ESG due diligence and deal advisory
Corporate entities and private equity are increasingly seeing opportunities to maximise value through the consideration of environmental, social and governance (ESG) trends and issues
We consider ESG within the entire deal process. Due diligence includes the incorporation of ESG factors. These ESG factors have a profound impact on business performance, value, and risk. A business’ social and environmental licence to operate is under constant scrutiny by investors, customers, and other stakeholders. These groups are willing to hold organisations to account and demand action to address these risks. It therefore makes sense that ESG due diligence is now a necessary part of the mergers & acquisition (M&A) process.
At Deloitte, we are part of a global network of member firms with a wide set of experience across multiple sectors. Our team have the necessary expertise to:
- Identify key ESG risks and opportunities relevant to the target business.
- Review the target’s ESG governance, policies, processes, and performance and compare these to industry peers to gain an insight into the ESG maturity of the target.
- Provide insights into how these ESG risks and opportunities, combined with the target’s maturity, might impact on areas of the valuation.
- Provide the buyer with an overview of steps the target could take going forward to address these prioritised issues.
We also provide support post-transaction. This is where the company has opportunity to harness synergies, set and implement a new or revised ESG strategy, and to capitalise on ESG opportunities. Critical to this is ensuring the right systems are in place to track and measure the full breadth of impacts (financial and non-financial) associated with these activities in a factual manner, which can avoid the risk of “greenwashing,” and can assist with maximising the value of the investment.