Ethics and Discounting - Antagonism or Interrelation

The global climate change is an ongoing process which is significantly affected by human activities. Due to the impact to our and future generations as well as the restraint of resources it is necessary to countervail the growing global environmental issues. The real estate industry plays a major role in the context of global structural mutation and is therefore forced to act responsible to implement a long term awareness dealing according to the Triple-Bottom-Line framework. But not just out of legislation driven obligations it is important to follow a CSR-Agenda, also to derive possible future benefits to the environment. Because of the significance of the discount rate within real estate investment, appraisal and valuation, this study critically examines the way discount and cap rates work in traditional cost-benefit analysis and valuation methods. Ethical and intergenerational aspects to the future social welfare will be reflected against the results. The contribution of the paper is to put real estate, its environmental responsibility and intergenerational consequences into an interrelated context.