In today’s business landscape, ESG (Environmental, Social, and Governance) factors are becoming critical to the success of businesses across sectors. Customers, employees, shareholders, investors, rating agencies, and regulators are increasingly focused on how companies conduct their business, its impact on the world, and their contribution to society.
What is ESG Due Diligence?
Traditional due diligence focuses on deal-specific risks and opportunities, historical and projected earnings, the quality of assets, commitments, and contingencies. In addition, ESG Due Diligence (DD) offers a comprehensive assessment of material ESG risks, liabilities, and opportunities for a target, which may be a portfolio company or transactional target. It helps identify and mitigate potential risks around reputation, regulatory challenges, and financial impacts.
