Project Initiation: Investment Analysis for Sustainable Development

Project Initiation: Investment Analysis for Sustainable Development

Claudia Weninger (WU Vienna, Austria) and Martina Huemann (WU Vienna, Austria)
DOI: 10.4018/978-1-4666-6268-1.ch001


The consideration of Sustainable Development (SD) becomes more and more important for investments and the projects which implement those investments. In the project initiation process, the decision regarding the realization of an investment is made. Analyzing the investment is one of the main tasks of the project initiation process. Thus, this process is identified as most important for the integration of SD principles. The authors define SD with the following principles: economic, ecologic, and social-orientation; short, mid, and long term orientation as well as local, regional, and global-orientation. Furthermore, SD is value-based and considers values such as transparency, fairness, trust, etc. In this chapter, the authors describe the concept of responsible and ethical investment, which may also provide the basis for an investment decision within a project's initiation. While global project and program management standards show very limited consideration of comprehensive investment analysis, the authors draw on the Logical Framework Approach used by the World Bank to see how SD principles are considered in investment analysis methods. They then propose the integration of SD principles into the discipline of project initiation. This more holistic approach considers the investment life cycle, the consideration of different stakeholders, and investment method, which explicitly integrates SD principles.
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Investment And Project


Different definitions of the term investment exist. Traditionally, the finance sectors defines investments very narrowly as “the purchase of a financial product or other item of value with an expectation of favorable future returns. In general terms, investment means the use of money in the hope of making more money (Webfinance 2010). The business sector describes it as the purchase or development of a product or service with the hope of improving future business (Investorwords 2011). Investments are characterized by a number of payments and can be perceived as long-term investigation in real assets e.g. investments in buildings, machines and also in customer relationships or products (Gareis 2005). Organizations invest in objects because they expect the financial returns from the investment to be greater than the money they invested initially (Mills/Turner 1995: 3).

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