ESG Due Diligence
In the context of transactions, ESG aspects constitute financial and reputational risks. Investors seek more transparency before signing a deal to avoid potential pitfalls linked to ESG concerns. This growing awareness for ESG amongst investors gives rise to ESG due diligence, which is evolving from a niche to a widely known term and requires competence in the M&A business.
Deloitte helps you with your ESG due diligence process by analyzing the compliance of the targets with national and international regulations as binding frameworks as well as non-codified stakeholder ESG-related norms and expectations. Further, ESG due diligence highlights the environmental, social, and governance status-quo of a company.
With regards to the environmental dimension, a due diligence includes the existence of internal policies, responsibilities and management with regards to several environmental aspects (esp. energy, CO2 emissions, materials, water usage and waste) summarizing the ecological impact of the business model as well as how it interacts with all key environmental stakeholders and works to mitigate its impacts.
The social dimension covers policies and responsibilities concerning social aspects, such as human rights, labor standards, health & safety, diversity and equal opportunities among others.
Finally, the governance dimension constitutes of analyzing the risk management systems, the existence of corporate codes of conduct (anti-bribery, anti-corruption, etc.) and the transparency of board and management decisions and remuneration.