ABSTRACT
Once the leadership has established the corporation's sustainability strategy, it needs to implement that strategy through the effective use of various management systems. This chapter discusses the capital investment decision systems, costing systems, and risk assessment systems. It looks at other organizational systems for sustainability, including systems for performance measurement, evaluation, incentive and reward, internal and external reporting, and verification. The analyses of risks, costs, and benefits related to social, environmental, and economic investment decisions are more complex because of the nature and timing of social, environmental, and economic costs and benefits. Regulatory requirements are the driving force behind many capital investment decisions. Small and medium enterprises (SMEs) make little use of sophisticated capital budgeting techniques. Within a cost-management and decision-making framework, companies must distinguish and account for three categories of social, environmental, and economic costs: costs related to past operations; current costs related to current operations; and future costs related to current operations.
