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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. Adjustments to Beta can accomplish this. The re-levered Beta for the private company we were valuing was 0.56.

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ESG A Valuation Framework

Value Scope

Will ESG assets be recorded on balance sheets one day soon, just as intangible assets such as goodwill and intellectual property are recorded today? Adjustments to Beta can accomplish this. For example, in a recent valuation we completed, the mean unlevered Beta of a group of 10 comps was 0.58.