World Finance raises an interesting question in a recent article—is sustainability a new factor in contemporary business valuations? Cheryl Hicks of the World Business Council for Sustainable Development believes there are increasing signs of sustainability performance in business valuations. An instance of this was the 65.5% premium paid in the acquisition of Alcan, Inc., where Alcan’s CEO stated that “Alcan’s track record on sustainability, environmental stewardship and stakeholder relationships” were significant contributing factors in the massive premium paid.
The article goes on to posit that “enlightened” CEOs are already communicating “sustainability value” as a new definition of value, and that the historic intangible asset valuation journey could serve as a model for sustainable valuations (remember: it was once thought impossible to assign value to intangibles such as brand, reputation and patents). For more interesting thoughts to ponder, read the full article here.
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