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Sustainability Discount Rates

  • Yonghyup OhEmail author
Chapter
Part of the SpringerBriefs in Finance book series (BRIEFSFINANCE)

Abstract

This chapter discusses capital that produces sustainability and how to find the rates to discount future sustainability cashflows of business. With sustainability cashflows, the return-risk profile of business would change, which would eventually modify the capital structure of the business and consequently its discount rates. It maintains the view that the discount rates are market-driven, and the transition to new discount rates will be slow and gradual.

Keywords

Sustainability capital Sustainability discount rates Capital structure CAPM 

Cited Works

  1. Copeland, T., Koller, T., & Murrin, J. (1990). Valuation: Measuring and managing the value of companies. Wiley.Google Scholar
  2. Lopez, H. (2008). The social discount rate: Estimates for nine Latin American countries. The World Bank Policy Research Working Paper. 4639.Google Scholar
  3. Nordhaus, W. D. (1994). Managing the global commons: The economics of climate change. Cambridge MA: The MIT Press.Google Scholar
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Further Readings

  1. Arrow, K. (1959). Towards a theory of price adjustment. In M. Abramovitz (Ed.), Allocation of economic resources: Essays in Hornor of Bernard Francis Haley (pp. 41–51). Stanford: Stanford University Press.Google Scholar
  2. Arrow, K. J., Cropper, M., Gollier, C., Groom, B., Heal, G., Newell, R., … Weitzman, M. (2012). How should benefits and costs be discounted in an intergenerational context? The views of an expert panel. RFF Discussion Paper, 12(53).Google Scholar
  3. Figge, F., & Hahn, T. (2005). The cost of sustainability capital and the creation of sustainable value by companies. Journal of Industrial Ecology, 9(4), 47–58.CrossRefGoogle Scholar
  4. Garnaut, R. (2008). The garnaut climate change review. Melbourne: The Cambridge University Press.Google Scholar

Copyright information

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2019

Authors and Affiliations

  1. 1.University of AntwerpAntwerpenBelgium

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