1) ESG IMPACT ON M&A IS A TANGIBLE FACT
ESG levers already have a quantifiable impact on M&A across industry sectors and ignoring them in business valuations is likely to increase investment risks and negatively impact value creation.
2) DATA IS KEY
Investors will have to find the right market data and research which aligns with the commercial and financial rationale for the transaction as a support for deal valuations.
3) BALANCING IS CRUCIAL
In order to truly appreciate the E, S and G impacts on the financials, it is important to adopt a nuanced approach to scenario testing as each sub-topic within the ESG collective may impact the business plan in different ways.
4) ESG REQUIRES LONGER TERM FOCUS
In building ESG inclusive business plans and financial forecasts, it is important to look beyond a common 3-5 years horizon, as quite a few of the ESG impacts will be in the longer term.