Environmental risks and opportunities impact both financial forecasts and valuation multiples (Option C) by:
Adjusting revenue and cost projections (e.g., higher carbon taxes or lower energy costs from renewables).
Affecting valuation multiples, as companies with strong ESG performance often receive higher price-to-earnings (P/E) or lower discount rates due to reduced risk.
Option A (Financial forecasts only) ignores the impact on valuation multiples.
Option B (Valuation multiples only) overlooks how environmental risks affect revenue, costs, and profitability.
[References:, PRI ESG Valuation Guide, MSCI ESG and Equity Valuation Report, S&P Global: ESG Integration in Equity Analysis, , , , , ]
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