Using portfolio theory to improve resource efficiency of invested capital

Limited literature provides concrete, theory-based methods for quantifying the effects of sharing capital. This paper describes the potential contribution of portfolio theory to quantify the effects and optimize the employment of capital (human, tangible, financial, and service employing capital) in a theoretical and quantitative manner in the context of sustainability. Insights illustrate how portfolio principles can yield benefits, including the fulfillment of needs using fewer resources, consistent with sustainability. In particular, “pooling” assets to meet uncertain demands from different users of an asset pool may yield benefit from diversification effects. Suggests future research avenues such as the management of high-value, critical-value, and expiring resources to support sustainability.