The increasing concerns regarding climate change, inequality, and other environmental and social issues are compelling companies to give more thought to their corporate social responsibility (CSR) practices. Advocates have suggested incorporating environmental, social, and governance (ESG) considerations into corporate finance strategies. While the traditional corporate finance approach focuses on maximizing shareholder value, there has been a shift towards prioritizing stakeholder value in recent years.

Based on the valuation models you have learned, how can we incorporate ESG into firms valuation? (Hints: think about discount rate, cashflows and growth rate).