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Do ESG factors influence firm valuations? Evidence from the field

Franck Bancel et al.

Financial Review (US)2025https://doi.org/10.1111/fire.12444article
AJG 3ABDC A
Weight
0.50

Abstract

We present results of a survey of more than 300 European financial professionals on best practices in integrating environmental, social, and governance (ESG) factors into corporate valuations. We find external stakeholders, such as investment advisors and financial consultants, are significantly more likely than corporate insiders, such as those in controller and treasury roles, to employ ESG in valuation. Concerns abound among respondents about poor ESG data quality, but these are not correlated with their propensity to use ESG for their valuation models. Adjusting the discount rate appears to be the preferred mechanism in the valuation approaches adopted by respondents.

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https://doi.org/https://doi.org/10.1111/fire.12444

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@article{franck2025,
  title        = {{Do ESG factors influence firm valuations? Evidence from the field}},
  author       = {Franck Bancel et al.},
  journal      = {Financial Review (US)},
  year         = {2025},
  doi          = {https://doi.org/https://doi.org/10.1111/fire.12444},
}

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Do ESG factors influence firm valuations? Evidence from the field

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Evidence weight

0.50

Balanced mode · F 0.40 / M 0.15 / V 0.05 / R 0.40

F · citation impact0.44 × 0.4 = 0.18
M · momentum0.65 × 0.15 = 0.10
V · venue signal0.50 × 0.05 = 0.03
R · text relevance †0.50 × 0.4 = 0.20

† Text relevance is estimated at 0.50 on the detail page — for your query’s actual relevance score, open this paper from a search result.