Search Results (71)

The link between ESG and financial performance is still under debate. In this study, we explore which aspects of ESG specifically drive market valuations through both systematic and idiosyncratic risk channels. We analyze the impact of the three core ESG pillars, 10 subcategories, and associated controversies on market valuations in the energy sector. This analysis reveals that the environmental factor has a stronger impact (regression coefficient = 0.05) than the governance factor (regression coefficient = 0.003), emphasizing the need to prioritize environmental performance in ESG strategies. The positive coefficients for environmental resource use (0.005) and innovation (0.008) indicate that investments in efficiency and clean technologies are beneficial, while the negative coefficient for emissions (−0.004) underscores the risks associated with poor emissions management. These findings suggest that environmental risks currently outweigh governance risks for the energy sector, reinforcing the importance of aligning governance practices with environmental goals. To maximize ESG effectiveness, energy firms should focus on measurable improvements in resource efficiency, innovation, and emissions reduction and transparently communicate this progress to stakeholders. The evidence suggests that energy firms approach the ESG landscape differently, with sustainability leaders benefiting from higher valuations, particularly when ESG efforts are aligned with core competencies. However, many energy companies under-invest in value-creating environmental initiatives, focusing instead on emission management, which erodes value. While they excel in emission control, they lag in innovation, missing opportunities to enhance valuations. This underscores the potential for ESG risk analysis to improve portfolio performance, as sustainability can both create value and mitigate risks by factoring into valuation equations as both risks and opportunities. This study uniquely contributes to the ESG–financial performance literature by disentangling the specific ESG dimensions that drive market valuations in the energy sector, revealing that value is created not through emission control but through strategic alignment with eco-innovation, governance, and social responsibility. Full article

The financial valuation of professional football players is influenced by multiple factors that evolve throughout a player’s career. This study examines these determinants using Gradient Boosting Machine Learning models, segmented by three age categories and three playing positions to capture the dynamic nature of player valuation. K-fold cross-validation is applied to measure accuracy, with results indicating that incorporating a player’s projected future potential improves model precision from an average of 74% to 84%. The findings reveal that the relevance of valuation factors diminishes with age, and the most influential features vary by position—shooting for attackers, passing for midfielders, and defensive skills for defenders. The study adopts a dynamic segmentation approach, providing financial insights relevant to club managers, investors, and stakeholders in sports finance. The results contribute to sports analytics and financial modeling in sports, with applications in contract negotiations, talent scouting, and transfer market decisions. Full article

The real estate sector is increasingly recognizing facility management (FM) as a key driver of asset value. Among emerging technologies, Building Information Modeling (BIM) and Building Management Systems (BMSs) stand out for their potential to enhance FM efficiency by integrating design data with building operations across the entire lifecycle, from construction to maintenance, performance monitoring, and renovation. While their technical applications have been widely studied, the financial impact of these tools on FM remains underexplored. This paper addresses that gap by estimating the economic value generated by implementing BIM and BMS in real estate facility management. Based on thirteen semi-structured interviews with professionals from the Italian real estate sector, we identified and quantified cost-saving factors and challenges related to digital adoption. These cost efficiencies, when recurring and quantifiable, can improve net operating income (NOI), thereby supporting higher asset valuations under income-based real estate appraisal methods. The results show that integrating BIM and BMS in facility management may generate average annual cost savings of 5.81% relative to asset value, with coordination improvements alone accounting for up to 3.28% per year. Based on a 30-year simulation, these savings correspond to a positive Net Present Value (NPV), supporting the financial viability of digital FM adoption in real estate. This study offers empirical evidence to support investment decisions in digital FM technologies and contributes to bridging the gap between innovation and financial evaluation in the real estate sector. Full article

This study investigates the impact of Environmental, Social, and Governance (ESG) certifications on the performance of Class A office buildings within Madrid’s Central Business District (CBD). Employing a Multi-Criteria Decision Making (MCDM) methodology, the research evaluates 21 office properties, analyzing the influence of ESG certifications on key performance indicators, including green building certifications, valuation, market perception, and financial outcomes. The findings reveal that ESG-certified buildings demonstrate superior performance, commanding higher valuations, mitigating brown discounts, and achieving increased rental rates, thereby enhancing their investment attractiveness. These results underscore the importance of ESG certifications in the Spanish office market and provide valuable insights for investors, developers, and policymakers navigating the integration of sustainability and commercial real estate. Full article

This paper explores optimal consumption and investment strategies for agents facing mortality risk within a complete financial market. Departing from traditional frameworks, we leverage state-dependent utility theory, discounted by the state–price process, to compare consumption streams and utilize life insurance as a strategic hedging instrument. To model the ability of insurance companies to hedge the mortality risk of consumer pools, we introduce the concept of life insurance completeness, allowing individuals to achieve optimal consumption even in scenarios involving negative wealth. Our model relaxes the stringent integrability conditions commonly imposed in the literature, offering a more economically grounded approach to valuation and hedging. We derive a general solution to the optimization problem using martingale techniques under minimal assumptions, demonstrating that life insurance primarily serves as a mortality risk hedge rather than a bequest motive. This perspective resolves longstanding theoretical and empirical challenges, notably the annuity puzzle, by illustrating that optimal consumption and investment, in the absence of labor income, do not necessitate annuities or other life insurance policies. Our key contributions include (1) extending valuation frameworks to encompass prepaid insurance and less restrictive integrability criteria, (2) establishing life insurance completeness for effective mortality risk hedging, (3) demonstrating the feasibility of optimal consumption under negative wealth and state-dependent preferences, and (4) offering a resolution to the annuity puzzle that aligns with empirical observations. Full article

This study comparatively examines the determinants of yield spreads for Sukuk and conventional bonds, with a particular focus on the role of firms’ environmental, social, and governance (ESG) performance. Using a dataset comprising 744 bond-year observations from issuers in countries with prominent dual financial systems—namely, Saudi Arabia, UAE, Turkey, Malaysia, and Indonesia—over the period 2008 to 2022, this analysis identifies distinct mechanisms that influence yield spreads in these asset classes. For robustness, the sample excludes financial institutions to prevent industry-weight distortion and to account for their distinct risk–return profiles, which require differentiated valuation approaches for conventional bonds and Sukuk. Drawing primarily on decoupling, information asymmetry, and legitimacy theories, our empirical results reveal that robust ESG performance is significantly associated with lower yield spreads for both Sukuk and conventional bonds. Moreover, the study explores the moderating effect of investment horizons on the ESG–yield spreads relationship, uncovering evidence of differentiated investor behavior in relation to yield curve positioning. These findings, robust across various regression specifications, underscores the pivotal role of ESG factors as firm-level drivers of financing costs, offering new insights for scholars, policymakers, and practitioners in the sustainable finance domain. Full article

This study investigates the impact of environmental variables, such as carbon emissions and temperature anomalies, on cryptocurrency returns. While existing research has primarily focused on economic and financial determinants, the influence of environmental factors remains underexplored. Using Dynamic Conditional Correlation GARCH (DCC-GARCH) and Time-Varying Coefficients Vector Autoregression (TVC-VAR) models, this study provides empirical evidence that environmental variables significantly affect the volatility and returns of Bitcoin, Ethereum, and Tether. The results show that Bitcoin and Ethereum are highly sensitive to CO₂ emissions and temperature fluctuations, while Tether demonstrates a more moderate response. Moreover, the impact of these environmental factors evolves over time, underscoring their dynamic nature in cryptocurrency valuation. These findings highlight the importance of incorporating environmental variables into forecasting models to enhance risk management and investment strategies. This study contributes to the literature by bridging the gap between environmental concerns and cryptocurrency market behavior, offering valuable insights for investors, regulators, and policymakers. Full article

The untapped potential of wave energy offers another alternative to diversifying renewable energy sources and addressing climate change by reducing CO₂ emissions. However, development costs to mature the technology remain significant hurdles to adoption at scale and the technology often must compete against other marine energy renewables such as offshore wind. Here, we conduct a real option valuation that includes the uncertain market price of wholesale electricity and managerial flexibility expressed in determining future optimal decisions. We demonstrate the probability that the project’s embedded compound real option value can turn a negative net present value wave energy project to a positive expected value. This change in investment decision uses decision tree analysis, where real options are developed as decision nodes, and models the uncertainty as a risk-neutral stochastic process using chance nodes. We also show how our results are analogous to a financial out-of-the-money call option. Our results highlight the distribution of outcomes and the benefit of a staged long-term investment in wave energy systems to better understand and manage project risk, recognizing that these probabilistic results are subject to the ongoing evolution of wholesale electricity prices and the stochastic process models used here to capture their future dynamics. Lastly, we show that the near-term optimal decision is to continue to fund ongoing development of a reference architecture to a higher technology readiness level to maintain the long-term option to deploy such a renewable energy system through private investment or private–public partnerships. Full article

As investors increasingly incorporate non-financial performance metrics into investment decisions, CSR has become valuable due to its implications for voluntary disclosures and third-party ratings. Building on this premise, our study examines how green-bond issuance signals environmental commitment and is associated with ESG performance and valuation. While other studies examine this association, we go a step further and identify the green-bond features which are associated with ESG ratings. Using the Bloomberg database, we downloaded corporate green-bond data for 2550 green bonds. We use signaling theory as the foundation of the study. We deploy regression to test the relationships. Our findings show that green-bond features are associated with enhanced environmental and ESG disclosure scores but not with reductions in CO₂ emissions relative to sales. The findings show weak associations of ESG with green-bond features. Taken together, the results contradict ‘greenwashing’ claims. However, the findings confirm that companies effectively signal environmental commitment through green-bond issuance. These insights enhance the understanding of green bonds’ nature and dimensions while providing meaningful implications for corporate policy. Full article

This study investigates how energy retrofitting measures contribute to increasing the market value of multi-family residential buildings within the European real estate market. It examines how energy efficiency improvements, driven by EU decarbonization strategies, enhance the actual and perceived value of these properties. The research employs a dual-methodology approach, integrating the Cost Approach to estimate the financial impact of retrofitting with the Contingent Valuation Method (CVM) to evaluate consumer willingness-to-pay (WTP) for energy-efficient properties. Two real case studies are considered to evaluate the methodology and how the monetary value of buildings is affected by their energy efficiency. The results revealed that buildings subjected to deep energy retrofitting are more attractive to potential buyers, who are willing to pay a premium of 13.5% over properties in pre-retrofit conditions. This underscores the tangible market value increment attributed to energy efficiency enhancements. This study bridges the gap between the quantifiable costs of energy retrofitting and the market valuation, offering a dual perspective by integrating both actual cost analysis and perceived market value. Moreover, this work highlights the correlation between energy retrofit investments and increased market value in the European real estate sector. Full article

This study examines the integration of multi-real-option valuation and security token offering (STO) as an innovative approach to real estate project financing. The case study of Aspen Resort Development serves to illustrate this methodology. The traditional discounted cash flow (DCF) method is frequently ill-suited to the dynamic and uncertain nature of long-term real estate projects, particularly in regard to the ability to adapt to market fluctuations. In order to address these limitations, this study employs a multi-real-option model with a binomial lattice framework, thereby facilitating flexible decision-making in various investment stages. The analysis demonstrates that the STO-based project financing (STO-PF) model offers enhanced financial performance and strategic advantages in comparison to the conventional DCF approach. Furthermore, the STO-PF model has the effect of increasing liquidity, expanding investment accessibility, and improving risk management through the utilization of digital platforms. By quantifying the project’s extended net present value (ENPV), the integration of STOs with real-options models can facilitate optimal investment decisions in the context of a high level of market volatility. Consequently, the STO-PF model is determined to yield a project value (E) of USD 7.34 million and a real-options value (ROV) of USD 3.69 million. This is markedly higher than the net present value (NPV) of USD 3.65 million derived from the traditional project finance (PF) model. Furthermore, the put option for the second investment stage contributes USD 16.45 million to the overall value of the project, thereby demonstrating the flexibility and strategic advantages of the STO framework in comparison to static NPV analysis. The Aspen project serves as a case study, demonstrating the financial viability of phased investments in dynamic market conditions. It contributes to the theoretical understanding of STO-based financing and provides practical insights for developers seeking flexible and innovative financing solutions in the real estate sector. Further research is required to confirm the applicability of STOs in diverse market environments and regulatory contexts. Additionally, in-depth research is necessary to integrate emerging technologies, such as artificial intelligence and machine learning, into multi-real-option-based financial platforms. This integration aims to enhance financial modeling and decision-making processes, as well as to facilitate the integration of digital technologies in this field. Only then can the development and implementation of smart construction development advance. Full article

The possibility of carrying out the cultivation of numerous plant species in vertical farming highlights the need for policy makers to determine the cadastral value of the buildings in which these production activities are carried out. In this regard, estimates of buildings intended to host vertical farming are illustrated according to the procedure established by Italian cadastral legislation, which establishes that the fiscal value of buildings intended for vertical farming must be estimated through their market value. Appraisals is carried out using the direct capitalization method but follow two different approaches. One approach is based on the expertise of the appraiser, who acts by making assessments through subjective and arbitrary choices. The other approach is based on the use of best practices, as indicated by international evaluation standards that follow appropriate methodologies. Our comparison between the two approaches focuses on determining the capitalization rate, which determines the estimated value. The market value estimated using the procedures recognized by the valuation standards appears to be more valid methodologically and more reliable. This is demonstrated by applying yield capitalization to the same income cash flow in both formulations. Additionally, through the identification of the conversion cash flow, useful details on financial flow can be obtained and used to determine the value. The obtained results may be useful for public operators for the purposes of determining the value of assets for tax purposes. More generally, they are also useful from a methodological and application point of view in real estate valuation and support the development of tools for making efficient investment choices. Full article

The concept of fair value, defined by the valuation of assets and liabilities at their current market worth, remains central to the International Financial Reporting Standards (IFRS) and has persisted despite critiques intensified by the 2008 financial crisis. This valuation method continues to be prevalent under both IFRS and the US Generally Accepted Accounting Principles (GAAP). The adoption of IFRS has notably enhanced the role of accounting in information analysis, vital for owners who prioritize both secure accounting practices and reliable data for strategic management decisions. Real estate, a significant business asset, has long been a focal point in accounting discussions, prompting extensive research into the applicability and effectiveness of various accounting standards. These investigations assess the adaptability of standards based on property type, utility, and valuation techniques. However, the challenge of accurately determining the fair value of real estate remains unresolved, signifying its importance not only in the corporate manufacturing realm but also among development companies striving to manage property values efficiently. This study addresses the challenge of accurately determining the fair market value of real estate in Kazakhstan, leveraging a multi-methodological approach that encompasses statistical models, regression analysis, data visualization, neural networks, and particularly, an Adaptive Neuro-Fuzzy Inference System (ANFIS). The integration of these diverse methodologies not only enhances the robustness of real estate valuation but also introduces new insights into effective asset management. The findings suggest that ANFIS provides superior precision in real estate pricing, demonstrating its potential as a valuable tool for strategic management and investment decision-making. Full article

High investments and low economic efficiency of agricultural biogas plants operating on farms are two of the main barriers to the development of the biogas plant sector. Identification of economic and financial problems related to the operation of such facilities allows for the reduction of entry barriers for private investors, especially farmers. The aim of this research was to analyze the economic efficiency of investing in an agricultural biogas plant operating at a dairy farm. For the analysis, the case study method was applied. The economic efficiency of investment in a biogas plant was assessed using six different cash flow options. The NPV (net present value) and IRR (internal rate of return) methods were applied to assess the economic efficiency of the investment. It was found that the investment project for an agricultural biogas plant with a capacity of 0.499 MW located at a dairy farm required a subsidy of approximately 40–60% of the value of to ensure satisfactory economic efficiency. It has been shown that a particularly important aspect in assessing the economic efficiency of an investment in an agricultural biogas plant is the use of an economic calculation that takes into account the valuation and quantification of all positive external effects of such projects. Full article

Insect-eating bats play a crucial role in agriculture and public health by suppressing populations of agricultural pests and disease vectors. These ecosystem services promoted by insect-eating bats are essential in a world that seeks sustainability in agricultural production and the management of urban areas. Despite Brazil’s status as one of the largest agricultural producers globally, research using insect-eating bats for pest control is lacking. This review underscores the importance of filling this knowledge gap and provides guidelines for future research. Bats exhibit diverse feeding habits and consume significant quantities of insects, including agricultural pests. While studies in the USA and Europe have highlighted insect-eating bats’ role in reducing agricultural losses, research in Brazil is limited. Challenges include the need for more advanced diet analysis techniques, such as DNA metabarcoding, and understanding bat habitat use in agricultural and urban landscapes. Research on natural and artificial roosts’ effectiveness and population dynamics is also essential. Integrating bat conservation into agricultural sustainability requires investment in technological methods, valuation of ecosystem services, population monitoring, habitat use studies and environmental education. Financial incentives and collaboration between sectors are crucial for advancing research and implementing bat-friendly practices in agriculture, ultimately enhancing biodiversity conservation and production sustainability in Brazil. Full article