The business case for sustainability can be built upon: (1.) cost reduction from efficient resource utilisation, (2.) revenue enhancement, (3.) risk management, and (4.) intangible assets (Esty and Winston 2009). However, executives often adopt a short-term perspective owing to executive compensation, investor pressure, and decision-making criteria tied to fixed financial reporting systems. We propose an integrated conceptual framework which highlights how firms could embed environment and sustainability into their long-term financial decision-making framework. To give this goal structure, the firm could adopt: (1.) longer-term executive compensation plans, (2.) longer-term financial reporting, and (3.) flexible financial decision-making models which embed intangibles.
Siegrist, M., Bowman, G., Mervine, E. M., & Southam, C. (2020). Embedding Environment and Sustainability into Corporate Financial Decision-making. Accounting and Finance, 60(1), 129-147. https://doi.org/10.1111/acfi.12533