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Sustainability Real Options

Han Smit

California Management Review2025https://doi.org/10.1177/00081256251331264article
AJG 3ABDC A
Weight
0.44

Abstract

Summary Decision-making on sustainability investment faces two challenges. First, appraisal methods are based on a narrow view of shareholder value and require extensions to support decisions that involve valuable outcomes for society. Second, the consequences of climate change are uncertain. However, firms have real options to adapt, which helps them realize the energy transition. An extended net present value that includes societal real options can assess the value of phasing in renewables (e.g., timing, expansion, and growth options) and phasing out fossil fuels (contraction, abandonment, and switching options). Increased corporate awareness of societal real options value should encourage corporations to act more responsibly.

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https://doi.org/https://doi.org/10.1177/00081256251331264

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@article{han2025,
  title        = {{Sustainability Real Options}},
  author       = {Han Smit},
  journal      = {California Management Review},
  year         = {2025},
  doi          = {https://doi.org/https://doi.org/10.1177/00081256251331264},
}

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Evidence weight

0.44

Balanced mode · F 0.40 / M 0.15 / V 0.05 / R 0.40

F · citation impact0.32 × 0.4 = 0.13
M · momentum0.57 × 0.15 = 0.09
V · venue signal0.50 × 0.05 = 0.03
R · text relevance †0.50 × 0.4 = 0.20

† Text relevance is estimated at 0.50 on the detail page — for your query’s actual relevance score, open this paper from a search result.