Increasing ESG Focus In M&A Transactions

The focus on ESG considerations in M&A transactions has been steadily growing over the last several years. Corporate stakeholders, buyers, sellers, institutional investors, lenders and proxy advisory firms are according a higher priority to ESG matters, including in how they view M&A transactions. This has become particularly acute for larger public and multinational companies. Parties increasingly understand that a robust approach to ESG issues at all stages of a transaction is critical to success. They also understand that ESG factors can be employed as an important value creation lever.

The approach to ESG issues is becoming more sophisticated, with the following trends becoming apparent.