Effects and opportunities of climate change on a company´s Goodwill

• Amir Ahmad Dar ^[1] ; Akshat Jain ^[1] ; Mehak Malhotra ^[1]
  1. [1] Lovely Professional University

     Lovely Professional University

     India

     
• Localización: Climate change and finance: navigating the challenges and opportunities in capital markets / Nader Naifar (ed. lit.), 2024, ISBN 978-3-031-56418-5, págs. 279-298
• Idioma: inglés
• Texto completo no disponible (Saber más ...)
• Resumen

  • Goodwill refers to reputation. In business and accounting, it refers to the intangible asset representing the excess value of a company's tangible and identifiable assets over its liabilities. It is essentially the value of a company's reputation, brand, customer loyalty, and other intangible factors that contribute to its success and ability to generate earnings above the value of its net assets. There are various methods for estimating the value of the Goodwill of a firm. The methods are the super profit, annuity, capitalization, etc. The main parameters used to estimate the value of goodwill as per the above models are normal profit, super profit, interest rate, number of purchased years, etc., which are all factors that impact the value of the goodwill. But some other factors impact it. In this chapter, we will discuss the effects and opportunities of climate change on a company’s reputation. The effects of climate change on goodwill will vary depending on the industry and region, and the steps taken by the company to manage climate-related risks it is vital to emphasize. A real-world example of how climate change can affect a company's goodwill and reputation is the case of BP (British Petroleum) and the Deepwater Horizon oil spill in 2010 was explained in this study.