{"id":69,"date":"2023-03-06T16:38:16","date_gmt":"2023-03-06T16:38:16","guid":{"rendered":"https:\/\/gulfnp.com\/?p=69"},"modified":"2023-03-06T18:14:57","modified_gmt":"2023-03-06T18:14:57","slug":"esg-investing-mergers-acquisitions","status":"publish","type":"post","link":"https:\/\/gulfnp.com\/esg-investing-mergers-acquisitions","title":{"rendered":"Impact investing takes center stage as ESG gains momentum in M&A"},"content":{"rendered":"\n

Environmental, social, and governance (ESG) factors are becoming more prevalent in M&A deals<\/a> all around the world. ESG factors are important starting in the early phases of a deal’s evaluation and continue to be so during the due diligence process, the negotiation of the definitive agreement, and even after the transaction has closed.<\/p>\n\n\n\n

When contemplating mergers and acquisitions transactions, investors are increasingly considering ESG factors in their business decisions. These factors influence investors’ decisions to divest certain assets, while others may decide not to participate with a target firm with a poor ESG track record. <\/p>\n\n\n\n

According to a Forbes article published in January 2022, ESG standards are one of the key variables to be considered at the bargaining table in Latin American countries. ESG is especially important for cross-border deals involving Brazil, where the federal government’s Amazon policies have created worries about the environmental and social policies of many Brazilian corporations.<\/p>\n\n\n\n

Acquirers are starting to examine the degree of alignment with their ESG strategy in the US and Canada by assessing the ESG risks and opportunities in the target’s business against their ESG policy. Since prospective suitors are likely to consider the target’s ESG practices, it is becoming more typical, even for private companies, to be conscious of their ESG practices generally and to prepare ESG material at the early phases of a negotiation.<\/p>\n\n\n\n

ESG issues are frequently actively examined in significant cross-border M&a deals in the United Kingdom. Clients regard ESG-related risk concerns as more essential than in past years. As a result, companies with a positive ESG story, such as renewable energy companies, are better able to attract finance.<\/p>\n\n\n\n

ESG considerations might be important during the due diligence and LOI phases. While there are no standard ways to evaluate the relevance of ESG aspects (which frequently depend on the relevant industry and the character of the potential buyer), there are several considerations that acquirers should bear in mind. <\/p>\n\n\n\n

<\/span>Establishing benchmarks<\/span><\/h2>
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