ESG & Real Asset Valuation. Sharpening the Focus, not Reinventing the Wheel, Guidance Note

IVSC (2024) | Asset Management, Risk Mitigation, Valuation

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The paper addresses the growing importance of Environmental, Social, and Governance (ESG) factors in valuing tangible assets. This paper is intended to complement recent updates to IVS, including the ESG Appendix in IVS 104, and reflects increasing regulatory and market attention to ESG integration.

Key themes include practical guidance on incorporating ESG into valuation practices across asset types such as real estate, infrastructure, and commodities. It emphasises the importance of valuers staying informed about global regulatory developments, including the EU Taxonomy and IFRS Sustainability Disclosure Standards. The paper also clarifies how traditional valuation methodologies – market, income, and cost approaches – can be adapted to reflect ESG considerations.

Acknowledging the difficulties in measuring the impacts of ESG, the paper proposes a pragmatic approach that utilises existing standards and professional judgement. Its…