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ESG Valuation Considerations – Top Down or Bottom Up?

Value Scope

The challenge is that it is difficult to value things that are not clearly defined and measured, with some sort of consensus. 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.

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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? For example, in a recent valuation we completed, the mean unlevered Beta of a group of 10 comps was 0.58.