Sustainable Financial Investments: Maximizing Corporate Profits and Long-Term Economic Value Creation

244 Pages·2015·1.029 MB·English

by  Brian Bolton (auth.)

Sustainable Financial Investments

Sustainable Financial
Investments
Maximizing Corporate Profi ts and Long-Term
Economic Value Creation
Brian Bolton
SUSTAINABLE FINANCIAL INVESTMENTS
Copyright © Brian Bolton, 2015.
Softcover reprint of the hardcover 1st edition 2015 978-1-137-41198-3
All rights reserved.
First published in 2015 by
PALGRAVE MACMILLAN®
in the United States—a division of St. Martin’s Press LLC,
175 Fifth Avenue, New York, NY 10010.
Where this book is distributed in the UK, Europe and the rest of the world,
this is by Palgrave Macmillan, a division of Macmillan Publishers Limited,
registered in England, company number 785998, of Houndmills,
Basingstoke, Hampshire RG21 6XS.
Palgrave Macmillan is the global academic imprint of the above companies
and has companies and representatives throughout the world.
Palgrave® and Macmillan® are registered trademarks in the United States,
the United Kingdom, Europe and other countries.
ISBN 978-1-349-57358-5 ISBN 978-1-137-41199-0 (eBook)
DOI 10.1057/9781137411990
Library of Congress Cataloging-in-Publication Data
Bolton, Brian (Professor)
Sustainable fi nancial investments : maximizing corporate profi ts and
long-term economic value creation / Brian Bolton.
pages cm
Includes bibliographical references and index.
1. Social responsibility of business. 2. Corporate profi ts. I. Title.
HD60.B65 2015
658.4(cid:2)08—dc23 2015004827
A catalogue record of the book is available from the British Library.
Design by Newgen Knowledge Works (P) Ltd., Chennai, India.
First edition: August 2015
10 9 8 7 6 5 4 3 2 1
To Mom
To Dad
To my students
All of the author’s proceeds from sales of this book will be donated
to three nonprofi ts, based in Portland, Oregon, that are working
every day to change lives and communities:
The Pixie Project
Providing a unique, personalized approach to pet rescue and
adoption
( www.pixieproject.org )
New Avenues for Youth
Empowering homeless and at-risk youth through hope and
education
( www.newavenues.org )
Forest Park Conservancy
Protecting and supporting the largest urban forest in the
United States
( www.forestparkconservancy.org )

Contents
List of Illustrations i x
Preface x i
1 The Purpose of the Firm 1
Appendix Firms Making Sustainable Financial
Investments 2 0
2 The Role of the Firm’s Stakeholders 2 7
3 The Sustainability of Economics 5 1
4 The Economics of Sustainability 8 7
5 Valuation of Sustainable Financial Investments 1 21
Appendix Valuation of a Rooftop Solar System 1 61
6 A Systems Perspective of the Firm 1 81
7 Economic Development and Sustainable Financial
Investments 2 03
Notes 2 19
Index 2 29
vii

Illustrations
Figure
2.1 Web of Stakeholder Relationships 2 9
Tables
1A.1 Sample Firms Making Sustainable Financial
Investments: Nike, Whole Foods Market,
and Interface 2 4
4.1 Summary of Business Case Value Drivers 1 05
5.1 Comparison of Investment Scenarios: Five Years 1 32
5.2 Security Investment Return Data: 1926–2013 1 37
5.3 Scenario Analysis: Weighted Average Net
Present Value 1 42
5.4 Solyndra Inc.: Financial Results, 2007–2009 1 48
5.5 Comparison of Investment Scenarios: Three Years 1 51
5.6 Long-Term vs. Short-Term Sourcing Valuation 1 54
5A.1 Solar System Base-Case Assumptions 1 66
5A.2 Solar System Valuation 1 70
5A.3 Solar System Scenario Analysis, Assumptions 1 76
5A.4 Solar System Scenario Analysis, Valuation 1 77
5A.5 Solar System Scenario Analysis, Weighted Average
Net Present Value 1 77
5A.6 Solar System Scenario Analysis, Long-Term vs.
Short-Term Assumptions 1 79
6.1 Nike Inc.: 2013 Sustainability Challenges and
Opportunities 1 86
ix