IDEAS home Printed from https://ideas.repec.org/a/wly/corsem/v27y2020i2p815-824.html
   My bibliography  Save this article

Corporate sustainability and stakeholder value trade‐offs in project selection through optimization modeling: Application of investment banking

Author

Listed:
  • Shamsiya Kudratova
  • Xiaoxia Huang
  • Khikmatullo Kudratov
  • Shohrukh Qudratov

Abstract

This study presents a new optimization model for quantitative sustainability measurement in net present value estimation process of corporate investments. Proposed model presents an innovative perspective for the transformation of the logic behind traditional investment project selection practices to the sustainable project selection in corporations. By using the proposed model, it is possible that investors' can find positive sustainability trade‐offs without harming returns on investment. A case study is presented to illustrate the applicability of the proposed model in project selection decision‐making processes. Expected net present value is employed to calculate the return of the project investment for project selection decision‐stage. In order to identify stakeholder value trade‐off gaps, proposed model with sustainability involvement is evaluated in contrast to the traditional net value method estimations of the model. Based on optimization results, comparative analysis of proposed sustainability cost involvement in net present value estimation with traditional net present value estimation in project selection practices restore positive trade‐offs verifying the efficiency of proposed methodology.

Suggested Citation

  • Shamsiya Kudratova & Xiaoxia Huang & Khikmatullo Kudratov & Shohrukh Qudratov, 2020. "Corporate sustainability and stakeholder value trade‐offs in project selection through optimization modeling: Application of investment banking," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 27(2), pages 815-824, March.
  • Handle: RePEc:wly:corsem:v:27:y:2020:i:2:p:815-824
    DOI: 10.1002/csr.1846
    as

    Download full text from publisher

    File URL: https://doi.org/10.1002/csr.1846
    Download Restriction: no

    File URL: https://libkey.io/10.1002/csr.1846?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Rodrigo Lozano, 2015. "A Holistic Perspective on Corporate Sustainability Drivers," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 22(1), pages 32-44, January.
    2. World Commission on Environment and Development,, 1987. "Our Common Future," OUP Catalogue, Oxford University Press, number 9780192820808.
    3. Meryem Masmoudi & Fouad Ben Abdelaziz, 2018. "Portfolio selection problem: a review of deterministic and stochastic multiple objective programming models," Annals of Operations Research, Springer, vol. 267(1), pages 335-352, August.
    4. Sojin Jung & Jung Ha‐Brookshire, 2017. "Perfect or Imperfect Duties? Developing a Moral Responsibility Framework for Corporate Sustainability from the Consumer Perspective," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 24(4), pages 326-340, July.
    5. Tarja Ketola, 2010. "Five leaps to corporate sustainability through a corporate responsibility portfolio matrix," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 17(6), pages 320-336, November.
    6. Carin Labuschagne & Alan C. Brent & Schalk J. Claasen, 2005. "Environmental and social impact considerations for sustainable project life cycle management in the process industry," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 12(1), pages 38-54, March.
    7. Giorgos Papagiannakis & Irini Voudouris & Spyros Lioukas, 2014. "The Road to Sustainability: Exploring the Process of Corporate Environmental Strategy Over Time," Business Strategy and the Environment, Wiley Blackwell, vol. 23(4), pages 254-271, May.
    8. Jérôme Detemple, 2014. "Portfolio Selection: A Review," Journal of Optimization Theory and Applications, Springer, vol. 161(1), pages 1-21, April.
    9. Tobias Hahn & Frank Figge & Jonatan Pinkse & Lutz Preuss, 2010. "Trade‐offs in corporate sustainability: you can't have your cake and eat it," Business Strategy and the Environment, Wiley Blackwell, vol. 19(4), pages 217-229, May.
    10. Rodrigo Lozano, 2013. "Are Companies Planning their Organisational Changes for Corporate Sustainability? An Analysis of Three Case Studies on Resistance to Change and their Strategies to Overcome it," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 20(5), pages 275-295, September.
    11. Lopez, Ramon E. & Anriquez, Gustavo & Gulati, Sumeet, 2007. "Structural change and sustainable development," Journal of Environmental Economics and Management, Elsevier, vol. 53(3), pages 307-322, May.
    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. Philipp Haessler, 2020. "Strategic Decisions between Short-Term Profit and Sustainability," Administrative Sciences, MDPI, vol. 10(3), pages 1-31, September.
    2. Ana T. Ejarque & Vanessa Campos, 2020. "Assessing the Economy for the Common Good Measurement Theory Ability to Integrate the SDGs into MSMEs," Sustainability, MDPI, vol. 12(24), pages 1-17, December.
    3. Tobias Hahn & Jonatan Pinkse & Lutz Preuss & Frank Figge, 2015. "Tensions in Corporate Sustainability: Towards an Integrative Framework," Journal of Business Ethics, Springer, vol. 127(2), pages 297-316, March.
    4. Arménio Rego & Miguel Pina e Cunha & Daniel Polónia, 2017. "Corporate Sustainability: A View From the Top," Journal of Business Ethics, Springer, vol. 143(1), pages 133-157, June.
    5. Aisma Linda Kiesnere & Rupert J. Baumgartner, 2019. "Sustainability management emergence and integration on different management levels in smaller large‐sized companies in Austria," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 26(6), pages 1607-1626, November.
    6. Catherine Le Roux & Marius Pretorius, 2016. "Conceptualizing the Limiting Issues Inhibiting Sustainability Embeddedness," Sustainability, MDPI, vol. 8(4), pages 1-22, April.
    7. Ozgur Isil & Michael T. Hernke, 2017. "The Triple Bottom Line: A Critical Review from a Transdisciplinary Perspective," Business Strategy and the Environment, Wiley Blackwell, vol. 26(8), pages 1235-1251, December.
    8. Annina Lattu & Yuzhuo Cai, 2020. "Tensions in the Sustainability of Higher Education—The Case of Finnish Universities," Sustainability, MDPI, vol. 12(5), pages 1-15, March.
    9. Juan Abello-Romero & Claudio Mancilla & Walter Sáez & Francisco Ganga-Contreras & Ivette Durán-Seguel, 2023. "Sustainable Development and Corporate Sustainability of Chilean State Universities: Evidence from Their Strategic Elements," Sustainability, MDPI, vol. 15(14), pages 1-16, July.
    10. Rodrigo Lozano, 2020. "Analysing the use of tools, initiatives, and approaches to promote sustainability in corporations," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 27(2), pages 982-998, March.
    11. Lin Wu & Nachiappan Subramanian & Angappa Gunasekaran & Muhammad Dan‐Asabe Abdulrahman & Kulwant Singh Pawar & Des Doran, 2018. "A two‐dimensional, two‐level framework for achieving corporate sustainable development: Assessing the return on sustainability initiatives," Business Strategy and the Environment, Wiley Blackwell, vol. 27(8), pages 1117-1130, December.
    12. Francesco Rosati & Lourenço Galvão Diniz Faria, 2019. "Business contribution to the Sustainable Development Agenda: Organizational factors related to early adoption of SDG reporting," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 26(3), pages 588-597, May.
    13. Kazunori Kobayashi & Gabriel Eweje & David Tappin, 2018. "Employee wellbeing and human sustainability: Perspectives of managers in large Japanese corporations," Business Strategy and the Environment, Wiley Blackwell, vol. 27(7), pages 801-810, November.
    14. Chung‐Wha (Chloe) Ki & Sze Man Chong & Jung E. Ha‐Brookshire, 2020. "How fashion can achieve sustainable development through a circular economy and stakeholder engagement: A systematic literature review," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 27(6), pages 2401-2424, November.
    15. Cory Searcy, 2016. "Measuring Enterprise Sustainability," Business Strategy and the Environment, Wiley Blackwell, vol. 25(2), pages 120-133, February.
    16. Markus Beckmann & Stefan Hielscher & Ingo Pies, 2014. "Commitment Strategies for Sustainability: How Business Firms Can Transform Trade‐Offs Into Win–Win Outcomes," Business Strategy and the Environment, Wiley Blackwell, vol. 23(1), pages 18-37, January.
    17. Jesús Morcillo-Bellido & Luis Isasi-Sanchez & Isabel Garcia-Gutierrez & Alfonso Duran-Heras, 2021. "Model Based Analysis of Innovation in Sustainable Supply Chains," Sustainability, MDPI, vol. 13(9), pages 1-20, April.
    18. Tarja Ketola, 2014. "Rationale, Morals, and Needs Pyramid for Corporate Responsibility Development," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 21(4), pages 228-239, July.
    19. Natacha Klein & Tomás B. Ramos & Pauline Deutz, 2022. "Factors and strategies for circularity implementation in the public sector: An organisational change management approach for sustainability," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 29(3), pages 509-523, May.
    20. Syed Awais Ahmad Tipu, 2022. "Organizational change for environmental, social, and financial sustainability: A systematic literature review," Review of Managerial Science, Springer, vol. 16(6), pages 1697-1742, August.

    More about this item

    Statistics

    Access and download statistics

    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:wly:corsem:v:27:y:2020:i:2:p:815-824. 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: Wiley Content Delivery (email available below). General contact details of provider: https://doi.org/10.1002/(ISSN)1535-3966 .

    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.