Ex ante assessment of sustainable marketing investments

Abstract

The sustainability revolution, and the positive effects of sustainable marketing on business performance, should lead companies and research to focus more on issues related to assessment of sustainable marketing investments. This conceptual paper is an attempt to provide a contribution on this interdisciplinary topic not yet considered in the literature. We focus on how companies can assess ex ante this type of investment. We propose an adaptation of the risk-return ratio as a tool for ex ante assessment of sustainable marketing investments. We also provide considerations about the risks and rewards of Starbucks’ “Greneer Stores” project. We conclude the study by discussing the implications for managers of sustainable companies.

Competitive Analysis of Starbucks

“…The leverage ratio is higher than approximately 1 or 100% means that the company is a risky investment for potential investors and lenders because it has taken out a higher amount of debt instead of financing its operations through the shareholders putting it at a greater risk of financial default [7]. In the financial year 2022, the company's revenue was $30.25 billion US, and the net profit of the company was $3.28 billion US respectively [8]. The revenues in the past five years can be declared stable for Starbucks Corporation, with an increasing trend since the 2020 financial year.…”

“…Figure5 above shows the chart of Starbucks Corporation's revenue and profit comparison from the financial year 2018 to the financial year 2023, respectively. According to this chart, even though the revenues of the company have shown an upward trend in recent years, the profit of the Starbucks Corporation has decreased, indicating the high operating expenses and operating costs of the company.In the financial year 2022, the company's revenue was $30.25 billion US, and the net profit of the company was $3.28 billion US respectively[8]. The revenues in the past five years can be declared stable for Starbucks Corporation, with an increasing trend since the 2020 financial year.…”