Companies can measure the value of sustainability and how their environmental efforts directly contribute to profits, using two evaluation methods described in a report by PricewaterhouseCoopers.

The cost of sustainability programs are readily apparent, PwC said. And companies are typically able to determine the short-term value from cost savings, risk reduction or product and service innovations. Putting a dollar value on intangible benefits, especially those over a long period of time, is where companies struggle, the consultancy said.

Sustainability Valuation: An Oxymoron? outlines a direct and indirect approach (see graphics) companies can use to put a value on sustainability, including long term, difficult-to-quantify benefits.

The direct approach looks at the profit and loss impact of sustainability initiatives. The indirect method does recognize that sustainability initiatives create shareholder value. But it’s not directly connected to profits and losses. Instead, it uses a methodology called multi-attribute utility analysis, which has been widely adopted by government agencies for public policy decisions.

Continue reading @ PwC Report: How Companies Can Put a Dollar Value on Sustainability · Environmental Management & Energy News · Environmental Leader.