Evaluation of Decision-Making for the Optimal Value of Sustainable Enterprise Development under Global 100 Index Thinking

Tyrone Lin,Chiao-Chen Chang,Shu-Yen Hsu

doi:10.3390/su11041106

Tyrone Lin, Chiao-Chen Chang + Show 1 more

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https://doi.org/10.3390/su11041106

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Abstract

This study seeks the best economic returns of a company’s sustainable business process, employs the Triple Bottom Line Model using the Global 100 Index as the decision variable, and follows the Geometric Brownian Motion, so as to determine the optimal timing for the input of environmental and social costs. The results of the sensitivity analysis show that when the average growth rate of the Global 100 Index is low, the optimal timing for the company’s input of environmental costs and social costs can be obtained. Analysis of the numerical example shows that, based on the financial value of the economic factor, companies should invest in environmental costs as soon as possible. This study replaces the conventional net present value model with the options evaluation model, uses the Global 100 Index as the threshold for decision-making evaluation to provide a more complete decision-making evaluation reference for enterprises, and makes up for the gap in recent research regarding investment time and decision variables. The study results introduce potential strategic value evaluations into the evaluation model of long-term uncertain sustainable operation value, which is more appropriate for the evaluation of the real sustainable operation value. It also provides implementation strategies for decision-makers to mitigate risks under uncertain environments and is the major difference and value of the Real Options Approach (ROA) to supplement Net Present Value (NPV) principles. The results of this study provide a reference for the sustainable development decision-making of corporate sustainability and feasibility and offer an important link in the value chain of food industry operations and management.

Highlights

When companies pursue sustainable operations to gain financial benefits, environmental protection and corporate social responsibility (CSR) are necessary conditions for the company to undertake
The Global 100 Index is used as a decision variable and its changes follow GBM, where the average growth rate is α, the rate of change is σ, and the change in unit time is subject to the Standard Wiener Process
Considering the economic aspect, the company first invests in the environmental facet during the stage 1 (t1∗) and invests in the social facet during the stage 2 (t2∗)

Summary

Introduction

When companies pursue sustainable operations to gain financial benefits, environmental protection and corporate social responsibility (CSR) are necessary conditions for the company to undertake. Environmental policies, such as social and regulatory responsibilities, are the basic principles of CSR that link environmental performance [1]. Many corporations have instituted plans for the reduction of their product carbon footprints. Global and sustainable packaging trends in 2016 included the use of 100% bio-based plastics, PET, the reduction of carbon footprints, using a green supply chain, reducing packaging waste, using edible packaging materials, and the development of bio-plastics. The environmental impact of reducing product packaging has become the first requirement for corporations’ sustainable business [4]

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