Abstract

This chapter presents adjustments to company valuation multiples using environmental, social, and governance (ESG) data for ESG integration in valuation. It starts with a basic adjustment based on an ESG score. Regression analysis is then introduced as a more precise method to modify multiples based on specific ESG ratings in the context of ESG investing. Real-world examples are used to demonstrate how regression analysis helps determine the relationship between a company’s ESG rating and valuation multiple and how this relationship can be used to adjust the multiple. By the end, readers will understand how to adjust multiples based on ESG data and scores in sustainable investing and apply this knowledge in practical situations.

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