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ESG Valuation Considerations – Top Down or Bottom Up?

Value Scope

Intangible asset valuation concepts can and should be applied to unique ESG cash flows. This work can be used to reconcile and support an adjustment to the CAPM, then the WACC, via Alpha and Beta. Using Alpha, however, it could be done. Alpha is unsystematic risk, unique to the firm undergoing valuation.

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ESG A Valuation Framework

Value Scope

As companies continue to legitimately integrate ESG into business strategy, the ability to achieve β€œalpha,” which is an excess return or performance above a codified index or peer group, might become more difficult to do. It’s about counting using more comprehensive and sophisticated techniques through advances in information systems.