Solutions / Due Diligence & Research / ESG Due Diligence
ESG Due Diligence
ESG diligence becomes useful when it stops producing scores and starts producing numbers a deal team can put in a model.
Priced, not ratedFindings reported with cost, timing and severity, which is what a deal team can actually model.
Below the first tierSupply chain exposure assessed past direct suppliers, with coverage stated honestly.
Regimes that will applyCurrent and forthcoming disclosure obligations, with the cost of reaching compliance.
In simple terms
You tell us the asset. We assess environmental, labour, supply chain and governance exposure, and give you the cost and timing of each finding rather than a score.
What ESG Due Diligence is. ESG due diligence assesses environmental liability, labour and supply chain practice, governance quality and regulatory exposure at a target, and states the commercial and timing consequence of each finding.
What makes this different. A review that always supports the transaction is comfort, not diligence. Ours reports what it finds, including the findings that change the price or stop the deal.
What the service covers
These are the areas we work across, such as the ones below. We combine them in the proportion your question needs, and we tell you which ones your question does not need.
Environmental assessment
Site liability, permits, emissions exposure and remediation obligations, with cost and timing attached.
Social and supply chain
Labour practice, health and safety record and supply chain exposure, including tiers the target has no visibility into.
Governance review
Ownership, board effectiveness, related-party exposure and controls, assessed for real function rather than documented existence.
Regulatory exposure
Applicable and forthcoming disclosure and compliance regimes, with the cost of reaching compliance.
Questions this answers
If something like this is on your agenda, the engagement is already half scoped.
- What environmental liability are we inheriting, and what does remediation cost?
- What is the labour and supply chain practice below tier one?
- Which disclosure regimes will apply to this asset, and by when?
- Is there a governance issue that would stop our investment committee?
- What does it cost to bring this asset to our ESG standard?
How you can use this
A few of the situations where this service does real work.
Environmental liability
A site or process may carry obligations you would inherit.
Supply chain exposure
Practices below tier one are unknown and increasingly your problem.
An investment committee standard
Your own policy requires assessment before approval.
Costing the gap to standard
The asset does not meet your standard and you need the number.
What changes for your business
The practical difference between running on this and running on what you have now, such as the following.
You price the risk instead of discovering it
Issues found in your own diligence are negotiable. Issues found in the other side's are deductions.
You spend diligence budget in the right order
A fast screen surfaces deal-stoppers before you commit to full scope on an asset that will not clear.
Committee papers stand up
Findings are evidenced, severity-rated and structured the way an investment committee expects to receive them.
You get the uncomfortable findings too
A review that only supports the deal is comfort, not diligence. Ours reports what it finds.
Valuation rests on tested assumptions
The parts of the model carrying the valuation are identified and tested separately, rather than accepted as a set.
You can act on it after close
Findings come with commercial consequence and owner, so the first hundred days start from something concrete.
Who this is for
Roles that commission this work most often include those below. Each asks a different question and gets a different cut of the same evidence.
Investors and deal teams
Does the investment case hold under independent testing?
Findings with severity, evidence and commercial consequence, in a format an investment committee accepts.
Corporate development
Are we buying what we think we are buying?
Independent assessment of market position, customers and growth assumptions, including the uncomfortable parts.
Finance and CFO teams
Are these numbers defensible?
Reconstructed and normalised financials with the estimation method stated wherever disclosure runs out.
Risk and compliance leadership
What are we inheriting that we have not priced?
Regulatory, environmental and governance exposure with cost and timing attached.
Founders and vendors preparing to sell
What will a buyer find that we have not addressed?
The issues a buyer's adviser will raise, ranked by likely price impact and whether they can still be fixed.
Typical clients
How we work
The third step is the one that makes the output usable, and it is the one most work of this kind skips.
Understand the decision
We start from the decision the work supports: proceed, reprice, or walk. That decides what has to be proven and to what standard.
Gather and test independently
Market, customer and financial evidence gathered directly, then tested against what management has represented.
Read it for your position
What matters depends on your hold period, your thesis and your risk appetite. The same finding is fatal for one buyer and immaterial to another.
Report to committee standard
Findings with severity, evidence and commercial consequence, structured the way an investment committee expects to receive them.
What you receive
Diligence report structured to investment committee standard
Findings register with severityevidence and commercial consequence
Financial or commercial model with scenarios
Management presentation and a live question session
Access to Phi, our AI research platformincluded
Every engagement comes with access to Phi. Ask questions of your own findings in plain language, pull the evidence behind any number, and keep querying long after the work is delivered. Your team gets the working intelligence, not just the document.
Open PhiWays to start
Tell us the decision and the date it has to be made by. We will recommend the smallest engagement that gets you there.
Red-flag review
A fast screen surfacing the issues that would stop a deal, before you spend more.
Full diligence
Complete commercial, financial or operational review to committee standard.
Portfolio monitoring
Continuous watch on holdings, with alerts on material change.
Common questions
Is this a ratings exercise?
No. Ratings compress incomparable things into one number. We report findings with cost, timing and severity, which is what a deal team can actually use.
How deep into the supply chain can you go?
Tier one reliably, tier two in most cases, beyond that with sampling. We state coverage rather than implying full visibility.
Who owns the work?
You do. It is exclusive to you, it is not resold, and working files are handed over unlocked.
Will you sign an NDA?
Yes, before the first conversation if you prefer.
Tell us the decision you are facing
Send us the question, the context and your timeline. You get back a recommended first step, what evidence it needs, and what it costs. Not a capability deck.