New survey reveals challenges of reflecting ESG in valuation

BVWireIssue #269-1
February 5, 2025

valuation methods & approaches
cost of capital, income approach, international valuation standards council (IVSC), risk analysis, Environmental, social, and governance (ESG)

The most frequently cited challenge to the integration of environmental, social, and governance (ESG) considerations in valuations is the lack of standardized metrics for measuring ESG impacts. This is according to the results of a survey published in a new “Perspectives Paper: The Integration of ESG in Valuation Practices: IVSC Global Survey 2024.

Based on responses from 542 valuation professionals in 85 countries, the survey examines:

  • The extent to which ESG factors are being incorporated into valuations;
  • The opportunities and challenges associated with ESG integration; and
  • The role of international standards like IVS in providing a consistent framework for valuations.

The paper recommends the development of standardized metrics for evaluating ESG factors in valuations, increased education and training on the value impact of different ESG factors, and greater engagement between valuers, clients, and regulators to help ensure that ESG factors are appropriately valued.

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