Student project helped Deloitte capture ESG performance in company valuation

Anna Rantala and Jędrzej Bugowski, Master accounting students at Aalto University School of Business, have finalized a student project for Deloitte. They investigated the impact of ESG performance* on company valuation in M&A transactions. Through a series of interviews with Deloitte professionals, consultation of academic research, and with the help of industry reports, students identified a list of sustainability topics that directly influence company valuation, as well as successfully demonstrated how they can be utilized in the valuation process. (*Environmental, social and governance (ESG) impacts of the activities) 

The aim was to develop an operational model that would help to quantify, in terms of monetary value, which ESG factors play a role in M&A processes and how they influence future company value. The final model developed by the students concentrated on the risk and opportunity analysis of sustainability-related topics and their monetary measures, such potential costs they could generate, or possible increases in company revenues they could bring. The project's findings were presented in a detailed presentation delivered to Deloitte, on May 23rd, 2024.    

‘Working with such novel topics as company’s ESG performance is a true challenge. Not only has it taught us more about the subject and its incredible complexity, but it has also given us tools to learn quickly and succeed as future professionals,’ say Anna and Jędrzej.   

Applying Academic Frameworks to Real-World Cases   

The model designed by the Aalto students can be further tailored to Deloitte's needs and employed in the company’s M&A advisory engagements. Developing the model involved applying traditional valuation frameworks to contemporary scenarios faced by businesses and advisory firms. The academic support from supervisor Bianca Beyer, Assistant Professor of Accounting, was instrumental, helping balance the integration of academic research methods with their practical applications.   

Through close collaboration with Deloitte professionals, the project evolved over the spring, with multiple meetings organized. These shared discussions enabled the students to gain a deeper understanding of the client's situation. ‘We are very pleased with the collaboration during the spring and all the insightful conversations we had,’ commented Leea Uusi-Hautamaa, Partner and Head of Forensic at Deloitte Finland.   

Ultimately, the students successfully developed a tailored framework to tackle the challenges of capturing the value of ESG. ‘Anna and Jędrzej gained invaluable work-life skills that complement their academic knowledge and had a chance to meet potential future employers,’ comments Assistant Professor Bianca Beyer. All of this made the Aalto student project with Deloitte a truly enriching experience.