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US Sustainability Due Diligence Study

The sustainable advantage: Leveraging Sustainability Due Diligence to Unlock Value

How we expect M&A to change

The impacts of Sustainability-related factors continue to grow, and companies vary significantly in their level of preparedness to address them. Consequentially, it is more critical than ever for investors to scrutinize the data in mergers and acquisitions (M&A) targets. More and more investors are realizing this and increasing their adoption of Sustainability due diligences. ​

A survey by KPMG has found that sustainability due diligence is on the rise and is becoming fundamental in investment decision-making, enabling visibility into adverse effects of sustainability factors and ensuring better preparedness for resilient and sustainable growth. Investors are increasingly convinced that sustainability due diligence can successfully identify valuable opportunities and critical risks.​

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The Sustainable Advantage: Leveraging Sustainability Due Diligence to Unlock Value

In the companion paper to this study, we discuss the role of Sustainability M&A due diligence and provide practical steps for an effective approach to create long-term value.

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Key Insights


of US investors plan to conduct sustainability due diligences in the majority of their future deals, up from 33% in the past two years. ​


of investors are willing to pay a premium for companies that align with their sustainability priorities​.


of investors have had deals canceled and 42% of investors have opted for a purchase price reduction due to material findings on an sustainability due diligence​.


of US investors are conducting sustainability due diligences without an adequate understanding of sustainability in their area of investment.​


of Europe, Middle East, and Africa (EMA) investors integrate sustainability in their M&A agenda, compared to only 74% of US investors.​


of US investors with a top-notch sustainability due diligence approach leverage their sustainability due diligence findings to drive a clear post-close action plan.

Top reasons investors are conducting sustainability M&A due diligence include risk identification, increased investor focus, and regulatory requirements.

Top challenges in sustainability M&A due diligence lack of robust data, inadequate understanding of sustainability, and difficulty in scope selection.

"The data speaks loud and clear: Companies and investors are increasingly integrating sustainability 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 sustainability."

Mark Golovcsenko

KPMG Principal, Advisory Sustainability

Future Momentum

43% of investors will perform sustainability due diligences on the majority of their deals in the future ​

How frequently did you/do you expect to conduct sustainability due diligences on your deals?

Value creation

Companies that integrate strong sustainability performance into their overall business strategy are often better positioned to manage various regulatory, environmental, and reputational risks while responding to and managing emerging industry trends and challenges. 62% of investors are willing to pay a premium for sustainability-mature targets. Sustainability-aligned companies are often better at managing risks and attracting customers, investors, and employees.

As a buyer, how much more would you be willing to pay for a target that demonstrates a high level of sustainability maturity and is in line with your sustainability priorites?

Material findings kill deals

Sustainability M&A due diligence findings can lead to deal cancellation, purchase price reduction, and highlight potential risks impacting a company’s reputation, compliance, performance, and returns. Material sustainability findings can uncover operational risks that could lead to legal and reputational consequences.

What were the consequences of material findings from sustainability due diligence performance on the deal?

Top challenges

Common Sustainability M&A due diligence challenges include lack of robust data, inadequate understanding of what “Sustainability means” across stakeholders, and scope selection. Adopting sustainability frameworks and effective data management can enhance the consistency and quality of due diligence processes.

What are the key challenges you have encountered in conducting sustainability due diligences?

Other regions are ahead of the U.S.

At this time, Sustainability stakeholder and regulatory pressures are greater in other regions compared to the U.S.—accelerating Sustainability M&A due diligence maturity in other parts of the world. U.S. investors will likely have to mirror global standards. Learn more from around the world: Europe, Middle East, & Africa (EMA) Sustainability Due Diligence Study

"As the world continues to evolve, so do the expectations of businesses. Our latest Sustainability Due Diligence Survey reveals an undeniable truth: Sustainable practices are no longer just a choice but a prerequisite for resilience and growth."

Clare Lunn

KPMG Principal, Advisory Sustainability

Steps you can take to establish a standout Sustainability M&A due diligence program:

1. Identify your motivation for the program

2. Develop a clear sustainability strategy

3. Secure appropriate resources and assign responsibilities

4. Collaborate with external experts

5. Link Sustainability M&A due diligence to sustainability strategy

6. Develop your Sustainability M&A due diligence framework

7. Perform Sustainability M&A due diligence procedures

8. Link Sustainability M&A due diligence findings to post-closing actions

9. Monitor and report findings to stakeholders

10. Continuously improve the due diligence process

Steps you can take to establish a standout ESG M&A due diligence program:


Identify your motivation for the program


Develop a clear ESG strategy


Secure appropriate resources and assign responsibilities


Collaborate with external experts


Link ESG M&A due diligence to ESG strategy


Develop your ESG M&A due diligence framework


Perform ESG M&A due diligence procedures


Link ESG M&A due diligence findings to post-closing actions


Monitor and report findings to stakeholders


Continuously improve the due diligence process

KPMG Sustainability solutions

KPMG offers a proven standardized approach to Sustainability M&A due diligence that is tailored to individual clients. Our process can help you assess the risks, liabilities, and opportunities in your M&A investments. Let us help you find the right sustainability solutions.

In the news

KPMG’s 2023 US Sustainability Due Diligence Study findings have been picked up across major industry and sustainability news outlets. Learn more about what others think of the insights in the articles linked below:

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