Project Implementation in China
The Sustainable Return on Investment (ROI) initiative area builds on the assumption that a considerable number of EMM member companies in emerging markets are actively engaged in various sustainability areas, either through the implementation of own environmental and/or social projects initiatives or the adoption of sustainable business models. In most cases, the direct and/or indirect value generated through such projects surpasses initial project costs, e.g. company engagement for sustainability has a positive return and the investment pays off. Nevertheless, an appropriate documentation and quantification of the impact of sustainability projects is usually not integrated into company-internal reporting procedures, as conventional accounting practices and cost-benefit analysis do not account for non-monetary values and neglect environmental and social benefits. Hence, the rewards of many project initiatives remain concealed and do not generate the recognition and incentives they deserve.
Sustainable ROI methodologies adopt modified techniques, commonly used in financial analysis, to account for these shortcomings. As these techniques incorporate non-cash benefits and externalities of sustainability investments, e.g. positive effects on environment and/or society, transparency and certainty in project planning and evaluation are enhanced. This way of project reporting does not solely rely on monetary values as assessment indicators but also entails principles-based methodologies. In this vein, Sustainable ROI techniques establish an alternative skill set for the measurement and communication of non-financial values created in course of the realization of sustainability projects.
The insights and lessons learnt from these cross-regional and cross-sectoral project implementations will feed into global fora and processes, where they are meant to inspire the formulation of innovative policy approaches.