“The data speaks loud and clear: Companies and investors are increasingly integrating ESG considerations into their M&A strategies, not only because it’s the right and responsible thing to do but also because of the value implications of ESG,” said KPMG U.S. ESG and Climate Services Leader Mark Golovcsenko last July 27, 2023
ESG due diligence is on the spotlight when analyzing risks and opportunities.
A recent survey by KPMG features insights from over 200 M&A practitioners in the U.S. and Europe, Middle East and Africa (EMA) on how ESG due diligence affects their M&A transactions.
Here some highliths of interest:
Most investors (74% of U.S. and 82% of EMA) are now including ESG in their M&A agenda including 72% of financial investors and 76% of corporate investors in the U.S. compared to 94% and 77% of EMA investors respectively
68% of EMA investors and 62% in the U.S. said they would pay a premium for a target that demonstrates a high level of ESG maturity that is in line with their ESG priorities
53% of U.S. and 66% of EMA investors said deal cancellation was the top consequence of a material finding
in 2022 KPMG had already antecipated ESG into the forefront of M&A. "Increasingly, investors are demanding progress on ESG, and many organizations are preparing for when they will need to disclose ESG data. Having elements of ESG in a company’s mission and performing well on ESG standards can enhance corporate reputation and brand. ESG can also improve access to talent, customers, and capital. This reality has thrust ESG into the forefront of M&A. Until recently, ESG diligence was mostly a checklist exercise performed by a law firm that would review a target’s policies and highlight material governance risks."
Click at the image below to read "Navigating complex M&A. How to win in the age of the complex deal"and here for another KPMG 2022 report “How to determine where ESG can create value".
And here to read more about this 2023 update and specifically from the EMEA perspective, including how to tackle three problems: scope, data and policies, quantification.
