Futureproofing Companies & Valuation Ratios

Wander Marijnissen, Dirk Schoenmaker and Willem Schramade

No 20243, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: Companies face serious transition risks and opportunities, which put their futureproofness to the test. Current valuation ratios are not well suited to value those transition risks and opportunities. We argue that the solution lies in expanding financial-based valuation ratios with externalities (external impacts), which are good proxies for transition risks and opportunities. Building on impact accounting and valuation methods, we model a company’s integrated value, which combines financial, social and environmental value. This paper turns integrated value into a valuation ratio: the futureproofing ratio. To illustrate, we quantify the futureproofing ratios of 23 companies on the Amsterdam Stock Exchange. These estimates suggest that the futureproofing ratio varies significantly across companies and sectors, and provide valuable insight in the transition risk of a company’s business model. Company management and investors can use this ratio as a guide for investment decisions.

Keywords: Valuation; Transition; Externalities; Carbon emissions (search for similar items in EconPapers)
JEL-codes: D62 G31 G32 M41 Q52 (search for similar items in EconPapers)
Date: 2025-05
References: Add references at CitEc
Citations:

Downloads: (external link)
https://cepr.org/publications/DP20243 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cpr:ceprdp:20243

Ordering information: This working paper can be ordered from
https://cepr.org/publications/DP20243

Access Statistics for this paper

More papers in CEPR Discussion Papers from Centre for Economic Policy Research 33 Great Sutton Street, London EC1V 0DX, UK.
Bibliographic data for series maintained by CEPR ().