How do environmental, social, and governance (ESG) and climate factors enhance valuations?
May 08, 2023
May 08, 2023
Integrating ESG/climate into the valuation process is more than audits, gap analyses, strategies, policies, programs, and key performance indicators
There continues to be a significant increase in ESG/climate-driven strategies, policies, and disclosures with private equity firms (PE). Strong ESG/climate programs include a phased buildout of decision-useful data customized to the business, operations, leadership, resources, value chain, risks, and opportunities at the enterprise level. The ESG/climate buildouts demonstrate the risk reduction and value creation components in the portfolio company by transparently tracking performance over the investment/management timelines, making the overall sale proposition more appealing and unique. This opens the field to a wider range of potential buyers with the opportunity to fetch better values and terms at exit.
Our ESG Advisory Services team¡ªcomposed of designers, scientists, economists, planners, engineers, and data scientists¡ªfrequently interact with finance, investment, and sustainability teams at banks and PE on feasibility studies, due diligence audits, sustainability disclosures, and ESG/climate programs. This whitepaper draws on the collective reflections of our work through internal discussions, client interactions, and engagements with institutional investors.
As a publicly listed company, Â鶹´«Ã½ continues to be on the Corporate Knight¡¯s Global 100 Most Sustainable Corporations in the World list. We are driving ESG/climate action internally and through our integrated advisory services.?