Evaluation of investment in bioeconomy projects: A focus on cash flow, ESG, and financial elements in cement companies

This This study evaluates the importance of sustainability analyses in the context of bioeconomy in Colombia. The methodology includes a sequential mixed approach, first, a literature review is conducted to identify existing gaps in the field of study and define the relevant concepts, then, models are tested to evaluate the cash flow in a company in the cement sector, simulating the financial effects that result from integrating ESG benefits (environmental, social and governance) into bioeconomic projects. Specifically, we evaluated how sustainability aspects can influence the financial and operational results of a company, thus providing a more complete view of its impact on the context of the bioeconomy. In the qualitative phase, the challenges faced by investment in bioeconomy projects are analyzed. Subsequently, in the quantitative phase, stochastic models are used to quantify the financial impact that sustainability practices in bioeconomy projects could have on cement companies. Findings reveal that implementing sustainability policies in bioeconomy projects has a significant and positive financial impact and they highlight the need to pay more attention to the diversity of ESG indicators and their integration into valuation models for bioeconomic projects or the valuation of companies that have circular and sustainable economy principles. Therefore, adopting sustainable practices contributes to decrease the cost of debt, which is reflected in a reduction in the cost of capital. Finally, this research has limitations in terms of the results obtained from the validation of the model since they may be specific to the particular application carried out in this study case; thus, it is important to understand that they may not be directly generalized to other industries or economic contexts.