Environmental, social, and governance (ESG) factors are increasingly becoming important considerations in many firms? capital allocation decisions. ESG integration is a strategy that can be employed to conduct a more robust financial analysis and to get a more complete picture of a company’s valuation and its overall risk profile. This ESG Integration & Financial Analysis course examines how ESG initiatives and performance can influence a company’s income statement, cash flow statement, and balance sheet. After covering the most important qualitative and quantitative factors that may impact a company’s financials, we dive into a case study where we interpret ESG information from an example company’s sustainability report, then model these various scenarios in Excel. We also work through several optional, advanced modeling techniques to support cleaner data visualization, including the use of Macabacus shortcuts.
Learning Objectives
• Determine how ESG initiatives and performance can affect a company
• s income statement, cash flow statement, balance sheet, and overall valuation.
• Identifythe key differences between ESG integration and ESG investing, and how the two approaches can complement each other.
• Recognize how to translate sustainability disclosures into model assumptions and incorporate them into financial analysis.
Major Topics
• Define ESG integration.
• Explain how ESG integration and ESG investing are different, as well as how they may complement one another.
• Analyze how ESG factors (or company initiatives) may impact its financial results.
• Translate company-provided sustainability information into model assumptions.
• Integrate a company
• s ESG initiatives into a financial model and see how they may affect company valuation.
• Explore advanced modeling techniques to improve your Excel skills and to create more dynamic models.
