Impact with clients
Integrated approach for valuing natural, human and economic capital
ERM’s methodology and decision support tool identified over $1 billion in environmental, social and health benefits to help a leading energy and chemical producer prioritize capital expenditures.
Environmental capital projects were left underfunded because the value of environmental, social, and health impacts was not included in standard financial analysis of the return on investment or present value. Many of the projects involved expenditures of over $200 million and did not exceed the company’s minimum return rate.
ERM’s proven net present value calculation methodology included elements – such as health benefits of emission reductions for workers and local communities, water quality improvements, marine ecosystem services, and reductions in regulatory and reputational costs – to more comprehensively estimate the full return on capital.
Our approach resulted in a significantly improved maturity in prioritizing and making investment decisions and provided long-run value by increasing internal sustainability awareness, increasing the transparency of decision making, and improving reputation with investors and regulators.
The ERM approach is a game changer for helping us meet best-in-class environmental practices