Beyond financial metrics: An integrated framework for capital investment decisions in the Swedish forest industry

This study examines how Swedish forest industry firms assess capital investments by integrating financial and non-financial considerations. Based on in-depth interviews with senior managers from ten forest companies, this qualitative approach identifies a multidimensional evaluation approach that incorporates strategic, environmental, and social aspects alongside conventional financial metrics. The findings reveal that investment decisions are influenced not only by economic rationale but also by behavioral factors such as cognitive biases and perceived risk, providing empirical support for Prospect Theory in an industry-specific context. The study contributes to the literature by proposing an integrated capital investment assessment framework, highlighting the need for holistic, context-sensitive decision models in sectors with strong environmental and stakeholder interdependencies. • An integrated approach to capital investment assessment include both financial and non-financial considerations. • Several risk factors – financial, social, environmental, and strategic are actively considered in capital investment assessments • Prospect Theory suggests that capital investment decisions are shaped by cognitive biases. • Behavioural complexity influence managers in capital investment assessments.