Nikita G. Tinkov Separately or Together? On the Integration of Economic and Environmental Performance in Investment Appraisal

DOI: 10.38050/2078-3809-2026-18-1-138-156

Abstract

The relevance of sustainable development requires a shift from fragmented evaluations of investment projects toward integrated approaches that consider both economic and environmental aspects. This study analyzes existing methods for assessing economic (NPV, IRR, EIRR) and environmental (EIA, GHG emissions, resource intensity) effectiveness of investment projects. The empirical basis includes projects implemented with the participation of AfDB, IBRD, and ADB. It was found that most current methods assess effectiveness within their respective categories and do not provide a comprehensive interpretation of results. As a promising approach, the study proposes the use of the ecological footprint indicator, which allows for accounting the overall environmental impact of a project. Based on the analysis, the author concludes that new integrative methodologies must be developed–capable of capturing both positive and negative externalities. Such approaches would enable a more accurate and fair assessment of the contribution of investment projects to sustainable development goals and improve the quality of long-term investment decision-making.

Keywords: sustainable development, environmental and economic efficiency assessment, environmental externalities, ENPV, EIRR.

JEL: Q01, Q56, Q57.

For citation: Tinkov, N. G. (2026) Separately or Together? On the Integration of Economic and Environmental Performance in Investment Appraisal. Scientific Research of Faculty of Economics. Electronic Journal, vol. 18, no. 1, pp. 138-156. DOI: 10.38050/2078-3809-2026-18-1-138-156.

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