Should net zero companies use standard discount rates?

Challenging the established rules on discount rates is a bit like questioning the laws of gravity. The concept of the time value of money – that financial flows in the distant future have effectively zero present value – is a core feature of any cost/benefit analysis of long term investment projects.

But when we make statements like: “I want to leave a healthy planet for future generations” or “I want my bank to be net zero aligned by 2030” we are effectively saying that long-dated flows stemming from decisions taken today should be given considerable weight in determining which projects should be undertaken. Implicit also is the notion that social costs and benefits must be incorporated into the analysis of private projects, at least insofar as the stability of the environment is concerned.

Working out how to adapt present value calculations to incorporate long term sustainability issues seems like a worthwhile endeavor.