The Potential Use of Sustainability Scenarios as a Supplement in Equity Valuation

This paper, authored by Steve Lydenberg, Partner, Strategic Vision at Domini, examines the potential use of sustainability scenarios in equity valuation and investment decision-making by long-term investors. It poses the question whether if long-term investors could better understand when and how corporations systematically incorporate sustainability into their strategic planning, they would possess a valuation tool that would allow them to reward corporations in the markets in ways stock price alone is ill equipped to do. The existence of such a valuation tool in the hands of long-term investors could then provide incentives to corporations to incorporate sustainability considerations fundamental to their core businesses into their strategic planning.

The paper was presented by Steve Lydenberg for the first time on July 11, 2014 at a public event held by the Taskforce for Climate Related Financial Disclosures (TCFD) on July 11, 2014 in New York City.     

Read The Paper Listen to Full Panel talk on Scenario Analysis

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