PROFIT ESG IN M & A
embracing ESG in M & A could enable them to grow sustainably .
For a company to realise potential increased valuations in M & A , the key areas that Deloitte advise clients to focus on from an ESG perspective are :
Gain an understanding of what ESG means for the company ’ s strategic priorities ( this will be different for each company and each sector )
Develop and execute an ESG strategy ( ideally embedded in the corporate strategy )
Set appropriately ambitious and credible ESG targets and align incentives to these targets
Remain cognizant of the fast-evolving stakeholder expectations , particularly from customers , investors , employees and regulators
“ The structural adjustment and value creation that will occur in response to climate change will be the business of this decade ,” concludes Symons . “ As markets and private equity ( PE ) firms become more competitive to ESG performance , driving returns through ESG performance improvements will be a significant opportunity for the PE market .”
Making your company more attractive to investors and potential suitors all comes down to ESG , and it is important that executives see this as a value and growth driver , not just a regulatory hurdle , says Kleindienst .
“ We see great potential in the ESGfocused transformation of companies from a value perspective – already , certain PE investors are leading the change in this and strongly focusing on implementing ESG initiatives for this reason ,” he says . “ Incentives need to be provided based on ESG targets and not only on short-term profits to be able to realise this potential ."
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