Article: Friday, 17 November 2023
A concise guide to corporate finance for modern companies that want to create long-term value has been published in the format of an open-access textbook by Dirk Schoenmaker, professor of banking and finance at Rotterdam School of Management, Erasmus University (RSM), and Willem Schramade, Head of Sustainability Client Advisory at investment management company Schroders, and a fellow at RSM’s Erasmus Platform for Sustainable Value Creation, which develops new insights on finance through research and education.
The book, Corporate Finance for Long-Term Value draws on recent literature about sustainable companies. It has been written for business and finance managers but the authors have kept in mind undergraduate and graduate students of finance, economics, and business administration.
“An increasing number of companies want to contribute to solving sustainability challenges, such as climate change, biodiversity loss and social inequality – and want to do it based on solid business principles. Major companies have adopted the SDGs in their company purpose and strategy. The key challenge for companies is to balance profit and impact. This corporate finance handbook provides the tools for this balancing act.”
“Current corporate finance textbooks are based on the traditional shareholder model for maximising financial value. However, this book adopts the integrated model, which argues that companies have to serve the interests of current and future stakeholders,” says Prof. Schoenmaker. “The modern CFO creates profit and impact, so doing business in a sustainable world means that companies must move from simply maximising financial value to optimising integrated value, which combines financial, social and environmental value.
It translates the general concept of sustainability into core corporate finance methods, such as net present value, company valuation, cost of capital, capital structure and M&A.
The authors have achieved their aim of providing a concise handbook for companies that want to create long-term value. This innovative textbook about corporate finance – free to download or open in PDF format – demonstrates how to apply this new paradigm of integrated value. The basic methods of corporate finance remain the same but are now expanded to include social and environmental factors alongside financial factors. Examples throughout the book show how these methods work with integrated value.
It builds on recent academic literature on sustainable companies and starts by analysing the United Nations’ 17 Sustainable Development Goals (SDGs) as a strategy for the transition to a sustainable economy. It translates the general concept of sustainability into core corporate finance methods, such as net present value, company valuation, cost of capital, capital structure and M&A.
The book is available as a free download. It is also available as a hardcover book from Springer as part of its series Springer Texts in Business and Economics.
Head of Sustainability Client Advisory at investment management company Schroders.
Schoenmaker, Dirk and Schramade, Willem, Corporate Finance for Long-Term Value (June 4, 2023). Corporate Finance for Long-Term Value, Springer, 2023.
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Rotterdam School of Management, Erasmus University (RSM) is one of Europe’s top-ranked business schools. RSM provides ground-breaking research and education furthering excellence in all aspects of management and is based in the international port city of Rotterdam – a vital nexus of business, logistics and trade. RSM’s primary focus is on developing business leaders with international careers who can become a force for positive change by carrying their innovative mindset into a sustainable future. Our first-class range of bachelor, master, MBA, PhD and executive programmes encourage them to become to become critical, creative, caring and collaborative thinkers and doers.
