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Futureproofing Companies & Valuation Ratios

Author

Listed:
  • Schramade, Willem
  • Schoenmaker, Dirk
  • Wiedemann, Moritz
  • Marijnissen, Wander

Abstract

Companies face transition risks and opportunities that are not fully captured by conventional valuation ratios. We address this limitation by incorporating social and environmental externalities into company valuation to provide a comprehensive assessment of value. Building on impact valuation methods, we estimate integrated value as the sum of financial, social and environmental value and express it relative to financial value through the “Futureproofing Ratio†, a natural extension of the price-to-book ratio. We apply the framework to 52 non-financial DAX and AEX companies. The results show that Futureproofing Ratios provide a differentiated, multidimensional assessment of business-model transition exposure; vary substantially across companies and sectors; and produce company rankings that remain comparatively stable under alternative assumptions. The ratio may strengthen conventional financial analysis and inform corporate and investor assessment and decision making.

Suggested Citation

  • Schramade, Willem & Schoenmaker, Dirk & Wiedemann, Moritz & Marijnissen, Wander, 2025. "Futureproofing Companies & Valuation Ratios," CEPR Discussion Papers 20243, Centre for Economic Policy Research.
    • Handle: RePEc:cpr:ceprdp:20243
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    File URL: https://cepr.org/publications/DP20243
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    JEL classification:

    • D62 - Microeconomics - - Welfare Economics - - - Externalities
    • G31 - Financial Economics - - Corporate Finance and Governance - - - Capital Budgeting; Fixed Investment and Inventory Studies
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting
    • Q52 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Pollution Control Adoption and Costs; Distributional Effects; Employment Effects

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