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How Investors CAn Quantify An Ethical or Sustainable Company’s Impact

A challenging aspect of determining company value or impact on humanity is understanding how to replace opinion with universal governing principles. Ethics are individualized and inconsistent across groups and societies. Finding common ground is necessary if projects like developing ethical companies and carrying out sustainable investment opportunities are to take place. 

It is a universal concept not to harm and to treat others how one wants to be treated. Ethical investors follow The Golden Rule to make it easier to detach from ethical biases and personal viewpoints and to use it as part of their formula to quantify a company’s total impact. With The Golden Rule as a foundational principle, ethical investors can begin assessing the human impact of company behavior using measurable values.

The U.S. dollar represents the degree of damage or benefit that various issues are worth. Theoretically, placing a dollar amount on each influence a company displaces on humanity allows investors to assess the company’s ethical value. By applying the Golden Rule, ethical investors can place company behaviors on one scale, which can be consistently measured in metric terms. For more information on how investors quantify ethical or sustainable companies and their impacts, continue reading. 

The Quantification Process: Basic Specifications 

To determine a company’s aggregate worth, an analysis must take place using relative values represented by U.S. Dollars. In ethical investing, “M” means “Millions,” the letter “B” represents “Billions,” and “T” equals “Trillions.” The specifics that go into quantifications are best left to seasoned firms that understand how to determine a dollar amount per activity and the impact of ethical or sustainable companies.

With that said, the general framework for assessing various company activity impacts can be explained using simple math. For instance, say that companies’ actions are estimated at $3 of benefit for investors, but as a result of these actions, $4 of destruction is created for society. Investors can then justify that the accumulation of a negative $1 net impact is reason not to pursue working with said ethical or sustainable companies. 

Why Dollars Are Used To Quantify Ethical Or Sustainable Companies’ Impact 

Quantitative analysis is a calculation of the company’s economic value based on various factors, including financial metrics, as well as the benefits and damages it brings to society. Multiple variables are included in the calculation, such as the value to investors, consumers, employees, and to society. 

Dollar values represent the total worth of ethical or sustainable companies to humanity, which regards investors, employees, consumers, and society. Using a mathematical approach to represent what is going on, investors can come to a single dollar amount that reflects a company’s total value. 

Break Down Big Ideas To Make Smarter Investment Decisions 

When big ideas are broken down into objective concepts, they are easier to understand and use rational decision-making to consider the collective. Quantification is one such process that ethical investors can use to assess ethical or sustainable companies and ultimately decide if following through with these investments are wise decisions for everyone affected. 

 

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