Beyond Accounting – Sustainability in Transactions

Beyond Accounting – Sustainability in Transactions.

Addressing the issues of sustainability, including environmental, social and economic impacts of the transition to a net-zero economy, represents a key challenge for most organisations. Despite this, business activity continues, with the investment and divestment cycle remaining another fundamental part of organisations’ activities. Corporate acquisition and disposal transactions, including those that are private equity (PE) funded, are a fundamental part of many economies. The interrelationship between these two areas of focus, mergers and acquisitions / divestment and sustainability-related issues, is the subject of this report. Using the insights of nearly 50 accountancy and finance professionals from across the world, many of whom are members of ACCA or CA ANZ, this report provides a context for this interrelationship between sustainability and these major corporate transactions. The report is not a detailed explanation of the transaction process; rather, it is intended to support chief financial officers (CFOs) and their teams in identifying appropriate sustainability-related considerations during the investment and divestment workflows.

Three key messages from this report

  • 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 in relation to the target’s operations, assets and liabilities.

Download the report here.