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Guide for Environmentally Sustainable Investment Analysis Based on ASTM E3200

Published

Author(s)

Douglas Thomas, Anand M. Kandaswamy, David Butry

Abstract

This guide presents techniques for evaluating manufacturing investments from the perspective of environmentally sustainable manufacturing by pairing economic methods of investment analysis with environmental aspect of manufacturing, including manufacturing processes. The methods are based on ASTM E3200 and, although the focus is on manufacturing, they can be applied under other circumstances (e.g., construction industry investments, agriculture, or mining). The economic techniques include net present value, internal rate of return, payback period, and hurdle rate. The guide also includes sensitivity analyses with a focus on Monte Carlo techniques. The methods presented can be used by manufacturers, regardless of size or complexity, to make environmentally sustainable decisions, including but not limited to whether to embark on an investment, discontinue a manufacturing line, invest or re-invest in a new project or factory.
Citation
Advanced Manufacturing Series (NIST AMS) - 200-11
Report Number
200-11

Keywords

sustainability, manufacturing, investment analysis, net present value, internal rate of return, rate of return, payback period

Citation

Thomas, D. , Kandaswamy, A. and Butry, D. (2021), Guide for Environmentally Sustainable Investment Analysis Based on ASTM E3200, Advanced Manufacturing Series (NIST AMS), National Institute of Standards and Technology, Gaithersburg, MD, [online], https://doi.org/10.6028/NIST.AMS.200-11, https://tsapps.nist.gov/publication/get_pdf.cfm?pub_id=931602 (Accessed September 23, 2021)
Created March 15, 2021, Updated June 23, 2021