Adding value to acquisitions through ESG assessments

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Investing responsibly, or considering environmental, social and corporate governance (ESG) criteria in investment valuations and assessment, can generate long-term competitive financial returns and positive societal impact.

Asset owners, among other stakeholders, are increasingly concerned with the way asset managers, such as private equity firms, assess ESG risks to inform buy-outs/acquisitions decisions, and subsequently manage those risks to protect value and unleash value generating opportunities during the holding period. ESG risks include those related to climate change impacts mitigation and adaptation, environmental management practices and duty of care, working and safety condition, respect for human rights, anti-bribery and corruption practices, and compliance to relevant laws and regulations. Responsible investment should also consider the impacts of megatrends (e.g. climate change), and emerging regulations or voluntary guidelines, such as the UK Modern Slavery Act, as well as the requirements of wider stakeholders for transparency.

How can we add value to your business decisions?

DNV has extensive experience with assessing and managing ESG risks, and can help you structure and improve your own Due Diligence processes, or conduct a due diligence to uncover social, ethical, environmental and safety risks associated with a specific acquisition, or investment. Understanding the risks can help assess the costs and attribute value related to the investment.

We can support you by enhancing your ESG capabilities

Conducting ESG due diligence before an acquisition 

• Identify, assess and evaluate ESG risks associated with the investment, or specific asset
• Harvest big data to provide insights on physical, acute risks from climate change
• Provide expert advice and support in all phases: first review, interviews with management, review of documentation in data room, and verification
• Provide overview of ESG best practice, and emerging megatrends and regulations for relevant countries, sectors and products
• Deliver a ESG Due Diligence report, specifically set up to inform the investment decision, negotiations and integration after the acquisition

At acquisition: 

• Review and develop your internal processes for ESG Due Diligence
• Produce guidance documents and checklists covering all relevant aspects
• Support your planning for due diligence activities
• Conduct holistic or topic-based training and build in-house capacity
  
  

During holding period and in preparation for exit:

• Provide guidance and expert advice on internal and external reporting in line with emerging regulations, voluntary guidelines, and stakeholder expectations. 
• Review of your responsible investment policies and practices
• Work with you to identify and manage supply chain and operational ESG risks and opportunities 

Why DNV?

You get tangible outcomes. These include:

• Provide an overview of the risks and hidden factors before negotiations and investments
• Summarise deficiencies in compliance with laws and regulations and customer demands 
• Help you better plan the integration after the acquisition
• Prioritize expected cost related to improvement areas
• Are founded on a structured and robust methodology for documenting ESG Due Diligence and risk assessment
• Rely on necessary local expertise to ensure rapid and correct information

DNV has local and international experts with extensive experience in Due Diligence related to ESG issues.
These include:

• Consultants with extensive experience in assessing risks related to safety, environment, anti-corruption and human rights
• Procedures and methods based on international standards, and 150 years of risk-management expertise
• Global coverage, local expertise
• Good business sense, practical approach