángel Martínez Sedano,
Corresponding Author
Maite Cubas-Díaz
Department of Financial Economics I
Faculty of Economics and Business University of the Basque Country (UPV/EHU), Bilbao, Spain
Correspondence to: Maite Cubas-Díaz.
E-mail: [email protected]
Search for more papers by this authorMiguel Ángel Martínez Sedano
Department of Foundations of Economic Analysis II
Faculty of Economics and Business University of the Basque Country (UPV/EHU), Bilbao, Spain
Search for more papers by this authorMaite Cubas-Díaz,
Miguel Ángel Martínez Sedano,
Corresponding Author
Maite Cubas-Díaz
Department of Financial Economics I
Faculty of Economics and Business University of the Basque Country (UPV/EHU), Bilbao, Spain
Correspondence to: Maite Cubas-Díaz.
E-mail: [email protected]
Search for more papers by this authorMiguel Ángel Martínez Sedano
Department of Foundations of Economic Analysis II
Faculty of Economics and Business University of the Basque Country (UPV/EHU), Bilbao, Spain
Search for more papers by this authorAbstract
Traditionally, most investors have only taken economic variables (profitability and risk) into account when making investment decisions. In this paper we propose two measures, the Relative Sustainable Performance Measure (RSPM) and the Measure of Commitment-failure (MC), that permit sustainable decision making, which takes environmental and social variables into consideration in addition to the economic variables, for both investors and companies themselves. This makes a triple bottom line (TBL) approach to investment decision making possible. We apply our measures to the worldwide chemical sector and validate them. Moreover, we propose a 2D graphical sustainability analysis, which is simple and easy for investors to understand when making investment decisions and can be used if they are concerned about environmental and social matters. It also enables companies to analyse their sustainability performance and adapt their business plans accordingly. Copyright © 2017 John Wiley & Sons, Ltd and ERP Environment
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