A4S Essential Guide to Valuations and Climate Change

Climate change and business valuations are inextricably linked but quantifying the value of the impact has been a challenge. This guide has been developed to help finance professions bring climate change risks and opportunities into business and asset valuation calculations.

The first-of-its-kind guidance offers a five-step framework that enables investment and valuation communities to apply climate change risks and opportunities consistently to their valuations and decision making.

The guide was developed in partnership with CPA Canada, finance teams from the A4S CFO Leadership Network, global institutional investors and industry experts. Project team members included:

  • Ontario Teachers’ Pension Plan
  • New Zealand Superannuation Fund
  • OMERS
  • Brookfield Asset Management
  • Caisse de dépôt et placement du Québec (CDPQ)
  • Chartered Business Valuators Institute (CBV Institute)
  • Financial Reporting and Auditing Standards Canada

Factoring climate change into valuations is in its infancy. Through this guide we hope to inform the discussion among the valuation, accounting and regulatory communities to encourage moving this forward into accepted practice. By doing so, we would expect more disclosures on the impact of climate change in corporate reporting and a greater oversight by boards on this topic.”

David McGraw, Chief Financial Officer, Ontario Teachers' Pension Plan

“Calculating the value of businesses and assets is one of the most important factors determining where investors put their money… We hope that the launch of this guide will spur action from finance and investment teams globally and help accelerate the transition to a net zero, sustainable economy.”

Jessica Fries, Executive Chairman, A4S

“Until now, the general approach to considering climate change in valuations has been primarily qualitative in nature. The Essential Guide to Valuations and Climate Change, on the other hand, enables valuators to quantify the impact of climate change on business valuations, providing a more robust, accurate and holistic indication of the true impact of climate change risks and opportunities.”

Charles-Antoine St-Jean, President and CEO, Chartered Professional Accountants of Canada (CPA Canada)

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