Achievement of the sustainability goals: assessment of the efficiency

Abstract

Purpose: to propose a new method for assessing the integral effectiveness of achieving the company’s sustainability goals, including economic, social and environmental ones. Discussion: under the influence of stakeholders, modern companies include in their strategy more social responsibility issues. Over the last decades a new type of corporate reporting, the sustainability reports, has been formed. The existing attempts to assess the effectiveness of achieving such a set of goals have common drawbacks: unproved ratios between economic, social and environmental components, and the loss of economic sense of the resulting complex score. Results: based on arbitrage portfolio theory and risk-neutral assessments, we propose adjusting the yield for the contribution of environmental and social variables as the risk factors. Due to the limitations of available data, we have chosen a workaround – to assess the influence of sustainability factors on the beta coefficients.