Discounted cash flow (DCF) analysis is a method of valuing security, project, firm, or asset using the time value of money. All future cash flows are estimated and discounted by using the cost of capital to express their present values. Cash flows in the numerator of the formula need to keep an intrinsic consistency with the cost of capital in the denominator that incorporates risk factors. This well-known framework reflects the forecast business model of the firm that incorporates trendy issues like Environmental, Social, and Governance (ESG) drivers, and other sustainability patterns, ranging from corporate social responsibility (CSR) concerns to circular economy issues. The digital dimension also contributes to reshaping the DCF metrics, easing the circulation of big data that soften information asymmetries. Intangible-driven scalability potential reflects in higher economic and financial marginality, proxied by the EBITDA or other parameters, and fostered by B2B2C-enabling digital platforms. The impact of social responsibility and ESG compliance on the creation of market value for firms and investors is still questioned. Rating issues for ESG-compliant funds remain controversial. Further research is so needed to analyze this interdisciplinary issue.
https://www.researchgate.net/publication/344953641_DCF_METRICS_AND_THE_COST_OF_CAPITAL_ESG_DRIVERS_AND_SUSTAINABILITY_PATTERNS