ESG in valuation and credit analysis

Module 03 / 5 · 65 min

Bring ESG risks and opportunities into cash flows, discount rates and scenarios without double counting, and show their effect on value and debt capacity.

In this module you will learn to

Translate ESG findings into specific cash flow lines: capex, opex, revenue at risk and downtime
Explain when to adjust the discount rate and why adjusting both rate and cash flows double counts
Build probability-weighted scenarios for climate and social risk and read their effect on enterprise value
Show how ESG risks change debt capacity and covenant headroom in credit analysis

Built on

Erudite Africa course specification 3.k: ESG Integration in Investment Banking, Levels 1 and 2 (October 2026)
Erudite Africa Training Module: Ethiopian Context, programme overview and regulatory register (October 2026)
NBE Directive No. SBB/91/2024 (Bank Corporate Governance); ECMA Directive No. 1030/2024 (reported); Environmental Impact Assessment Proclamation No. 299/2002, Environmental Pollution Control Proclamation No. 300/2002 and Labour Proclamation No. 1156/2019, as cited in the course specification
World Bank Group: Ethiopia Country Climate and Development Report (2024); A Review of Industrial Parks in Ethiopia (2022); Making Ethiopia's Financial Sector Work for Women (2024)
IFC Performance Standards, Equator Principles (EP4), ICMA Green, Social and Sustainability-Linked Bond Principles, loan market sustainability-linked loan principles, SASB, ISSB IFRS S1 and S2, TCFD and UN PRI (general market practice)

Examples and companies are fictional. Bank practices are shown as typical Ethiopian practice, not as any one bank's policy. Always apply your own institution's approved policy and the current NBE directives.