The objective of the report is to support chief financial officers (CFOs) and their teams in identifying appropriate sustainability-related considerations during investment and divestment workflows.
As in all aspects of corporate life, sustainability concerns are having a significant impact on investment and divestment processes – ‘the transactional workflow’.
Accountancy and finance professionals are at the heart of these transactional processes, bringing expertise and experience to quantifying risks, assessing outcomes and identifying deal-breakers.
They need to develop appropriate skills as well as apply an ethical lens during the diligence phase, ensuring they understand sectoral issues and overall complexity.
The report examines why sustainability-related issues matter in the transaction workflow, examining the business context and the different dimensions of sustainability. It looks at the perspective of the acquirer and the seller, and offers conclusions and top tips, including the following six key observations for sustainability in due diligence:
- Strategic and risk-based scope
- Integrated approach
- Operational rigour
- Agility and flexibility
- Relevant expertise
- Actionable observations.
Top tips when considering sustainability-related issues in the transaction process are presented from the overall perspective of the acquirer and the acquirees, and are all explored in more depth in the report.
The report draws on the insights of nearly 50 accountancy and finance professionals from across the globe, many of them ACCA or CA ANZ members. And the perspective and comments of those who took part in the roundtable are embedded across the report.
As Sustainability in transactions makes clear:
Sustainability-related opportunities and risks cannot be ignored in a transaction; they now form a fundamental part of the strategic intent of the transaction and the valuation of an entity.
The assessment of these risks and opportunities must be comprehensively considered as part of the due diligence process, both as a specific workflow and as an integral part of other forms of due diligence.
Organisations need to ensure that they have an appropriate level of expertise across the transaction workflow and the target’s operations, assets and liabilities.
