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

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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? There are also methods to use Beta to assess a private company, if the Guideline Public Companies selected for the analysis, the “comps,” are chose properly.