Towards risk-conscious investment decision-making and value creation

Investments are vital to a company's future and must be carefully planned to deliver both immediate and long-term benefits. Hence, a company's ability to communicate the impact and risks of an investment to local society, people, investors and other stakeholders can provide a competitive advantage. The keys to future success are investments where value is not only expressed in terms of money, but also in terms of sustainability, reliability, safety, quality, social acceptability and other typically intangible criteria. The wider value perspective has rarely been included in such assessments up to now. This is mainly because these value elements are typically difficult to measure solely in economic terms, and there is thus a lack of models and approaches by which to address the importance of such indirect and intangible impacts. In addition, there is often pressure to demonstrate short-term effects rather than to emphasize the investment's entire life cycle. The purpose of this workbook is to support companies in their aim to make successful and risk-conscious investment decisions and to incorporate the wider value perspective into their investment decision-making. From this perspective, it will enhance companies' abiilities to plan investment process, to assess investments and to support the related decision-making in a systematic manner. The procedures described are not tied to any specific firm or branch of industry. However, the subject matter concerns, in the first place, companies that aim to generate social and environmental impact alongside financial return to investments. The workbook is aimed at all managers and staff involved in investment planning and decision-making, strategy and business development. The workbook is based on the results of MittaMerkki, a Tekes research project funded by the New Value Creation call. The project was carried out between 2015 and 2016 in close cooperation between the VTT Technical Research Centre of Finland Ltd and the University of Vaasa, as well as four companies from various sectors of industry and service business in Finland: TVT Asunnot Ltd, Jyväskylän Energia Ltd, TEAK Ltd and Humming World Ltd.