Page 11 - FINANCE PART 2 - 9. Valuations
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VALUATIONS
Assumptions and facts that underlie the
valuation estimate
Risks related to sustainability
• Sustainability (environmental, social and governance)
risks and opportunities should be integrated into
traditional equity valuation techniques to show how a
company’s revenue, earnings and cash flows could be
impacted by global sustainability issues.
• For example (such as the coal mines to be developed in
the Waterberg area), there could be an additional risk for
a mining company if it has operations in areas of water
scarcity. This additional risk could cause a decrease in the
value of the company. On the other hand, sustainability
opportunities could cause an increase in the value of the
company. For example, if a utilities company has
exposure to an expanding green energy market or “smart
energy” technology.
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