Sustainability in transactions
We consider sustainability to be an integral part of our transaction services, both from a seller and buyer standpoint. Sustainability is an increasingly important aspect of the legal due diligence and review phases of transactions. Including sustainability issues in due diligence empowers buyer and seller alike with a better understanding of what risks and opportunities are connected with the business prospect in question. It makes for better evaluation of inherent value and helps to prevent and mitigate potential damage that may arise from related risks. A buyer that includes sustainability aspects in its transactional work will enter into negotiations with a more comprehensive risk analysis as a basis, and will be able to make sounder investment decisions. A buyer will also have valuable insight for ongoing sustainability efforts after completion of the transaction. Ultimately, the aim is to amplify the knowledge and understanding of the target company and the risks and opportunities associated with the transaction.
We assist companies that are active in a wide range of industry sectors and markets to manage sustainability issues in a transaction context. Our sustainability due diligence aims to assess whether there is a risk that the operations in question are in breach of relevant sustainability frameworks and guidelines. Our assessment typically involves the following steps: (i) identification of sustainability risks linked to the target's operations; (ii) assessment of existing risk management mechanisms, primarily through a review of the internal governance and risk management tools (e.g. codes of conduct, policy documents, internal procedures and instructions). We also review transactional structures in the event that the structure as such may constitute risk.
The material scope of a review is tailored to the specific transactional context and the value it adds for our client. It may include issues relating to human rights, labour, environment, anti-corruption, privacy and personal data, sanctions and export control, product compliance, and competition law.
Sound management of sustainability matters requires that the results of the review are considered in the transaction as well as the agreements governing the transaction, and that the purchaser continues the integration efforts after closing. We provide advice throughout these steps.