ESG DUE DILIGENCE
On average, sustainable companies are more profitable than other companies, and their operations involve fewer risks. In corporate transactions, sustainability can be viewed from the perspective of risk management: A sustainable company is usually a well-managed company that considers the effects of the business on various stakeholders, society, and the environment.
From a business transactions point of view, sustainability means that the target company is in as good a condition as possible and ready for future challenges. Because of this, ESG Due Diligence, which looks at environmental responsibility, social responsibility, and good governance, is increasingly being done as part of the due diligence process before a business acquisition. ESG Due Diligence is tailored according to the target company’s business, industry, and size. We also take into account the buyer’s wishes and needs, so that ESG Due Diligence supports the buyer’s risk assessment and possible needs to include the sustainability goals of the target company in the buyer’s own goals as efficiently as possible.
In ESG Due Diligence, we review the target company’s sustainability plans and processes, responsible persons, and possible external responsibility reporting. However, a core part of ESG Due Diligence is based on information gathered through interviews about the company’s actual understanding of sustainability issues, sustainability-related risks, and opportunities to develop business.
To guarantee the best result, we recommend doing ESG Due Diligence together with legal, tax and financial Due Diligence reports.