This case presents a framework for making the business case for a sustainability initiative. It provides a tool and a language for sustainability-related projects to speak to the finance suite and the board. The perspective for quantifying the economic benefits of sustainability projects demonstrates how organizations enhance traditional financial models (such as Net Present Value (NPV) type of discounted cash flow models) by incorporating metrics that capture the strategic benefits of sustainability projects.
The context is a fashion company’s analysis of the costs and strategic benefits of sourcing sustainable raw materials for apparel production. The case first shows how costly such an initiative could be, and could undermine firm financial statements. It proceeds to identify the strategic benefits of the project and quantify them in tangible form to allow a methodical evaluation of the project. It concludes by illustrating that what is economically quantifiable is often also justifiable.
•Explaining the concept of NPV+, a structured framework for quantifying the strategic benefits of sustainability projects in tangible form.
•Identifying stakeholder-driven value in sustainability projects
•Applying NPV+ to SMCP’s sustainable sourcing initiative
•Exploring the implications for financial modeling and decision-making in a “sustainability disrupted” business context.
- Sustainability
- Responsible Business
- Procurement
- Sourcing, Finance, NPV, Externalities
- SDG12 Responsible Consumption and Production
- SDG13 Climate Action
- Q32025
