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Advancing corporate social responsibility by delaying high-carbon projects
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Carolin Schellhorn 
This work is licensed under a Creative Commons Attribution 4.0 International License.
Abstract
Existential threats from climate change require rapid decarbonization. Corporate capital allocation decisions have an outsized impact on its progress. When cash flow estimates are highly uncertain and early climate action is preferred, the economic value to society of delaying carbon emissions by postponing high-carbon projects may be substantial and should be considered in capital allocation decisions. Results derived for the time value of carbon storage by Parisa et al. (2022) can be used, with estimates of the social cost of carbon (SCC) and project carbon emissions, to calculate the economic value created when a project is postponed. Delaying a high-carbon project may ultimately lead to deployment with lower emissions or abandonment of the project altogether. This study provides estimates for two hypothetical examples that are part of many corporate capital budgeting projects. The results are relevant for researchers and policymakers who are called upon to provide up-to-date public information regarding the net social discount rate and the SCC. Firms should be required to report their carbon emissions. Business leaders, who aim to advance corporate social responsibility (CSR) and progress with sustainability-related solutions, need to have the ethical and interdisciplinary skills to recognize when a decision to delay is appropriate.
Keywords: Artificial Intelligence, Capital Budgeting, Carbon Emissions, Climate Change, Corporate Social Responsibility, Sustainability
Authors’ individual contribution: The Author is responsible for all the contributions to the paper according to CRediT (Contributor Roles Taxonomy) standards.
Declaration of conflicting interests: The Author declares that there is no conflict of interest.
JEL Classification: G3, Q5
Received: 14.07.2025
Revised: 08.09.2025; 13.09.2025; 02.01.2026
Accepted: 16.01.2026
Published online: 20.01.2026
How to cite this paper: Schellhorn, C. (2026). Advancing corporate social responsibility by delaying high-carbon projects. Corporate Governance and Sustainability Review, 10(1), 123–131. https://doi.org/10.22495/cgsrv10i1p11
