IDEAS home Printed from https://ideas.repec.org/a/gam/jsusta/v10y2018i3p649-d134059.html
   My bibliography  Save this article

Comparison of Sustainable Environmental, Social, and Corporate Governance Value Added Models for Investors Decision Making

Author

Listed:
  • Marie Pavláková Dočekalová

    (Department of Economics, Faculty of Business and Management, Brno University of Technology, Kolejní 4, Brno 61200, Czech Republic)

  • Alena Kocmanová

    (Department of Economics, Faculty of Business and Management, Brno University of Technology, Kolejní 4, Brno 61200, Czech Republic)

Abstract

The Sustainable Value-Added Model is a new approach in value-oriented strategic management that focuses on maximizing the value that is created by non-financial sustainability indicators. The objective of this paper is to refine the calculation of sustainable added value by incorporating environmental, social, and corporate governance sustainability indicators, assigning weights to the indicators and, by alternative methods, assigning target values to the indicators. Ten alternative models of Sustainable Environmental, Social, and Corporate Governance Value Added were created. The models encompass 11 environmental, social, and corporate governance indicators of sustainability, and two economic indicators (Earnings before Interest, Taxes, Depreciation and Amortization, and Value Added). Indicator values are related to the target values that represent the opportunity costs. The quality of the models was assessed by statistical methods, i.e., the Receiver Operating Characteristic curve, Gini index, and Kolmogorov-Smirnov statistic. The results of these statistics show sufficient quality of all the models proposed. The most accurate model is that with the economic indicator Value Added and target values that are based on the values of the company with the best economic results.

Suggested Citation

  • Marie Pavláková Dočekalová & Alena Kocmanová, 2018. "Comparison of Sustainable Environmental, Social, and Corporate Governance Value Added Models for Investors Decision Making," Sustainability, MDPI, vol. 10(3), pages 1-13, February.
    • Handle: RePEc:gam:jsusta:v:10:y:2018:i:3:p:649-:d:134059
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2071-1050/10/3/649/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2071-1050/10/3/649/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Tobias Hahn & Frank Figge & Ralf Barkemeyer, 2007. "Sustainable Value creation among companies in the manufacturing sector," International Journal of Environmental Technology and Management, Inderscience Enterprises Ltd, vol. 7(5/6), pages 496-512.
    2. Ang, Frederic & Van Passel, Steven, 2010. "The Sustainable Value approach: A clarifying and constructive comment," Ecological Economics, Elsevier, vol. 69(12), pages 2303-2306, October.
    3. Alena Kocmanová & Marie Pavláková Dočekalová & Stanislav Škapa & Lenka Širáňová, 2016. "Measuring Corporate Sustainability and Environmental, Social, and Corporate Governance Value Added," Sustainability, MDPI, vol. 8(9), pages 1, September.
    4. Frank Figge & Tobias Hahn, 2005. "The Cost of Sustainability Capital and the Creation of Sustainable Value by Companies," Journal of Industrial Ecology, Yale University, vol. 9(4), pages 47-58, October.
    5. Francesco Perrini & Antonio Tencati, 2006. "Sustainability and stakeholder management: the need for new corporate performance evaluation and reporting systems," Business Strategy and the Environment, Wiley Blackwell, vol. 15(5), pages 296-308, September.
    6. Frank Figge & Tobias Hahn, 2004. "Sustainable Value Added: ein neues Maß des Nachhaltigkeitsbeitrags von Unternehmen am Beispiel der Henkel KGaA," Vierteljahrshefte zur Wirtschaftsforschung / Quarterly Journal of Economic Research, DIW Berlin, German Institute for Economic Research, vol. 73(1), pages 126-141.
    7. Krajnc, Damjan & Glavic, Peter, 2005. "How to compare companies on relevant dimensions of sustainability," Ecological Economics, Elsevier, vol. 55(4), pages 551-563, December.
    8. Sanjay Sharma & Irene Henriques, 2005. "Stakeholder influences on sustainability practices in the Canadian forest products industry," Strategic Management Journal, Wiley Blackwell, vol. 26(2), pages 159-180, February.
    9. Kuosmanen, Timo & Kuosmanen, Natalia, 2009. "How not to measure sustainable value (and how one might)," Ecological Economics, Elsevier, vol. 69(2), pages 235-243, December.
    10. William W. Cooper & Lawrence M. Seiford & Kaoru Tone, 2006. "Introduction to Data Envelopment Analysis and Its Uses," Springer Books, Springer, number 978-0-387-29122-2, June.
    11. Peterson, A. Townsend & Papeş, Monica & Soberón, Jorge, 2008. "Rethinking receiver operating characteristic analysis applications in ecological niche modeling," Ecological Modelling, Elsevier, vol. 213(1), pages 63-72.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Figge, Frank & Hahn, Tobias & Barkemeyer, Ralf, 2014. "The If, How and Where of assessing sustainable resource use," Ecological Economics, Elsevier, vol. 105(C), pages 274-283.
    2. Ang, Frederic & Van Passel, Steven & Mathijs, Erik, 2011. "An aggregate resource efficiency perspective on sustainability: A Sustainable Value application to the EU-15 countries," Ecological Economics, Elsevier, vol. 71(C), pages 99-110.
    3. María D. López‐Gamero & Patrocinio Zaragoza‐Sáez & Enrique Claver‐Cortés & José F. Molina‐Azorín, 2011. "Sustainable development and intangibles: building sustainable intellectual capital," Business Strategy and the Environment, Wiley Blackwell, vol. 20(1), pages 18-37, January.
    4. Miriam Jankalová & Jana Kurotová, 2019. "Sustainability Assessment Using Economic Value Added," Sustainability, MDPI, vol. 12(1), pages 1-19, December.
    5. Paolo Cupo & Rinalda Alberta Di Cerbo, 2016. "The determinants of ranking in sustainable efficiency of Italian farms," RIVISTA DI STUDI SULLA SOSTENIBILITA', FrancoAngeli Editore, vol. 2016(2), pages 141-159.
    6. Merante, Paolo & Van Passel, Steven & Pacini, Cesare, 2015. "Using agro-environmental models to design a sustainable benchmark for the sustainable value method," Agricultural Systems, Elsevier, vol. 136(C), pages 1-13.
    7. Pacini, G. Cesare & Merante, Paolo & Lazzerini, Giulio & Van Passel, Steven, 2015. "Increasing the cost-effectiveness of EU agri-environment policy measures through evaluation of farm and field-level environmental and economic performance," Agricultural Systems, Elsevier, vol. 136(C), pages 70-78.
    8. Zhou, P. & Ang, B.W. & Wang, H., 2012. "Energy and CO2 emission performance in electricity generation: A non-radial directional distance function approach," European Journal of Operational Research, Elsevier, vol. 221(3), pages 625-635.
    9. Juliane Peters & Ana Simaens, 2020. "Integrating Sustainability into Corporate Strategy: A Case Study of the Textile and Clothing Industry," Sustainability, MDPI, vol. 12(15), pages 1-35, July.
    10. Tze San Ong & Boon Heng Teh & Ah Suat Lee, 2019. "Contingent Factors and Sustainable Performance Measurement (SPM) Practices of Malaysian Electronics and Electrical Companies," Sustainability, MDPI, vol. 11(4), pages 1-33, February.
    11. Hsiao-Yen Mao & Wen-Min Lu & Hsin-Yen Shieh, 2023. "Exploring the Influence of Environmental Investment on Multinational Enterprises’ Performance from the Sustainability and Marketability Efficiency Perspectives," Sustainability, MDPI, vol. 15(10), pages 1-23, May.
    12. Alena Kocmanová & Marie Pavláková Dočekalová & Stanislav Škapa & Lenka Širáňová, 2016. "Measuring Corporate Sustainability and Environmental, Social, and Corporate Governance Value Added," Sustainability, MDPI, vol. 8(9), pages 1, September.
    13. Van Passel, Steven & Nevens, Frank & Mathijs, Erik & Van Huylenbroeck, Guido, 2007. "Measuring farm sustainability and explaining differences in sustainable efficiency," Ecological Economics, Elsevier, vol. 62(1), pages 149-161, April.
    14. Moretti, Michele & Vanschoenwinkel, Janka & Van Passel, Steven, 2021. "Accounting for externalities in cross-sectional economic models of climate change impacts," Ecological Economics, Elsevier, vol. 185(C).
    15. Bazyli Czyżewski & Marta Guth, 2021. "Impact of Policy and Factor Intensity on Sustainable Value of European Agriculture: Exploring Trade-Offs of Environmental, Economic and Social Efficiency at the Regional Level," Agriculture, MDPI, vol. 11(1), pages 1-19, January.
    16. Rainer Lueg & Maria Medelby Pedersen & Søren Nørregaard Clemmensen, 2015. "The Role of Corporate Sustainability in a Low‐Cost Business Model – A Case Study in the Scandinavian Fashion Industry," Business Strategy and the Environment, Wiley Blackwell, vol. 24(5), pages 344-359, July.
    17. Kuosmanen, Timo & Kuosmanen, Natalia, 2009. "How not to measure sustainable value (and how one might)," Ecological Economics, Elsevier, vol. 69(2), pages 235-243, December.
    18. Jason West, 2015. "Capital valuation and sustainability: a data programming approach," Review of Quantitative Finance and Accounting, Springer, vol. 45(3), pages 591-608, October.
    19. Emilia Madudova & Tatiana Čorejova & Marek Valica, 2018. "Economic Sustainability in a Wider Context: Case Study of Considerable ICT Sector Sub-Divisions," Sustainability, MDPI, vol. 10(7), pages 1-16, July.
    20. Poisson-de Haro, Serge & Bitektine, Alex, 2015. "Global sustainability pressures and strategic choice: The role of firms’ structures and non-market capabilities in selection and implementation of sustainability initiatives," Journal of World Business, Elsevier, vol. 50(2), pages 326-341.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jsusta:v:10:y:2018:i:3:p:649-:d:134059. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.