The megatrend of sustainability has reached the M&A world. Across sectors and around the world, more and more deals are starting to be influenced by sustainability criteria. Targets with strong sustainability stories (and the data to back it up) are enjoying price premiums. And M&A teams are increasingly conducting Environmental, Social and Governance (ESG) due diligence (DD) on targets at an early stage.
To find out what this means for dealmakers across Europe, the Middle East and Africa, we surveyed more than 150 active dealmakers across the region. We asked them what works, what doesn’t work and what challenges they face going forward. We discussed various models for embedding ESG into DD. And we asked them to share their advice and insights based on their experience.
What we found was little consensus around what ESG DD actually means. Dealmakers are divided about how best to incorporate ESG DD into their existing due diligence frameworks. ESG DD work is often underfunded. And ESG DD is not always aligned to the organization’s overall ESG strategy.
Yet the data also suggests that dealmakers have made this area a key priority. And they are determined to see how ESG DD can not only help identify and manage potential risks, but also identify significant financial upside driven by ESG transformation. The importance of getting ESG DD right has never been clearer.
In this report, we explore the findings of our survey and our one-on-one interviews with dealmakers. Leveraging insights gained from the KPMG firms’ deep experience in ESG and due diligence, we offer some tips and advice of KPMG firm professionals to help dealmakers evolve and mature their ESG DD capabilities. And we share some practical examples from KPMG firms’ work in the area.
We hope this report provides EMA dealmakers and strategy leaders with new ideas and motivation to drive forward their ESG DD capabilities. To learn more about how KPMG can help in your organization’s to incorporate ESG in your deals, we encourage you to contact any of the authors listed at the bottom of this page.
Register here for our upcoming EMA launch webinar on the 29th November 2022 where we discuss our findings and first-hand experiences of ESG DD.
Your local ESG DD solution leaders
Senior Manager, Advisory
Partner, Deals | Advisory
KPMG in Belgium
Niclas Buch Mahler
Associate Director, Deal Advisory
KPMG in Denmark
Global Leader, Sustainable Finance Services
Director, Responsible Investment, Transaction Services
KPMG in France
Partner, Advisory, Head of ESG Due Diligence in Deals
Partner, Practice Lead- ESG
KPMG in India
Director, KPMG Sustainable Futures
KPMG in Ireland
KPMG in Italy
Director Transaction Services
KPMG in Netherlands
Anne Julie Jøssang
Senior Manager, Head of ESG Reporting and Performance Management
KPMG in Norway
Partner, Head of Sustainability and Corporate Governance
KPMG in Spain
Head of Deal Strategy
Senior Manager, Global Strategy Group, Deal Advisory
Partner, ESG Transaction Services
KPMG in the UK