ESG has become a leading topic in deal discussions and can impact deal value — but strong ESG credentials can help drive deal activity — and with an increased focus on sustainability, there’s a need to incorporate ESG into the DNA of the business and integrate it across the deal life cycle.
A business that performs well across all components of ESG can attract more interest, investment and higher multiples, while businesses that have weak ESG credentials can be undervalued. Many stakeholders and shareholders apply pressure to their money managers to account for, and report on their investment decisions from an ESG perspective — and demonstrating ESG compliance, commitment and transparency naturally brings enhanced deal value while creating value for people and the planet.
KPMG firms employ an ESG framework to our deal valuation which sets out minimum standards that companies are expected to follow and is an integral part of both the due diligence process and post-acquisition stewardship. We can help you integrate ESG into the deal process, helping to ensure the appropriate analysis is done to focus on what’s materially relevant.
With ESG factors being increasingly important for accessing new capital and debt, some deal evaluators now consider them equal to financial measures. Our professionals work closely across functions to regularly evaluate and enhance potential ESG financing options, identify possible lenders, and prepare companies for their sale, merger, or acquisition.
