Company valuations - specially valuations of private and not listed companies which are or have been the target companies of a private equity (PE) or venture capital (VC) investment firms. There are different types of valuation methods, but with this research the idea is not to assess these methods rather than whether an ESG metric is or is not calculated into the formula.
ESG aspects - environmental, social and governance (ESG) is a very broad term and the content may vary on the principles applied. For example, the United Nations Sustainable Development Goals (SDGs) provides generic keywords, which are top level goals without providing detailed guidelines.
Due to the fact that PE and VC investment firms activities are regulated and this research focuses on EU, the main focus regarding ESG aspects derives from sustainable finance disclosure regulation (SFDR) EU directive 2019/2088. Hence, the EU is building its taxonomy of sustainable finance, which the market participants (including PE and VC firms) are required to follow. |
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