In the latest of our GreenBiz series on how companies can integrate sustainability into their core business strategies, Tensie Whelan and Chisara Ehiemere write about how to make the internal business case for sustainability using our 5-step Return on Sustainability Investment (ROSI) methodology.

Investments in material sustainability initiatives create business value that is often not calculated or tracked. It is important to assess the internal business case for the investments needed to implement or maintain sustainable business initiatives. Incorporating that investment into capital allocation and decision-making processes can increase the amount and the speed of investment.

The Return on Sustainability Investment (ROSI) framework, created by the NYU Stern Center for Sustainable Business (CSB), has been used by companies in a variety of industries as a decision-making tool to unlock investment in sustainability initiatives. The ROSI framework is built on the premise that embedding sustainability at the core of business strategy unlocks improvements through a number of mediating factors: improved risk management, stakeholder engagement, operational efficiency, talent management, supplier relations, media coverage, customer loyalty, sales and marketing, and innovation. These improvements result in revenue growth, greater profitability and higher corporate valuation, ultimately generating an increase in business value and positive societal impact. Unfortunately, this value is often unaccounted for due to data gaps, lack of the finance team’s involvement in accounting for sustainability value and difficulties in monetizing avoided risk.