Exploring Sustainability Considerations in Capital Budgeting Decisions

Purpose: The paper examines the embedding of sustainability considerations in capital budgeting decision-making practice. The paper examines management consideration of sustainability in light of the tensions between the financial imperative of the organisation and desired strategic sustainability outcomes, exploring the emergence and evolution of capital budgeting decision-making practice. Design/methodology/approach: We adopt a case study approach across five large organisations to examine capital budgeting practice. The research sites comprise a mix of publicly listed and government enterprises with data collected from eighty four semi-structured interviews over a three-year period. Findings: Our results highlight the role of two key affects on intra-organisational attempts to measure and ‘improve’ the impact of sustainability considerations in capital budget decisions. We find that organisational norms associated with the trade-off between financial imperatives and desired sustainability outcomes as well as differences in individual perceptions of sustainability have substantive impact on the extent to which sustainability is privileged.