Making Capital Investment Decisions Sustainable
Make informed capex decisions by embedding social and environmental factors into your capital investment appraisal.
BACKGROUND
Capital investments in a changing world
Decisions about capital investment (capex) can involve large sums of money and long time horizons. It’s important to get the appraisal process right.
In today’s world, more business risks are to do with social and environmental issues than ever before. For many industries, the regulatory environment is also shifting to keep up with these risks, placing extra demands on companies to act sustainably.
Capital investment appraisal that only considers financial returns is no longer enough to meet the challenges that companies face.
Making sustainable capital investment decisions
We make better choices when we use the most relevant information. Sustainable capital investment appraisal weighs material social and environmental factors alongside financial and economic factors for better balanced decision making.
Thinking sustainably about capital investment offers commercial value. With a fuller picture of capital investment risks and opportunities, you can achieve material cost savings, lower financing costs, more resilient infrastructure and greater trust from stakeholders.
What next
See our resources below for practical advice at every stage of embedding sustainability into your capital investment appraisal.
Our Essential Guide to Capex includes practical examples, tips and clear advice on identifying material issues, analysing your options and applying decision-making frameworks.
For this technical area, we also took a ‘deep dive’ into methods for integrating social and environmental factors into capital investment. Our research looks at why eight companies decided to make changes, the approaches they used and how they built support.
