Planning for SPAC: ESG in the driver seat

ESG considerations for companies that have completed or are contemplating a SPAC merger

The task of communicating with investors can be daunting for new public companies, but it also represents an enormous opportunity. If your company has recently completed a merger with a special purpose acquisition company (SPAC), or is moving in that direction, there is a seemingly endless stream of information you are communicating to the public markets for the first time – such as company risks, segments, earnings per share, and information regarding related parties. There are probably moments that feel frustratingly reactionary as you respond to new requirements and look for examples of how to meet those requirements.

We are already seeing carbon capture, carbon credit, electric vertical takeoff and landing vehicle (eVTOL), electric vehicle, or other environmental technology companies seeking capital via a SPAC or other investment vehicles. The weight of these communications can be significant for any company, but it is important not to lose sight of the identity and long-term success of your company in the noise of right now. While you are in a position of transition, it may be a perfect time to identify your values and goals. Once established, you can leverage this information to facilitate long-term benefits in a shifting public market.

Environmental, social, and governance (ESG) disclosures allow you to communicate certain strategic goals with investors, highlighting your values, your progress toward meeting those goals, and how it fits into your operational strategy. The ESG disclosures can further facilitate an analysis of your company’s operations, as you communicate how you plan to harness these factors to help drive performance and create value by taking advantage of related growth and strategic potential while building your company’s brand.

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