First, certain benefits and synergies relating to improved
social and environmental performance might be penalised
by DCFs, particularly with larger outlay and longer payback
periods. When comparing sustainable options versus their
less sustainable alternatives, DCF analysis presumes that the
“do not invest” scenario equals a continuation of current cash
flow stream. In a competitive sustainability-related environment
fraught with potential legislative impacts and continual strategic
innovation, maintenance of status quo becomes increasingly
difficult to justify. What might be initially considered a
favourable alternative could eventuate in a declining cash
flow stream and an overstated net present value (NPV).