The Benefit Side of Environmental Activities and the Connection with Company Value

Abstract

Sustainability has become one of today's most frequently used terms and is included in a growing number of documents. Before an environmental investment decision can be made, companies have to analyse not only the cost but related benefits. Benefits originating from environmental activities have higher importance. Environmental management accounting focuses much more on the cost side of the environmental activities than on benefits. Environmental benefits are often regarded as cost reduction only or some very limited opportunity for creating revenues. However, the profitability of environmental activities represents a very important opportunity for firms. As can be seen in this paper, the positive effect of an environmental activity involves more areas and is less tangible such as higher brand value, competitive advantages and lower operational costs. But how can these elements be measured and how much influence do they have on company value? This is the main question discussed.