AFFI International Conference 2017

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Measures for Sustainable Investment Decision Making - A Triple Bottom Line Approach

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Traditionally, most investors have only taken economic variables (profitability and risk) into account when making investment decisions. In this paper we propose two measures, the Relative Sustainable Performance Measure (RSPM) and the Measure of Commitment-failure (MC), that permit sustainable investment decision making, which takes environmental and social variables into consideration, in addition to the economic variables. This makes a Triple Bottom Line (TBL) approach to investment decision making possible. We apply our measures to the worldwide chemical sector and validate them. Moreover, we propose a 2D Graphical Sustainability Analysis, which is simple and easy for investors to understand when making investment decisions and can be used if they are concerned about environmental and social matters.


Maite Cubas-Díaz    
University of the Basque Country (UPV/EHU)

Miguel Ángel Martínez Sedano    
University of the Basque Country (UPV/EHU)


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