There's growing interest among financeexecutives in getting a handle on the value of sustainabilityinitiatives, instead of just using those efforts to meet regulatoryrequirements or generate good public relations. And some are takingthe next steps—prioritizing initiatives and allocating capitalbased on those decisions.

“They're moving away from looking at this as just a requirement,but rather as something that brings value to the table,” says HervéKieffel, a principal in PwC's sustainability valuationpractice.

At the same time, companies trying to put numbers on theirsustainability initiatives face significant challenges, and asubstantial number of businesses are far less advanced in theirapproach to measuring the results of sustainabilityinitiatives.

Those are some of the findings of a recent survey of 1,400corporate executives, conducted by professional services giant PwCduring the firm's August webcast about sustainabilityvaluation.

About one-third of the webcast attendees were CFOs and otherfinance executives, which was a significant change from the yearbefore, according to Kieffel. “A larger and larger number ofexecutives in finance are looking at sustainability in terms of,'What's in it for me?'” he says. “They want to understand how theseinitiatives help the environment, but also have a return oninvestment.” In fact, 31% of respondents said they're interested inquantifying the impact of sustainability on shareholder value.

According to Kieffel, the ability to allocateresources to sustainability initiatives involves three steps.First, companies need to understand the value of their efforts,using a framework that allows them to identify value drivers andthen measure and monetize the results. Once businesses have thatframework in place, they then can move to the next phase,prioritizing those initiatives. The last stage involvesmaking real budgeting decisions, based on the list of prioritiesalready established.

For a significant number of companies (36%) surveyed, theprioritization process presents a particular challenge. According to Kieffel, that's largely because they're wrestling withhow to consider not just direct cost savings of initiatives—say,efforts to reduce water usage—but also indirect results, such ascreating better relations with the surrounding community. “You haveto figure out a way to compare these areas, so it's not apples andoranges—initiatives with clear cost savings vs. those with nodirect financial benefits,” he says.

In fact, for many companies, while direct costs savings areimportant, indirect impacts also are crucial considerations.Twenty-five percent cited the effect on the environment as the mostcrucial factor, while 24% say talent, corporate know how, andretention are key, and 16% cite local community and mediaperception.

Respondents cited a number of specific approaches they use toquantify the value derived from sustainability initiatives. Top onthe list was “aggregating cost savings,” which was cited by 24.2%,which 16.3% said “measuring total value generated, includingindirect benefits in dollar terms.”

The survey also revealed a significant difference incorporations' maturity levels regarding their approach tosustainability measurement. “There's a broad divergence betweenleaders and laggards,” says Kieffel. For example, 10% are in theprocess of budgeting and allocating capital to initiatives, but 39%haven't attempted any valuation at all.