Primary Functions
- Calculate financial return on sustainability investments by better evaluating and mitigating environmental and social risks.
Detailed Description
IFC developed the FV Tool to help companies identify the optimum sustainability investment portfolio to deliver maximum business and social value.
Independent research in the extractive sector shows that prudent, local sustainability investments can be critical to ensuring on-time and on-budget project completion in addition to creating community benefits. In a study of 190 oil and gas projects, Goldman Sachs found that over 70% of delays were caused by stakeholder-related sustainability issues, more than commercial or technical factors. Accenture found that 33% of these projects were over budget by 25% or more due to unforeseen delays.
The FV Tool allows an organization to test whether its sustainability initiatives will effectively create or protect value for a project and, most importantly, manage risks that could negatively impact project completion and ongoing business operations. And because it uses a data-driven methodology, Return on Investment is expressed in the quantifiable metric of Net Present Value (NPV), which enables sustainability budgets to more effectively compete with other corporate priorities.
