Rising importance of ESG Factors and Intangible Assets in creating business value

The IVAS-IVSC Business Valuation Conference 2022 (6 – 7 October 2022) covers how ESG factors can be measured as intangible assets, and how to create other forms of intangible assets to impact enterprise value.

Singapore, 6 October 2022 – The IVAS-IVSC Business Valuation Conference 2022 themed, ‘Navigating New Frontiers to Create Sustainable Value’, highlights the importance of ESG factors in creating business value.   

2.    Guest-of-honour, Ms Indranee Rajah, Minister in the Prime Minister’s Office, and Second Minister for Finance and National Development, delievered her address and joined industry professionals to discuss ESG matters in business valuation. (Please click here for Minister's speech) 

3.    “ESG continues to build momentum today, despite the challenging global backdrop.  In a survey carried out by the IVSC in April, ESG was identified as the number one area of focus amongst the 100+ Valuation Professional Organisations and standard-setters within our network of member organisations.  Many of these organisations are actively thinking about how the standards and qualifications they offer, reflect ESG considerations,” said Mrs Lim Hwee Hua, Vice-Chair, Board of Trustees, IVSC. (Please click here for Mrs Lim Hwee Hua’s speech)

Raising Business Valuation standards

International Sustainability Standards Board (ISSB) 

4.    The International Sustainability Standards Board (ISSB) was set up in 2021 to lay out consistent ESG standards for companies reporting on ESG factors. With a common baseline for ESG disclosure standards consistent across jurisdictions and industries, the public will have information about companies’ sustainability-related risks and opportunities to help them make informed decisions.

5.    In her keynote address, Sue Lloyd, Vice-Chair, ISSB, provided an insight into what to expect with the launch of the standards and how such standards will impact the future of assessing enterprise value 

ESG & Intangible Assets (IA) Valuation Working Group

6.    The ESG & IA Valuation Working Group was formed in 2021 to develop ESG & IA valuation guidelines. IVAS will chair the Working Group comprising the American Society of Appraisers (ASA), Chartered Business Valuator Institute (CBV Institute), and the Royal Institution of Chartered Surveyors (RICS) from 2022 to 2024. IVAS will be engaging their members to look at how ESG risks and opportunities can impact the value of IA and overall Enterprise Value to prepare the industry for any new requirements in disclosure standards. The Institute will also work in close consultation with the wider industry when developing guidelines on IA valuation.

Practice Guides

7.    IVAS issued three Practice Guides for CVA Charter Holders on key Business Valuation matters over 2021 and 2022. These were: ‘Important Considerations Regarding the Impact of IBOR Reform on Valuations’; ‘Minimum Requirements for Performing Valuations and Issuing Business Valuation Reports’; and ‘Minimum Disclosure Requirements for Summary Valuation Letters’. 

Developing Business Valuation expertise 

8.    Market demand for certified Business Valuation professionals is set to rise as Business Valuation develops as a growth area.  

9.    “As the business environment evolves, valuation professionals can, and should, step in to help businesses assess and consider the impact of ESG factors on the value of enterprises,” said Mr Lie Kok Keong, CVA, Council Chairman, Institute of Valuers and Appraisers, Singapore (IVAS), and Partner, Co-head, Mergers and Acquisitions, PwC Singapore. (Please click here for Mr Lie Kok Keong’s speech)

Refresh of the Chartered Valuer and Appraiser (CVA) programme

10.    The Chartered Valuer and Appraiser (CVA) programme, a professional business valuation qualification benchmarked against IVSC’s International Valuation Standards (IVS), has been  undergoing a refresh since January 2021. It has been aligned with the latest IVS and includes new topics such as the impact of ESG on valuations. The refresh will be completed by January 2023 with the launch of the Capstone module. 

11.    There are currently 246 Chartered Valuer and Appraiser (CVA) Charter Holders from Singapore, Australia, Hong Kong, India, Indonesia, Korea, Malaysia, Philippines, Taiwan, Thailand and Vietnam. 

Introduction of the Associate CVA designation 

12.    The Associate CVA designation was introduced in March 2022 to recognise individuals who have completed the CVA programme and are working to get the required valuation experience to become a CVA Charter holder. A total of 300 individuals were conferred the Associate CVA designation.

IVAS-IVSC Business Valuation Conference 2022

13.    The two-day conference features 22 speakers and panellists, with over 800 registrations from thought leaders, policy makers, business leaders, legal professionals, and Business Valuation professionals from Singapore and 21 countries. 

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About Singapore Accountancy Commission:

The Singapore Accountancy Commission (SAC) spearheads the development of the Singapore accountancy sector with the vision of developing Singapore into a leading global accountancy hub. SAC is working to achieve this by deepening the skills of the accountancy talent pool; developing the industry to capture growth opportunities; and creating a hub and exchange by building Singapore into a centre for thought leadership. SAC is a statutory body under the Ministry of Finance.  

About Institute of Valuers and Appraisers, Singapore (IVAS):

Established under the umbrella of the Singapore Accountancy Commission, the Institute of Valuers and Appraisers, Singapore (IVAS) seeks to foster professional excellence in the areas of business valuation, and develop Singapore into a Centre of Excellence for business valuation through:

•    Development of competency frameworks;

•    Promotion of professional valuation standards;

•    Setting of ethical and professional standards of practice;

•    Contributions in thought leadership, research and development;

•    Provision of quality education and training curriculum; and

•    Promotion of professional qualification and certification in business valuation

Through these initiatives, IVAS will seek to broaden the talent pool, deepen the expertise of business valuation professionals, uphold the public trust in the role they perform and enhance the reputation of the business valuation profession in the region. 

About International Valuation Standards Council (IVSC):

The International Valuation Standards Council (IVSC) is an independent, not-for-profit organisation that produces and implements universally accepted standards for the valuation of assets across the world in the public interest. The IVSC consists of representatives from a wide range of sectors, including professional valuation institutes, valuation providers, standard setters, regulators of valuation services and academia. The organisation’s mission is to establish and maintain effective, high-quality international valuation and professional standards, and to contribute to the development of the global valuation profession, thereby serving the global public interest. For more information, please visit https://www.ivsc.org.