EVIC (Enterprise Value Including Cash)
EVIC looks like a finance technicality, but it is the number that decides how much of a listed company’s emissions a bank or asset manager carries. Pick the version of enterprise value accountants normally use — the one that subtracts cash — and every financed-emissions figure for your listed-equity and bond portfolio is distorted, usually upward.
The difference between EVIC and standard enterprise value is one word: cash.
EVIC (Enterprise Value Including Cash) is the denominator the PCAF Standard uses to set the attribution factor for listed equity and corporate bonds. It equals market capitalisation + total debt + minority interest, with cash not subtracted (the key difference from standard enterprise value).
EVIC at a Glance
| Property | Value | Notes |
|---|---|---|
| Full name | Enterprise Value Including Cash | Originated with the EU Technical Expert Group on Sustainable Finance |
| Used as | Attribution denominator | The bottom of the PCAF attribution factor |
| Asset class | Listed equity & corporate bonds | Does not apply to other PCAF asset classes |
| Formula | Mkt cap + debt + minority interest | Cash not deducted — the defining difference from standard EV |
| Timing | Fiscal year-end | Same period and currency as the attributed emissions |
| Private / project finance | Total equity + debt | EVIC’s unlisted equivalent for those asset classes |
| Governing standard | PCAF Part A | Listed equity & corporate bonds methodology |
Definition and Formula
Enterprise Value Including Cash is a measure of a company’s total value as seen by all its capital providers, used by the PCAF Standard as an attribution denominator for listed assets. The definition PCAF adopts originates with the EU Technical Expert Group on Sustainable Finance: the sum of the market capitalisation of ordinary and preferred shares at fiscal year-end, plus the book values of total debt and minority (non-controlling) interest.
EVIC = Market capitalisation (common + preferred shares) + Total debt + Minority interest
(cash and cash equivalents are not deducted)
For financing to private companies or project finance, EVIC is defined instead as the total equity plus debt of the company or project — the same total-value logic adapted to entities without a market capitalisation. For listed equity and corporate bonds, the market-based formula above applies.
EVIC vs Standard Enterprise Value
Standard enterprise value subtracts cash, on the acquirer’s logic that the target’s cash could be used to pay down the purchase price. PCAF removes that subtraction. The two measures share every other component — market cap, debt, minority interest — and differ only in the treatment of cash.
| Component | Standard EV | EVIC |
|---|---|---|
| Market capitalisation | Included | Included |
| Total debt | Included | Included |
| Minority interest | Included | Included |
| Cash & equivalents | Subtracted | Not subtracted |
| Primary use | Acquisition pricing, valuation multiples | Emissions attribution denominator |
Why Cash Stays In
Subtracting cash can drive enterprise value close to zero, or negative, for cash-rich companies. As an attribution denominator that is catastrophic: a near-zero denominator sends the attribution factor — and therefore the attributed emissions — toward infinity. By keeping cash in, EVIC stays positive and stable, so the same holding produces a comparable attribution factor across companies with very different balance sheets. The trade-off is sensitivity to market-value swings: because EVIC moves with share price, the attribution factor — and the financed-emissions figure — can shift year to year even when neither the holding nor the company’s actual emissions change.
EVIC is taken at the company’s fiscal year-end and must be held in the same currency and period as the emissions being attributed. Mixing a year-end EVIC with mid-year emissions, or EVIC in one currency with exposure in another, is a frequent verification finding. Note also that emissions data typically lags financial data by about a year, so the matched reporting period — not the latest available figure — is what reconciles.
How to Calculate EVIC — Worked Example
A listed manufacturer, at its fiscal year-end, has 200 million shares trading at €25, total debt of €1.2 billion, and minority interest of €300 million. It also holds €800 million in cash.
Market capitalisation = 200m × €25 = €5,000m
EVIC = €5,000m + €1,200m + €300m = €6,500m (cash of €800m is not deducted)
Standard EV, for contrast = €6,500m − €800m = €5,700m
An investor holding €65 million of this company’s equity therefore has an attribution factor of €65m ÷ €6,500m = 1%. Had the same investor used standard EV (€5,700m) by mistake, the attribution factor would rise to 1.14% — overstating the attributed emissions by roughly 14% on this single holding. The PCAF Listed Equity & Corporate Bonds Calculator applies the EVIC denominator automatically and returns the result with its data quality score.
Where EVIC Is Used
EVIC is the denominator for the listed equity and corporate bonds asset class — the most common holding for asset managers and the most data-rich. It feeds directly into the PCAF Listed Equity & Corporate Bonds Calculator; the full definition and data quality scorecard sit in the corresponding methodology. Other asset classes use different denominators — total equity plus debt for business loans, property value at origination for real estate, total value at origination for motor-vehicle loans, PPP-adjusted GDP for sovereign debt — so the listed-asset EVIC formula does not carry over to them.
Three Substitutions That Break It
- Market capitalisation alone. Ignores debt entirely, so two companies with identical equity but different leverage get the same denominator — wrong, and it understates the denominator for leveraged issuers.
- Standard enterprise value (cash subtracted). Produces volatile and occasionally negative denominators, inflating attributed emissions for cash-rich companies.
- Book value of equity. EVIC uses market capitalisation, not balance-sheet equity; book value diverges sharply from market value for most listed companies.
Frequently Asked Questions
EVIC (Enterprise Value Including Cash) is market capitalisation plus total debt plus minority interest, with cash not subtracted. The PCAF Standard uses it as the denominator of the attribution factor for listed equity and corporate bonds, so it determines how much of a company’s emissions an investor or lender carries.
Standard enterprise value subtracts cash and cash equivalents; EVIC does not deduct them. Every other component — market capitalisation, total debt, minority interest — is the same. Keeping cash in keeps the denominator positive and stable for cash-rich companies, which matters when the figure is used to attribute emissions rather than to price an acquisition.
Add market capitalisation (common and preferred shares at fiscal year-end), total debt, and minority interest — and do not subtract cash. For example, a company with €5,000m market cap, €1,200m debt, and €300m minority interest has an EVIC of €6,500m regardless of how much cash it holds. For private companies or project finance, EVIC is instead the total equity plus debt of the entity or project.
Use EVIC for the listed equity and corporate bonds asset class. Business loans and unlisted equity use total equity plus debt; commercial real estate and mortgages use property value at origination; motor vehicle loans use total value at origination; sovereign debt uses PPP-adjusted GDP. Each asset class in the financed-emissions methodology has its own denominator.
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