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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. Do ESG programs impact firm value? Using Alpha, however, it could be done. These are fair questions.

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ESG A Valuation Framework

Value Scope

Do ESG programs impact firm value? Will ESG assets be recorded on balance sheets one day soon, just as intangible assets such as goodwill and intellectual property are recorded today? Using Alpha, however, it could be done. Alpha is unsystematic risk, unique to the firm undergoing valuation.