ESG in M&A: From Afterthought to Central Focus

May 14, 2021
By Jake Yanulis

First published via Corporate Board Member. 

Three letters have come to dominate the financial communications landscape: ESG. The discussion of environmental, social and governance (ESG) policies and imperatives pervades corporate life. It is reflective of the sweeping change across the corporate world, where investors no longer simply evaluate balance sheets and financial projections, but want to understand the more complex, nuanced factors that influence long-term value creation.

However, while ESG considerations have emerged as a clear priority across investor communications, from quarterly reporting and analyst days to the production of annual ESG reports, focus on this important topic has been conspicuously absent from deal announcements.

We believe that will change—and rapidly. Investors increasingly expect companies to live up to ESG commitments in every aspect of their business. When pursuing a transformative deal or adding assets to impact strategy, investors want to understand how the move creates value and how that value is preserved and/or enhanced long-term through ESG initiatives. The investment community now views ESG measurement as a core component of effective corporate strategy, and as such the topic deserves significant representation in deal communications to underscore the broader investment story behind the transaction.

The traditional transaction announcement features… Continue reading HERE