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.

We also encourage you to explore our interactive dashboard for a further breakdown of the survey results and to re-watch our launch webinar to hear about real-life cases, and tips on ESG Due Diligence (or download the event slides (PDF 2.46 MB)).

Watch the webinar

Your local ESG DD solution leaders

Connect with Julie

Julie Vasadi

Head of ESG Due Diligence, Transaction Services
KPMG Australia

Connect with Katharina

Katharina Schönauer

Senior Manager, Advisory
KPMG in Austria

Connect with Stijn

Stijn Potargent

Partner, Deals | Advisory
KPMG in Belgium

Connect with Florian

Alexey Abramov

Partner, Head of KPMG Law,
KPMG in the Caspian

Connect with Effie

Effie Dai

Partner, Deal advisory
KPMG China

Connect with Tomas

Tomas Otterström

Global Leader, Sustainable Finance Services
KPMG in Finland

Connect with Nicolas

Nicolas Cottis

Director, Responsible Investment, Transaction Services
KPMG in France

Connect with Frank

Frank Hengelbrock

Partner, Advisory, Head of ESG Due Diligence in Deals
KPMG in Germany

Connect with Ákos

Ákos Pájer

KPMG in Hungary

Connect with David

David East

Head of Transaction Services, Deal Advisory
KPMG in Indonesia

Connect with Shivananda

Shivananda Shetty

Partner, Practice Lead- ESG
KPMG in India

Connect with Shane

Shane O'Reilly

Director, KPMG Sustainable Futures
KPMG in Ireland

Connect with Kyohei

Kyohei Yoshino

Partner, Deal advisory
KPMG in Japan

Connect with Sheen

Sheen, Sue-Ryearn Jessica

Director, Deal advisory, KPMG Korea
KPMG in Korea

Connect with Elaine

Elaine Cheah

Partner–Head of Deal Advisory & Transaction Services
KPMG in Malaysia

Connect with Jeiran

Jeiran Ebrahimi

Director Transaction Services
KPMG in the Netherlands

Connect with Marc

Marc Leubner

Associate Partner
KPMG in Slovakia

Connect with Ramón

Ramón Pueyo

Director, Governance, Risk and Compliance
KPMG in Spain

Connect with Tomas

Tomas Grendal

Head of Deal Strategy
KPMG in Sweden

Connect with Florian

Florian Bornhauser

Director, Global Strategy Group, Deal Advisory
KPMG in Switzerland

Connect with Vincent

Vincent Chang

Deputy Head of Advisory, Head of Private Equity
KPMG in Taiwan

Connect with Songon

Songon Kiatlertpongsa

Partner, Deal Advisory
KPMG in Thailand

Connect with Krzysztof

Krzysztof Pietrzyk

Director, Deal Advisory
KPMG in Poland

Connect with James

James Holley

Partner, ESG Transaction Services
KPMG in the UK

Connect with James

Kirk Caron

Manager, Sustainability Advisory
KPMG in the US