Enterprise value and Ethics washing: Difference between pages

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1.  ''Traditional corporate finance.''
''Law - regulation - ethics.''


(EV).
Ethics washing is a derogatory term for the overstatement of an organisation's ethical concerns and actions, or those of a sector.


The total value of a commercial business, whether funded by equity alone or by a combination of equity and debt.  
Potentially with the effect - or intention - of delaying effective law-making and external regulation of the sector.


Also known as the 'entity value'.


For example, if the sector were to set up panels and similar bodies in relation to its ethics, and to successfully publicise these efforts, all of this might slow down the implementation of necessary laws and effective external regulation of the sector.


In traditional corporate finance, where the business is funded by both debt and equity the EV is given by:
In other words - the argument goes - the issues and related protections for affected individuals and the public should be a matter of law, and not dependent on the ethical standards of the dominant actors in the market.


EV = market value of debt + market value of equity


Examples might include the privacy of internet users.


2.  ''Sustainability - integrated reporting.''
The term ''ethics washing'' is derived from - and analogous with - greenwashing in relation to environmental concerns.
 
A fuller and longer-term concept of value, taking account of the full range of factors that materially affect the ability of an organisation to create value over time.
 
This includes understanding of the organisation's different types of capita and their independencies, including:
* natural capital,
* intellectual capital,
* human capital, and
* social and relationship capital.
 
 
In theory - and assuming fully efficient and rational markets - this broader conception of value would already be reflected in the current market values of the organisation's debt and equity.
 
However, advocates of more fully integrated reporting believe that markets and market information are not yet fully efficient in this sense.




== See also ==
== See also ==
* [[Corporate finance]]
* [[Climate-washing]]
* [[Efficient market]]
* [[Ethics]]
* [[Enterprise]]
* [[Greenwash]]
* [[Entity]]
* [[Law]]
* [[Human capital]]
* [[Regulation]]
* [[Integrated reporting]]
* [[Transparency]]
* [[Intellectual capital]]
* [[Window-dressing]]
* [[Market value]]
* [[Natural capital]]
* [[Relationship capital]]
* [[Social capital]]
* [[Social and relationship capital]]
* [[Sustainability]]


[[Category:Accounting,_tax_and_regulation]]
[[Category:The_business_context]]
[[Category:The_business_context]]
[[Category:Corporate_finance]]
[[Category:Compliance_and_audit]]
[[Category:Ethics]]

Revision as of 02:58, 17 January 2022

Law - regulation - ethics.

Ethics washing is a derogatory term for the overstatement of an organisation's ethical concerns and actions, or those of a sector.

Potentially with the effect - or intention - of delaying effective law-making and external regulation of the sector.


For example, if the sector were to set up panels and similar bodies in relation to its ethics, and to successfully publicise these efforts, all of this might slow down the implementation of necessary laws and effective external regulation of the sector.

In other words - the argument goes - the issues and related protections for affected individuals and the public should be a matter of law, and not dependent on the ethical standards of the dominant actors in the market.


Examples might include the privacy of internet users.

The term ethics washing is derived from - and analogous with - greenwashing in relation to environmental concerns.


See also

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