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Survey: ESG & Valuation

14 February 2022

IVSC launches survey exploring the evolution of ESG considerations in the valuation process. ESG comprises three pillars; environmental, social and governance, all of which collectively to effective performance, with…

IVSC launches survey exploring the evolution of ESG considerations in the valuation process.  ESG comprises three pillars; environmental, social and governance, all of which collectively contribute to effective performance, with p

Alexander AronsohnIVSC Technical Standards Director (Tangible Assets)

Environmental, Social, and Governance (ESG) are the criteria that together establish the framework for assessing the collective conscientiousness of businesses for social and environmental factors. ESG comprises three pillars; environmental, social and governance, all of which collectively contribute to effective performance, with positive benefits for the wider markets, society and world as a whole.

The International Valuation Standards (IVS) have always implicitly required the consideration of ESG components within valuation, but no explicit standards have yet been drafted in this regard. However, in the past few years, the explicit quantification of the components of ESG within the valuation process across all specialisms (business valuation, financial instruments, and tangible assets) has gained even greater prominence across all markets. This is in part due to renewed global commitments to environmental sustainability and net zero, the growing influence of intangibles on valuations, and greater investor, regulatory and public scrutiny of ESG components within the valuation process.

As a result, the explicit consideration of ESG within the valuation process has become a key topic for the IVSC as not only is it in the global public interest, but also meets a market need, particularly as more standards and regulations are incorporating specific reporting requirements for ESG.

During the past year the IVSC have issued an agenda consultation and three perspective papers on ESG, which often act as a precursor to standard setting and are aiming to include more explicit ESG valuation requirements for all specialisms within future editions of IVS.

The IVSC has also set up an ESG working group comprising representatives of the IVSC Standards Review Boards, stakeholders, and external specialists to further discuss market needs.

As part of this process, the ESG working group felt that it was important to carry out a survey of investors, businesses, and valuers to understand where they are in their journey towards the quantification of ESG components within their valuations. Gathering data via a survey is particularly important as the role of standard setters is not to lead the market but to develop standards to meet market needs.

The survey – which should take around 5-10 minutes to complete – relates to all types of valuations including valuations for financial reporting, market capitalisations, secured lending and tax reporting purposes. The survey will run until 30 April 2022. Once the survey has been completed, the IVSC will compile the results and publish a report. The report will provide insights on the present stage of ESG in valuation, for businesses and investors, and what valuers are presently seeing in their markets.  The IVSC will share details of the findings with you when you complete the survey. The report will also provide the IVSC Standards Review Board with further guidance on the need for more explicit ESG requirements within the next edition of IVS.

The IVSC's ESG Working Group felt that it was important to carry out a survey of investors, firms and valuers to understand where they are on their journey in relation to the quantification of ESG components within their working practices.

Please select the relevant survey based on the type of entity you represent:

This survey is for firms that commissions and/or use valuations:

Businesses (valuation users)

This survey is for valuers/valuation service providers:

Valuation Providers

This survey is for investors that use valuations as part of the investment process:

Investors

IVSC ESG Working Group

Alexander Aronsohn

IVSC Technical Director

Professor Mauro Bini

Bocconi University

Susan DuRoss

Harvest Investments

Ben Elder

RICS

Becky Gaughan

Savills

Kim S Hildebrandt

Victorian Government

Susann Ihlau

Mazars

Howard Mah Lee

AICPA

Colin Martin

KPMG

Catalina Miranda

CBV Institute

Richard Olson

Lincoln International

Kevin Prall

EY

Mark Zyla

IVSC Standards Review Board

There are more than 170 member organisations
of the IVSC, operating in 137 countries worldwide. Join them.

Become part of a global network working to enhance valuation standards and professionalism.

There are more than 180 member organisations
of the IVSC, operating in 137 countries worldwide. Join them.

Become part of a global network working to enhance valuation standards and professionalism.