Enterprise value has moved beyond buildings and cash. Most value now comes from intangibles, such as brands, people, technology, and ESG. What matters most is not a "one-size-fits-all" story. It depends on company type, industry, and stage of growth.
Investors now treat ESG data as "pre-financial" information and expect finance leaders to show how sustainability drives value. Maureen Brock, an expert 8020 Consultant and seasoned controller with extensive private equity experience, sees this shift firsthand in how different company types approach value measurement. With most intangibles off the balance sheet, stronger intangible asset reporting is needed to narrow the gap between book and market value.
The article explores brand valuation, integrating ESG into financial models, the impact on valuation and investor relations, and new disclosure rules. As Maureen puts it, "You don't know what you don't know... You have to dive in and figure it all out." That mindset defines the shift from CFO to chief value officer.
The Rise of Intangible Value
A 2024 study shows 79% of global intangible value is missing from balance sheets, leaving a wide gap between book value and market worth.
Four categories drive this value: brands, human capital, customer franchises, and technology. Strong brands build trust, employees fuel innovation, loyal customers provide stable cash flows, and proprietary technology creates barriers to competition. Together, these form the "intangible advantage." Investment decisions hinge on fundamental questions: "What are you doing here? Why are you doing that?"
ESG magnifies these assets. Investments in sustainability, social programs, and governance build reputation, loyalty, and engagement while technology improves efficiency and reduces risk. Value creation appears in three channels: direct (efficiency gains), indirect (brand perception and employee satisfaction), and scalable (embedding ESG into culture and processes). Organizations should measure returns through intangible asset growth rather than short-term earnings. "All of it, I would say, is more just the overarching big picture. You want a message that your business and your product have some positive impact."
How Intangibles Vary by Company Type
Company type shapes how leaders view intangibles and ESG. Priorities shift between public corporations, private equity-backed firms, and high-growth startups. As Maureen Brock notes: "ESG just doesn't come to mind for me [in private equity]. The investors look at different things. Cash flow is number one."
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Public Companies treat ESG and intangible asset reporting as baseline expectations. Investors want transparency on sustainability, human capital, and brand performance. SEC rules require disclosure, and strong reporting directly affects reputation, stock price, and market perception.
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Private Equity-Backed Firms view ESG as a tool for risk reduction and value creation. While less regulated, they rely on ESG to cut costs, improve operations, and raise exit multiples. Yet, as Maureen explains, "the private equity investors look at different things," with cash flow still the top priority.
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Smaller and High-Growth Firms focus on intangibles that position them for future funding or acquisition. ESG and branding matter, but near-term efforts emphasize culture, employee engagement, and building customer trust. Limited resources push these companies toward targeted initiatives that strengthen human capital while laying the groundwork for more advanced measurement as they scale.
Tools for Financial Forecasting
Finance teams often struggle to show brand value in ways that boards and investors understand. Successful approaches link brand strength directly to financial impact. ISO 10668, the global standard for brand valuation, defines a brand as a marketing-related intangible asset that creates economic benefits through names, terms, and logos.
Here are the six steps that bring structure to brand valuation:
1. Define The Brand
Clearly establish what constitutes the brand being valued, including its scope, geographic boundaries, and component elements. Document all brand assets such as trademarks, trade names, domain names, and visual identity elements.
Determine whether you're valuing the entire brand portfolio or specific sub-brands, and establish clear boundaries around what's included versus excluded. Consider how the brand operates across different markets, product lines, and customer segments to ensure comprehensive coverage.
2. Clarify Purpose
Determine why the valuation is needed, whether for investment decisions, acquisition analysis, financial reporting, or strategic planning purposes. The valuation purpose drives methodology selection and determines the level of precision required.
Internal strategic planning may require different approaches than external financial reporting or transaction support. Understanding the intended use helps establish appropriate assumptions and ensures the final valuation meets stakeholder needs.
3. Identify Premise of Value
Establish the context and fundamental assumptions that will guide the valuation, including the perspective of the valuation and relevant market conditions. Consider whether you're measuring fair value, investment value, or liquidation value, as each requires different assumptions.
Evaluate market dynamics, competitive positioning, and economic factors that could impact brand performance. Document key assumptions about growth rates, market share, and competitive threats that will influence the valuation outcome.
4. Select Valuation Approach
Choose from three main methods, depending on data and goals:
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Income approach
Uses discounted cash flow to project future benefits.
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Market approach
Compares the brand to similar assets through comparable transactions or market multiples
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Cost approach
Estimates the expense required to recreate or replace the brand asset
5. Set Assumptions and Conduct Analysis
Build detailed financial models with realistic assumptions about growth rates, discount rates, and market dynamics that affect brand value. Gather historical performance data to establish baseline metrics for revenue attribution, price premiums, and customer behavior patterns.
Project future cash flows based on brand strength indicators such as market share trends, customer loyalty metrics, and competitive positioning. Apply appropriate risk adjustments through discount rates that reflect brand-specific risks, including market volatility, competitive threats, and regulatory changes. Validate assumptions through sensitivity analysis to understand how key variables impact the final valuation range.
6. Prepare the Report
Document findings, methodology, and supporting analysis to create a defensible valuation that stakeholders can understand and use for decision-making.
Real value emerges when organizations connect brand strength to measurable financial outcomes. Forward-thinking CFOs focus on metrics that directly impact enterprise value: price premium and customer lifetime value.
As Maureen Brock noted in a recent discussion, "customer acquisition costs and lifetime value of a customer" are fundamental to subscription-based businesses where "keeping them around for three, four, five years is exponential in their revenue model." Strong brands earn the ability to charge more than market rates and keep customers coming back, which raises lifetime value. Those advantages flow straight into healthier margins and a stronger, longer-lasting competitive edge.
Integrating ESG into Financial Modeling
The most significant shift in finance is recognizing that ESG factors are not “non-financial” but pre-financial data that shape long-term cash flow. Traditional accounting looks backward at earnings, while ESG investments build intangible assets that compound value over time. Strong intangible asset reporting makes these connections clear.
Different company types approach ESG in unique ways. Public firms emphasize disclosure and investor trust. Private equity-backed businesses focus on risk reduction and stronger exit multiples. High-growth companies rely on ESG to attract talent and build culture. These distinctions help leaders design measurement strategies that fit their model.
ESG returns hinge on six traits: brand strength, human capital intensity, value-added models, customer proximity, tangible asset intensity, and proprietary technology. Brand-driven companies benefit most from reputation-building, while people-focused firms gain from employee investment. Asset-heavy or tech-dominant firms often see lower relative returns, so CFOs need to direct ESG resources where they deliver the greatest intangible asset value.
Difficulties of Integrating ESG into Financial Modeling
Traditional ROI analysis falls short with ESG investments because benefits are spread across the enterprise rather than a single product or project. An employee wellness program, for example, delivers returns through lower turnover, stronger productivity, better customer service, and improved brand reputation. These outcomes do not fit neatly into the compartmentalized analysis used for equipment purchases or product launches.
As Maureen observed from her private equity experience, "cash flow is number one," yet linking ESG initiatives directly to cash flow is difficult. Gains often appear through efficiency, risk reduction, or market positioning, which traditional models fail to capture.
CFOs need an intangible asset lens. Stronger intangible asset reporting helps reveal how ESG investments build brand equity, human capital, customer loyalty, and operational strength. Integrating ESG metrics into FP&A models with scenario analysis allows leaders to test how different investment levels influence long-term cash flow, risk exposure, and market valuation.
Impact on Valuation, Investor Relations & Capital Access
Strong ESG integration and clear intangible asset reporting create benefits that extend far beyond compliance. Finance leaders can unlock value in four areas that directly shape enterprise performance and stakeholder trust.
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Validation Uplift
Well-measured intangibles supported by ESG strategies lift valuation multiples. Strong brands command premium pricing and higher margins, while investors reward businesses that demonstrate how brand equity, human capital, and ESG create lasting advantage.
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Closing the Disclosure
Most internally developed intangibles remain off the balance sheet, leaving a gap between book value and market value. Transparent intangible asset reporting narrows this gap, builds trust, and gives stakeholders a fuller picture of enterprise worth. Greater visibility also attracts stronger analyst coverage and institutional interest.
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Access to Capital
Banks like RBC and JP Morgan now accept intellectual property as loan collateral, expanding financing options for intangible-heavy firms. Companies with credible ESG strategies also gain access to green bonds and sustainability-linked loans, often at more favorable rates. These channels align capital with long-term growth and sustainability.
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Investor Relations Strategy
A compelling ESG equity story links sustainability directly to financial performance. CFOs should disclose ESG metrics and intangible valuations, engage with rating agencies, and align ESG KPIs with executive compensation to demonstrate accountability.
Public companies face the highest disclosure demands, PE-backed firms use ESG to de-risk and boost exit value, and high-growth companies lean on intangibles to strengthen funding and future liquidity events.
Taking Action - How CFOs Can Lead Intangible Value Measurement
Turning ideas into results requires a structured approach. CFOs can move beyond traditional scorekeeping by following four steps that build momentum toward credible management and clear intangible asset reporting.
Step 1: Identify and Value Your Intangible Assets
Start with a complete inventory of both acquired and internally generated intangible assets across your organization. Document brand elements, customer relationships, proprietary technologies, and human capital investments that drive competitive advantage.
Engage external valuation experts to establish baseline values for material intangible assets using recognized frameworks like ISO 10668. Once valued, disclose these assets transparently in financial statement notes to provide stakeholders with visibility into hidden value drivers.
Step 2: Integrate ESG Metrics Into Financial Planning
Integrate sustainability targets into long-term plans and scenario modeling. Test how ESG investments influence cash flow, risk, and market position. Tie these measures to outcomes, like customer retention, employee engagement, efficiency, and brand strength. As Maureen emphasized, successful integration requires "collaborative communication" across departments.
Step 3: Strengthen Governance and Risk Management
Expand risk configurations to cover ESG risks and opportunities. Ensure the board understands its oversight role through regular reporting and education on intangible growth. Establish policies for accurate data collection and assurance to protect the integrity of intangible asset reporting.
Step 4: Champion Integrated Value Communication
Adopt a chief value officer mindset. Use integrated reports to connect financial results with intangibles, ESG progress, and strategy. Clear narratives help investors and stakeholders see how intangible assets drive competitive advantage and long-term value creation.
From CFO to Chief Value Officer
The future of enterprise value lies in intangibles and ESG performance. Traditional accounting measures physical assets but ignores the brands, relationships, capabilities, and sustainability practices that drive market worth.
Finance leaders need to expand their toolkit: apply standards for brand valuation, integrate ESG into financial models, strengthen reporting, navigate new disclosure rules, and communicate intangible value to investors. Finance leaders who master these skills unlock higher valuations, reduce capital costs, and build stakeholder trust.
The CFO role has shifted from scorekeeper to strategic champion, from backward-looking analyst to forward-looking value creator. Finance leaders aren't just CFOs anymore. They're chief value officers. Organizations can partner with specialists like 8020, who combine finance expertise with intangible value measurement. Modernize your approach and gain the strategic advantage that separates leaders from those left undervalued.