Why is ESG a Deal Breaker for Majority of M&As?

ESG considerations are being given increased importance in deals, as a survey found that over half of Mergers and Acquisitions Specialists (M&A) cancelled deals due to findings from ESG reports. 

Nearly two-thirds of investors also said they would “pay a premium” for companies aligned with their ESG priorities, according to the KPMG study. 

For the study, KPMG surveyed 200 U.S. ESG practitioners including corporate investors, financial investors, and M&A debt providers. 

M&A specialists are already integrating ESG into their considerations, with the identification of ESG risks and opportunities given as the top reason for conducting ESG due diligence. Almost 20 percent of respondents said ESG was a requirement by investors. 

“The data speaks loud and clear: Companies and investors are increasingly integrating ESG considerations into their M&A strategies, not only because it’s the right and responsible thing to do but also because of the value implications of ESG,” KPMG U.S. ESG and Climate Services Leader Mark Golovcsenko, said. 

The survey examined the potential impacts of findings in the ESG due diligence process, with more than half of respondents indicating that red flags on ESG could be a deal stopper (51%). 

ESG as a condition for growth 

The latest ESG findings reveals an undeniable truth. Sustainable practices are no longer just a choice but a prerequisite for businesses’ resilience and growth. 

Businesses that recognise that the sustainability of their operations have an impact on their revenue are growing faster than others. 

At ClearVUE.Business, we have worked with several businesses to create strategies that are sustainable and impact growth. We do this through our industry-leading technology that measures your emissions in real-time, providing reports for you to present your environmental progress. 

Get in touch today to find out more. 

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