ROSI Resources and Tools

ROSI™ Methodology

ROSI™ Resources and Tools

CSB offers in-depth resources on ROSI, including a step-by-step overview, research publications, industry case studies, and Excel tools for download.

Understanding the Return on Sustainability Investment (ROSI™) Methodology

How ROSI Works

CSB ROSI is designed to be a simple yet comprehensive process that identifies material sustainability strategies and the changed practices resulting from those strategies, then quantifies and monetizes the benefits through the lens of the ROSI mediating factors. To learn more about ROSI and each of the steps, click here.
 
Step 1 - Assess Opportunities and Risks: Identify the material sustainability strategies for the sector and the company, using SASB or GRI as guides. For example, a specific sustainability strategy for an auto manufacturer may be to improve waste management.

Step 2 - Identify Associated Strategies: For each sustainability strategy, identify the material changes in business practice. For example, a practice to improve waste management for automakers is to recycle paint and solvents.

Step 3 - Determine Expected Benefits: Determine the potential and realized financial and societal benefits of these practices, through the lens of the mediating factors of financial performance (innovation, operational efficiency, supplier loyalty, etc.). For example, recycling paint and solvents (A) reduces purchase of the product, (B) reduces waste disposal costs, and (C) brings in revenue through selling excess recycled material.

Step 4 - Quantify Results of Benefits: For example, idenfity the % of manufacturing waste that is recovered and reused.

Step 5 - Monetize the Benefits: Apply a monetization process to calculate monetary values for the intangible and tangible benefits. For example, weighted average unit cost of recovered materials versus the cost of reused materials and upfront investment, with the net being the return on investment.


Research Papers and Articles

 
Publication Description
Harvard Business Review
December 2020
How to Talk to Your CFO About Sustainability 
The Return on Sustainability Investment (ROSI) is an analytic tool, which companies can use to measure the financial returns on their sustainability activities. Implementing ROSI is a five-step process. Companies should (1) identify their current sustainability strategies, (2) identify related changes in operational or management practices, (3) determine the resulting benefits, (4) quantify the benefits, and (5) calculate the monetary value. The savings and growth thus revealed can reach hundreds of millions of dollars; in large companies, it can be billions.
Sustainable Consumption and Production
November 2020
The Return on Sustainability Investment (ROSI): Monetizing Financial Benefits of Sustainability Actions in Companies
Practitioners and researchers struggle with valuing the return on sustainability investment (ROSI). We apply a five-step methodology that systematically monetizes sustainability actions to answer a key question: Do sustainable practices lead to a positive financial return for the business? We demonstrate the versatility of this methodology across two types of industries: Brazilian beef supply chains that committed to deforestation-free beef and the automotive industry, where companies were working to make manufacturing operations more sustainable. Our ROSI methodology guides managers to better value sustainability’s financial benefits. 
Stanford Social Innovation Review
August 2020
Making a Better Business Case for ESG 
Without clearer insight into the financial benefits of corporate sustainability efforts, they may never be scaled up in the face of climate change, COVID-19, inequality, and many other perceived or real challenges to a company's bottom line.
Journal of Applied Corporate Finance
June 2020
Using the Return on Sustainability Investment (ROSI) Framework to Value Accelerated Decarbonization
The study presented here describes the outcomes of a recent analysis in which CSB in collaboration with ALO Advisors worked with Capital Power Corporation, a North American power producer, to estimate the value likely to be created by accelerating its transition to clean energy. Through their work with the Chief Sustainability Officer, Chief Financial Officer, and senior managers from several key business functions, the authors identified seven major sources of benefits, and quantified the expected effects on value of four of them, to produce an estimated contribution to the value of the company of about $30 million.
EcoVadis and NYU Stern CSB
July 2019
Sustainable Procurement Barometer 2019: From Compliance to Performance
The EcoVadis Sustainable Procurement Barometer offers insight into how sustainability is evolving in procurement priorities, and the tools and processes being used to drive tangible improvements and business results. Conducted in partnership with NYU Stern CSB and featuring the CSB ROSI Methodology, the analysis suggests organizations are placing greater emphasis on business ethics and labor and human rights practices compared to three years ago.
St John's University: Review of Business Journal
June 2019
The Return on Sustainability Investment (ROSI): Monetizing Financial Benefits of Sustainability Actions in Companies
CSB is proud to announce that the Review of Business editorial board and Munich Re awarded this article with "Best Paper" for its demonstration of how a publicly-traded firm can quantify the relative value of integrating sustainability-related initiatives in its core operations. In the article, we introduce ROSI and emphasize nine mediating factors when monetizing tangible and intangible benefits of sustainability actions such as innovative sustainable agricultural techniques or innovation in electric vehicles. We showed empirically which factors likely drove corporate financial performance in cases in the beef and auto industries.
Harvard Business Review
September 2017
How to Quantify Sustainability’s Impact on Your Bottom Line
In this article, we review the findings from our case study on beef production in the Amazon (read the full report below). ROSI and its application in this case study demonstrate that these financial improvements can be quantified and monetized in a credible and cost-effective manner, and have the potential to serve as a powerful tool with business decision makers.
NYU Stern CSB
August 2017
Deforestation-Free Supply Chains: Financial Impact for Brazilian Beef Production
After investigating the financial costs and benefits of the uptake of sustainable and deforestation-free beef by ranchers, slaughterhouses and retailers in Brazil, we found that sustainable and deforestation-free practices have the potential to create significant financial benefits across the entire value chain. While sustainable agricultural practices provided the most financial benefit, deforestation-free commitments reduced risk.
Harvard Business Review
October 2016
The Comprehensive Business Case for Sustainability (Full PDF Here)
In this review of business and academic literature, NYU Stern CSB found positive financial and strategic benefits for companies taking a comprehensive   approach to managing for sustainability and embedding it in their core business strategy.
 


ROSI in the News


Excel Tools for Testing ROSI

Below you'll find five Excel tools that CSB has developed to apply ROSI to the specified mediating factors or through collaboration with industry partners.


ROSI at the CSB Practice Forum

The Annual Practice Forum focuses on how to identify, track, and monetize sustainability returns driven by innovation, operational efficiency, employee engagement, brand enhancement, and risk mitigation, for better decision-making by the C-suite and investors. Learn more about ROSI through the following materials from recent Practice Forums, including presentations, panel discussions and workshops.

2021 Practice Forum 
Tensie Whelan, Director, NYU Stern Center for Sustainable Business
How the Apparel Industry's Sustainability Investments Are Creating Financial Value
Recent case studies tracking the Return on Sustainability Investment (ROSI™)
Eric Fisch, National Sector Head of Retail and Apparel, HSBC Bank USA
Cynthia Power, Director of Renew, EILEEN FISHER
Sophie Rifkin, Director, Corporate Research and Engagement, NYU Stern CSB
Kathleen Talbot, Chief Sustainability Officer and VP of Operations, Reformation
Matthew Thurston, Director of Sustainability, REI
 
2020 Practice Forum
Kate Chisholm, SVP, Chief Legal & Sustainability Officer, Capital Power, and Paula DiPerna, Special Advisor, CDP North America
Andrea Bonomi, CEO, Investindustrial, and Emily Chasan, Sustainable Finance Editor, Bloomberg LP
ROSI Breakout Sessions: Testing the Methodology   
ROSI 101 Workshop: View the PDF presentationcase study, and workbook.
ROSI 201 Workshop: View the PDF presentation.    
ROSI for Investors Discussion Group: View the PDF presentation and worksheets.

2019 Practice Forum
Rick Ridgeway, Vice President, Public Engagement, Patagonia, James Stephens, Director, Global Government and External Affairs, Aston Martin, Andrew Winston, Author, The Big Pivot, and Daniel Aronson, Founder, Vaultus

2018 Practice Forum
Opening Address by Tensie Whelan and Fireside Chat with Mars: Investing $1 Billion in Sustainability: What is the Payback? (Video)
Adi Ignatius, Editor-in-Chief, Harvard Business Review, and Barry Parkin, Chief Sustainability Officer, Mars 
Business Case in Action: Discussion Regarding the Analysis of the ROI of Sustainability (Video)
Jim Bath, Director, Global Environmental Services, Kimberly-Clark, Maureen Kline, Vice President, Public Affairs and Sustainability, Pirelli Tire North America, Jeff Senne, Corporate Responsibility Strategy and Implementation Leader, PwC, James Sullivan, Head of Global Sustainability Center of Excellence, SAP, and David Tulauskas, Director, Sustainability, General Motors Company 
Financial Benefits of Companies Managing for Total Societal Impact (Video)
Douglas Beal, Director, Social Impact, The Boston Consulting Group
The Return on Sustainability Investment (ROSI) for DOW Chemical (Video)
Emily Chasan, Sustainable Finance Editor, Bloomberg News, and Andrew Liveris, Chairman and CEO, The Dow Chemical Co., and Executive Chairman, DowDuPont

 


Other Resources

ROSI Research Database: CSB presents the largest selection to date of corporate and academic research on the direct relationship between sustainability initiatives and financial performance.
Driving Sustainable Decisions (Online Course): These free, self-directed online learning modules walk you through the "Building a Better Business Case for Investments in Sustainability" curriculum developed by the NYU Stern Center for Sustainable Business.
JUST Capital Report Builds on CSB ROSI Methodology: In June 2019, JUST Capital published a new report supporting "what we have long suspected, and what our empirical analysis corroborates: that just business is simply better business." The report builds on the NYU Stern CSB ROSI Methodology that demonstrates how companies that embed sustainability in their strategy and practice drive greater profitability, higher valuation, and a lower cost of capital.


Guidance on Using and Citing ROSI™
NYU Stern CSB’s Return on Sustainability Investment (ROSI™) methodology is designed to be a simple yet comprehensive process that monetizes material sustainability strategies and the practices resulting from those strategies.

We encourage corporates, investors, consultants and others to adopt the ROSI™ approach and share findings with broader networks. However, to maintain consistency, we ask that our partners preview any reference to ROSI™ (whether on a website, in print, or on social media) with our team. Please send materials for review to sustainablebusiness@stern.nyu.edu and allow 2-3 business days for a response before publishing. Thank you.

Citation Guidance
  • Use the full name of the methodology and credit our organization:
    • “Return on Sustainability Investment (ROSI™) Methodology, developed by the NYU Stern Center for Sustainable Business (CSB)”
    • Following the first mention, you may use the following abbreviations: “NYU Stern CSB”; “ROSI™”
  • Link to the NYU Stern CSB website or tag our account page whenever possible.