Valutico releases ESG valuation tool

Source: Valutico

Leading the way in sustainable finance, Valutico has launched ValutECO, an advanced tool that assesses the value of companies based on their environmental impact.

With this groundbreaking announcement, the valuation platform Valutico has made a significant step into integrating sustainability into the widespread practice of valuing businesses.

Valutico’s newly launched tool, currently in an ‘alpha’ trial phase, allows accountants, M&A consultants, investment managers, private equity professionals, and those in corporate finance to consider the impact of Environmental, Social and Governance (ESG) factors on a company’s value. By addressing the potential links between ESG and financial performance, ValutECO is leading the way towards incorporating sustainability into financial theory and practice.

ValutECO Explained
With ValutECO, financial professionals use a streamlined ESG assessment, specifically designed with small and medium-sized enterprises (SMEs) in mind and simplified to facilitate easier reporting. Analysts can identify priority areas for improvement, such as reducing greenhouse gas emissions, managing water usage, and increasing recycling rates.

Valutico’s pioneering new tool integrates ESG scores into the ‘Cost of Capital’ component of a Discounted Cash Flow (DCF) valuation. This revolutionary feature allows companies with positive ESG scores to be valued higher, making them more attractive to potential buyers and investors seeking sustainability and long-term growth.

ValutECO was developed following a grant by Wirtschaftsagentur Wien, and follows research into the impacts of ESG criteria on the valuations of businesses across multiple industries, alongside validation that the condensed ESG assessment reflects more exhaustive assessments on the market.

Impact on Sustainability
The widespread adoption of a tool like ValutECO has the potential to be a game-changer for sustainability in industries all around the world. It would financially incentivize companies to prioritize sustainability and embed environmental factors as a key component of their everyday operations. This would result in one way in which companies’ impact on the planet becomes a crucial aspect of buying, selling, and investing decisions.

Valutico acknowledge that the integration of ESG into financial analyses is an ongoing conversation requiring further academic study, but they’re …


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