ESG and Business Valuation, Perspectives Paper

IVSC (2021) | Asset Management, Risk Mitigation, Valuation

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Environmental, social, and governance (ESG) factors have rapidly evolved from peripheral concerns into core components of capital allocation strategies for both investors and corporations. Institutional investors are increasingly applying ESG filters to shape their portfolios, in alignment with both ethical and sustainability goals, and to enhance long-term financial returns. Concurrently, corporate leadership, particularly at the C-suite level, is incorporating ESG considerations into capital budgeting decisions to enhance comprehension of how these factors impact sustainable financial performance.

The global disruptions of 2020 acted as a catalyst, accelerating the integration of ESG frameworks across industries. In light of the recalibration of businesses and markets in response to climate risk, social equity, and governance transparency, ESG is no longer viewed as a niche concern but as a strategic imperative.

This Perspective…