How do environmental, social, and governance (ESG) and climate factors enhance valuations?

There continues to be a significant increase in ESG/climate-driven strategies, policies, and disclosures with private equity firms (PE). Strong ESG/climate programs include a phased buildout of decision-useful data customized to the business, operations, leadership, resources, value chain, risks, and opportunities at the enterprise level. The ESG/climate buildouts demonstrate the risk reduction and value creation components in the portfolio company by transparently tracking performance over the investment/management timelines, making the overall sale proposition more appealing and unique. This opens the field to a wider range of potential buyers with the opportunity to fetch better values and terms at exit.

Our ESG Advisory Services team—composed of designers, scientists, economists, planners, engineers, and data scientists—frequently interact with finance, investment, and sustainability teams at banks and PE on feasibility studies, due diligence audits, sustainability disclosures, and ESG/climate programs. This whitepaper draws on the collective reflections of our work through internal discussions, client interactions, and engagements with institutional investors.

As a publicly listed company, Stantec continues to be on the Corporate Knight’s Global 100 Most Sustainable Corporations in the World list. We are driving ESG/climate action internally and through our integrated advisory services.