Post on 22-Jan-2020
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GIN © 2018 KPMG International Cooperative (“KPMG International”). KPMG International provides no client services and is a Swiss entity with
which the independent member firms of the KPMG network are affiliated. 4
Client stories
A private equity firm sought to acquire a marine equipment manufacturer inSouth America and needed to identify material environmental, social orgovernance (ESG) risks that might affect the deal. On behalf of the prospective buyer, KPMG in Brazil carried out due diligence that includedinspections of the group’s sites and facilities, interviews with seniormanagers, and a review of management systems, policies, proceduresand reports.
KPMG discovered that the acquisition target had failed to secure a numberof mandatory environmental licenses and permits, putting it at potentialrisk of financial penalties, factory closures and criminal prosecution of its executives. With the support of KPMG, the client successfully negotiated areduction in the deal price and addressed the risks in the transaction.
A Chinese foreign investor was negotiating a deal to acquire a Europe-based manufacturer of tableware. Sustainability experts at KPMG inGermany, working as part of an integrated KPMG financial, legal and ESGdue diligence team, uncovered many ESG risks including environmentalliabilities, poor working conditions, potential for labor disputes and unsoundBoard processes.
As a result the client reduced the offered deal price by US$10 million.Integrating the financial, legal and ESG due diligence processes increasedthe efficiency of the assessment and saved the client time and money.KPMG delivered its report within a tight time frame of only two weeks.
Missing environmental permits drive down the deal price02
Deal price reduced due to multiple ESG risks 01
The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to beaccurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.
© 2018 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated withKPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
The KPMG name and logo are registered trademarks or trademarks of KPMG International.
Designed by CREATE. | CRT100544A | October 2018
kpmg.com/sustainability
Local KPMG contacts
ArgentinaMartin Mendivelzuammendivelzua@kpmg.com.ar
AustraliaAdrian V. Kingavking@kpmg.com.au
AustriaPeter Ertlpertl@kpmg.at
AzerbaijanVugar Aliyevvaliyev@kpmg.az
BelgiumMike Boonenmboonen@kpmg.com
BrazilRicardo Zibasrzibas@kpmg.com.br
CanadaBill J. Murphybillmurphy@kpmg.ca
CyprusIacovos Ghalanosiacovos.ghalanos@kpmg.com.cy
ChileLuis Felipe Encinalencina@kpmg.com
ChinaMaria Chengmaria.cheng@kpmg.com
ColombiaFabian Echeverriafecheverria@kpmg.com
Czech RepublicMiroslava Prokesovamprokesova@kpmg.cz
Costa RicaFlorely Quesadafquesada@kpmg.com
IsraelOren Grupiogrupi@kpmg.com
ItalyPierMario Barzaghipbarzaghi@kpmg.it
JapanKazuhiko Saitokazuhiko.saito@jp.kpmg.com
Yoshitake Funakoshiyoshitake.funakoshi@jp.kpmg.com
DenmarkFrances Iris Lufranceslu@kpmg.com
FinlandTomas Otterströmtomas.otterstrom@kpmg.fi
FrancePhilippe Arnaudparnaud@kpmg.fr
GermanyChristian Hellchell@kpmg.com
GreeceGeorge Raounasgraounas@kpmg.gr
HungaryIstván Szabóistvan.szabo@kpmg.hu
IndiaSanthosh Jayaramsanthoshj@kpmg.com
IndonesiaIan Hong ihong@kpmg.com.sg
IrelandMichael Hayesmichael.hayes@kpmg.ie
KazakhstanSaken Zhumashevszhumashev@kpmg.kz
LuxembourgGilles Poncingilles.poncin@kpmg.lu
PeruRosario Calderonrccalderon@kpmg.com
PolandKrzysztof Radziwonkradziwon@kpmg.pl
PortugalMartim Santosmartimsantos@kpmg.com
MalaysiaKasturi Nathankasturi@kpmg.com.my
MexicoJesus Lunajjluna@kpmg.com.mx
RomaniaGheorghita Diaconugdiaconu@kpmg.com
NetherlandsArjan de DraaijerdeDraaijer.Arjan@kpmg.nl
New ZealandErica Milesemiles@kpmg.co.nz
NigeriaTomi Adepojutomi.adepoju@ng.kpmg.com
NorwayAnette Rønnovanette.ronnov@kpmg.no
Russia, Ukraine, Georgia and ArmeniaIgor Korotetskiyikorotetskiy@kpmg.ru
SlovakiaQuentin Crossleyqcrossley@kpmg.sk
South AfricaShireen Naidooshireen.naidoo@kpmg.co.za
SwitzerlandAnne Van Heerdenannevanheerden@kpmg.com
TaiwanNiven HuangRegional Leader, KPMGSustainability Services in Asia Pacificnivenhuang@kpmg.com.tw
South KoreaHyoung-Chan Kimhyoungchankim@kr.kpmg.com
SpainJosé Luis Blasco VazquezGlobal Head, KPMG Sustainability Services jblasco@kpmg.es
UAE and Oman (Lower Gulf)Hanife Ymerhymer1@kpmg.com
Thailand Paul Flipsepflipse@kpmg.co.th
TurkeySirin Soysalssoysal@kpmg.com
UKTroy Mortimertroy.mortimer@kpmg.co.uk
USKatherine Bluekblue@kpmg.com
UruguayMartin Clerinomartinclerino@kpmg.com
VenezuelaJose O. Rodriguesjrodrigues@kpmg.com
SwedenTomas Otterströmtomas.otterstrom@kpmg.se
Jung-Nam Kimjungnamkim@kr.kpmg.com
SingaporeIan Hong ihong@kpmg.com.sg
Integrating environmental, social and governance (ESG) due diligence into deals
How KPMG can help
kpmg.com/sustainability
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GIN © 2018 KPMG International Cooperative (“KPMG International”). KPMG International provides no client services and is a Swiss entity with
which the independent member firms of the KPMG network are affiliated. 3© 2018 KPMG International Cooperative (“KPMG International”). KPMG International provides no client services and is a Swiss entity withwhich the independent member firms of the KPMG network are affiliated. 2
How we can helpKPMG ESG due diligence professionals go much further than traditional environmental, health & safety assessments.KPMG specialists look at a wide range of potential liabilities, compliance issues and hidden risks that could reduce the deal price or opportunities that could increase it. Therefore KPMGfirms also search for value creation opportunities that might improve the divestment valuation of the business.
The KPMG ESG due diligence service includes:
As an integrated part of your KPMG Deal Advisory team, our ESG due diligence professionalsknow how to keep deals on track in time-sensitive situations. And, with experts across theKPMG global member firm network, we have local expertise ready to support multinationaldeals wherever the company’s operations are located.
Overview of how emerging social and environmentalmegatrends are likely to affect the company and its market
Comprehensive assessment of the business’s material ESGrisks, liabilities and opportunities
Benchmarking of the company’s ESG policies, procedures and performance against peers and sector best practice
Assessment of compliance with national regulations and international treaties
Insight into how the company’s ESG performance could affectits most valuable intangible assets including reputation, brand value, trust and relationships
Estimates of how potential liabilities could affect costs, cash flow and the deal timeline
Recommendations on adjustments to the valuation
The KPMG ESG due diligence approach covers a wide range of performance,risk and compliance issues.They include, but are not limited to:
A broad-based approach to ESG due diligence
Environmental
— Pollution of air, buildings, land and water
— Impacts on ecosystems and biodiversity (e.g.deforestation and the use of pesticides)
— Exposure to extreme weather
— Energy efficiency strategy andcarbon management
— Use of scarce resources
— Sourcing practices such as the use of responsiblysourced materials
— Management of waste and recycling
— Use of water, especially in waterscarce regions
— Readiness to respond to changing regulations onenvironmental performance
Governance
— Compliance with accounting standards
— Examples of anti-competitive behavior
— Audit Committee and Board structure
— Bribery, corruption and responsible tax record
— Executive remuneration
— Succession planning
— Lobbying record and political contributions
— Robustness of ESG risk management processes
— Presence of appropriate whistleblower and grievance mechanisms
Social
— Level of customer satisfaction
— Protection of customers’ data and compliancewith privacy laws
— Approach to human rights risks such as laborstandards, child labor and modern slavery
— Strength of relationships with workers and communities
— Worker safety
— Supply chain risks, such as standards of workingconditions in the supply chain
— Approach to diversity and equal opportunities
— Employee attraction and retention record
— Appropriate and lawful use of marketingcommunications
— Product safety
Strategic
— Readiness for transition to a low-carbon economy
— Resilience of the business model and strategy to social and environmental megatrends
— Strength of relationships with regulators andinvestors around ESG issues
Environmental Social Governance Strategic
Deal or no deal?: Why ESG due diligence matters KPMG professionals can help
In today’s business world, issues like child labor, carbon emissions, fair tax and corruption bring complex and costly risks as well the opportunity to gain competitive advantage by doing things differently.
In short, the way a company handles environmental, social and governance (ESG) issues can affect its long-term performance and its valuation.
That’s why, in today’s merger and acquisition (M&A) market, ESG due diligence can seal the deal or break it.
In a recent global survey of private equity general partners, over half (54 percent) had reduced a bid price after ESG due diligence and one third (32 percent) had increased one.1
So it’s no surprise that comprehensive ESG due diligence is now a core part of the deal process. A complete view of all relevant risks and opportunities is critical in order to negotiate the right price and the right terms for a deal.
KPMG member firms have a network of sustainability experts specialized in identifying ESG risks and opportunities as part of the deal process. Their due diligence regularly results in material adjustments to company valuations in an M&A context.
Our ESG experts work side-by-side with financial and legal experts in KPMG Deal Advisory to offer buy-side, joint venture and sell-side clients a truly integrated and efficient due diligence service at every stage of the transaction.
1Capital Dynamics (2017) Responsible Investment in Private Equity – a key component of operational value creation
Contact us t o find out how KPMG member firms can help you.
Tomas Otterström
Global Leader, KPMG Sustainable Finance Services, KPMG International.Partner, KPMG in Finland and KPMG in Sweden. tomas.otterstrom@kpmg.fi | tomas.otterstrom@kpmg.se
With over 20 years of work experience, Tomas has worked with dozens of institutional investors and asset management companies to understand and integrate ESG into their investment policies, and measure the impact of this for their business. He is well connected with key organizations in this space such as the UN Principles for Responsible Investment (PRI).
Martin Viehöver
Leader, KPMG ESG Due Diligence global network, KPMG International. Senior Manager, KPMG in Germany. mviehoever@kpmg.com Martin is an expert in identifying, assessing, managing and reporting on ESG issues for large companies and institutional investors. Over the past 10 years, he has provided ESG due diligence for mergers and acquisitions both on the buy-side and sell-side on behalf of clients in a wide range of industries.
© 2018 KPMG International Cooperative (“KPMG International”). KPMG International provides no client services and is a Swiss entity with which the independent member firms of the KPMG network are affiliated. 1
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GIN © 2018 KPMG International Cooperative (“KPMG International”). KPMG International provides no client services and is a Swiss entity with
which the independent member firms of the KPMG network are affiliated. 1 © 2018 KPMG International Cooperative (“KPMG International”). KPMG International provides no client services and is a Swiss entity withwhich the independent member firms of the KPMG network are affiliated. 3
Deal or no deal?: Why ESG due diligence mattersKPMG professionals can help
In today’s business world, issues like child labor, carbon emissions, fair tax and corruption bring complexand costly risks as well the opportunity to gain competitive advantage by doing things differently.
In short, the way a company handles environmental, social and governance (ESG) issues can affect itslong-term performance and its valuation.
That’s why, in today’s merger and acquisition (M&A) market, ESG due diligence can seal the deal orbreak it.
In a recent global survey of private equity general partners, over half (54 percent) had reduced a bid priceafter ESG due diligence and one third (32 percent) had increased one.1
So it’s no surprise that comprehensive ESG due diligence is now a core part of the deal process. Acomplete view of all relevant risks and opportunities is critical in order to negotiate the right price and theright terms for a deal.
KPMG member firms have a network of sustainability experts specialized in identifying ESG risks andopportunities as part of the deal process. Their due diligence regularly results in material adjustments tocompany valuations in an M&A context.
Our ESG experts work side-by-side with financial and legal experts in KPMG Deal Advisory to offer buy-side, joint venture and sell-side clients a truly integrated and efficient due diligence service at every stageof the transaction.
Tomas Otterström
Global Leader, KPMG Sustainable Finance Services, KPMG International.Partner, KPMG in Finland.tomas.otterstrom@kpmg.fi
With over 20 years of work experience, Tomas has worked with dozens of institutional investorsand asset management companies to understand and integrate ESG into their investment policies,and measure the impact of this for their business. He is well connected with key organizations in this space such as the UN Principles for Responsible Investment (PRI).
Martin Viehöver
Leader, KPMG ESG Due Diligence global network, KPMG International.Senior Manager, KPMG in Germany.mviehoever@kpmg.comMartin is an expert in identifying, assessing, managing and reporting on ESG issues for large companies and institutional investors. Over the past 10 years, he has provided ESG due diligence formergers and acquisitions both on the buy-side and sell-side on behalf of clients in a wide rangeof industries.
Contact us to find out how KPMG member firms can help you.
1Capital Dynamics (2017) Responsible Investment in Private Equity – a key component of operational value creation
The KPMG ESG due diligence approach covers a wide range of performance,risk and compliance issues.They include, but are not limited to:
A broad-based approach to ESG due diligence
Environmental
— Pollution of air, buildings, land and water
— Impacts on ecosystems and biodiversity (e.g.deforestation and the use of pesticides)
— Exposure to extreme weather
— Energy efficiency strategy andcarbon management
— Use of scarce resources
— Sourcing practices such as the use of responsiblysourced materials
— Management of waste and recycling
— Use of water, especially in waterscarce regions
— Readiness to respond to changing regulations onenvironmental performance
Governance
— Compliance with accounting standards
— Examples of anti-competitive behavior
— Audit Committee and Board structure
— Bribery, corruption and responsible tax record
— Executive remuneration
— Succession planning
— Lobbying record and political contributions
— Robustness of ESG risk management processes
— Presence of appropriate whistleblower and grievance mechanisms
Social
— Level of customer satisfaction
— Protection of customers’ data and compliancewith privacy laws
— Approach to human rights risks such as laborstandards, child labor and modern slavery
— Strength of relationships with workers and communities
— Worker safety
— Supply chain risks, such as standards of workingconditions in the supply chain
— Approach to diversity and equal opportunities
— Employee attraction and retention record
— Appropriate and lawful use of marketingcommunications
— Product safety
Strategic
— Readiness for transition to a low-carbon economy
— Resilience of the business model and strategy to social and environmental megatrends
— Strength of relationships with regulators andinvestors around ESG issues
Environmental Social Governance Strategic
How we can help KPMG ESG due diligence professionals go much further than traditional environmental, health & safety assessments. KPMG specialists look at a wide range of potential liabilities, compliance issues and hidden risks that could reduce the deal price or opportunities that could increase it. Therefore KPMG firms also search for value creation opportunities that might improve the divestment valuation of the business.
The KPMG ESG due diligence service includes:
Overview of how emerging social and environmental megatrends are likely to affect the company and its market
Comprehensive assessment of the business’s material ESG risks, liabilities and opportunities
Benchmarking of the company’s ESG policies, procedures and performance against peers and sector best practice
Assessment of compliance with national regulations and international treaties
Insight into how the company’s ESG performance could affect its most valuable intangible assets including reputation, brand value, trust and relationships
Estimates of how potential liabilities could affect costs, cash flow and the deal timeline
Recommendations on adjustments to the valuation
-
As an integrated part of your KPMG Deal Advisory team, our ESG due diligence professionals know how to keep deals on track in time-sensitive situations. And, with experts across the KPMG global member firm network, we have local expertise ready to support multinational deals wherever the company’s operations are located.
© 2018 KPMG International Cooperative (“KPMG International”). KPMG International provides no client services and is a Swiss entity with which the independent member firms of the KPMG network are affiliated. 2
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GIN © 2018 KPMG International Cooperative (“KPMG International”). KPMG International provides no client services and is a Swiss entity with
which the independent member firms of the KPMG network are affiliated. 1 © 2018 KPMG International Cooperative (“KPMG International”). KPMG International provides no client services and is a Swiss entity withwhich the independent member firms of the KPMG network are affiliated. 2
How we can helpDeal or no deal?: Why ESG due diligence mattersKPMG professionals can help
In today’s business world, issues like child labor, carbon emissions, fair tax and corruption bring complexand costly risks as well the opportunity to gain competitive advantage by doing things differently.
In short, the way a company handles environmental, social and governance (ESG) issues can affect itslong-term performance and its valuation.
That’s why, in today’s merger and acquisition (M&A) market, ESG due diligence can seal the deal orbreak it.
In a recent global survey of private equity general partners, over half (54 percent) had reduced a bid priceafter ESG due diligence and one third (32 percent) had increased one.1
So it’s no surprise that comprehensive ESG due diligence is now a core part of the deal process. Acomplete view of all relevant risks and opportunities is critical in order to negotiate the right price and theright terms for a deal.
KPMG member firms have a network of sustainability experts specialized in identifying ESG risks andopportunities as part of the deal process. Their due diligence regularly results in material adjustments tocompany valuations in an M&A context.
Our ESG experts work side-by-side with financial and legal experts in KPMG Deal Advisory to offer buy-side, joint venture and sell-side clients a truly integrated and efficient due diligence service at every stageof the transaction.
Tomas Otterström
Global Leader, KPMG Sustainable Finance Services, KPMG International.Partner, KPMG in Finland.tomas.otterstrom@kpmg.fi
With over 20 years of work experience, Tomas has worked with dozens of institutional investorsand asset management companies to understand and integrate ESG into their investment policies,and measure the impact of this for their business. He is well connected with key organizations in this space such as the UN Principles for Responsible Investment (PRI).
Martin Viehöver
Leader, KPMG ESG Due Diligence global network, KPMG International.Senior Manager, KPMG in Germany.mviehoever@kpmg.comMartin is an expert in identifying, assessing, managing and reporting on ESG issues for large companies and institutional investors. Over the past 10 years, he has provided ESG due diligence formergers and acquisitions both on the buy-side and sell-side on behalf of clients in a wide rangeof industries.
Contact us to find out how KPMG member firms can help you.
1Capital Dynamics (2017) Responsible Investment in Private Equity – a key component of operational value creation
KPMG ESG due diligence professionals go much further than traditional environmental, health & safety assessments.KPMG specialists look at a wide range of potential liabilities, compliance issues and hidden risks that could reduce the deal price or opportunities that could increase it. Therefore KPMGfirms also search for value creation opportunities that might improve the divestment valuation of the business.
The KPMG ESG due diligence service includes:
As an integrated part of your KPMG Deal Advisory team, our ESG due diligence professionalsknow how to keep deals on track in time-sensitive situations. And, with experts across theKPMG global member firm network, we have local expertise ready to support multinationaldeals wherever the company’s operations are located.
Overview of how emerging social and environmentalmegatrends are likely to affect the company and its market
Comprehensive assessment of the business’s material ESGrisks, liabilities and opportunities
Benchmarking of the company’s ESG policies, procedures and performance against peers and sector best practice
Assessment of compliance with national regulations and international treaties
Insight into how the company’s ESG performance could affectits most valuable intangible assets including reputation, brand value, trust and relationships
Estimates of how potential liabilities could affect costs, cash flow and the deal timeline
Recommendations on adjustments to the valuation
A broad-based ap proach to ESG due diligence The KPMG ESG due diligence approach covers a wide range of performance, risk and compliance issues. They include, but are not limited to:
Environmental Social Governance Strategic
Environmental
— Pollution of air, buildings, land and water
— Impacts on ecosystems and biodiversity (e.g. deforestation and the use of pesticides)
— Exposure to extreme weather
— Energy efficiency strategy and carbon management
— Use of scarce resources
— Sourcing practices such as the use of responsibly sourced materials
— Management of waste and recycling
— Use of water, especially in water scarce regions
— Readiness to respond to changing regulations on environmental performance
Governance
— Compliance with accounting standards
— Examples of anti-competitive behavior
— Audit Committee and Board structure
— Bribery, corruption and responsible tax record
— Executive remuneration
— Succession planning
— Lobbying record and political contributions
— Robustness of ESG risk management processes
— Presence of appropriate whistleblower and grievance mechanisms
Social
— Level of customer satisfaction
— Protection of customers’ data and compliance with privacy laws
— Approach to human rights risks such as labor standards, child labor and modern slavery
— Strength of relationships with workers and communities
— Worker safety
— Supply chain risks, such as standards of working conditions in the supply chain
— Approach to diversity and equal opportunities
— Employee attraction and retention record
— Appropriate and lawful use of marketing communications
— Product safety
Strategic
— Readiness for transition to a low-carbon economy
— Resilience of the business model and strategy to social and environmental megatrends
— Strength of relationships with regulators and investors around ESG issues
© 2018 KPMG International Cooperative (“KPMG International”). KPMG International provides no client services and is a Swiss entity with which the independent member firms of the KPMG network are affiliated. 3
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Integrating environmental, social and governance (ESG) due diligence into deals
The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to beaccurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.
© 2018 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated withKPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
The KPMG name and logo are registered trademarks or trademarks of KPMG International.
Designed by CREATE. | CRT100544A | October 2018
How KPMG can help
kpmg.com/sustainabilitykpmg.com/sustainability
Local KPMG contacts
ArgentinaMartin Mendivelzuammendivelzua@kpmg.com.ar
AustraliaAdrian V. Kingavking@kpmg.com.au
AustriaPeter Ertlpertl@kpmg.at
AzerbaijanVugar Aliyevvaliyev@kpmg.az
BelgiumMike Boonenmboonen@kpmg.com
BrazilRicardo Zibasrzibas@kpmg.com.br
CanadaBill J. Murphybillmurphy@kpmg.ca
CyprusIacovos Ghalanosiacovos.ghalanos@kpmg.com.cy
ChileLuis Felipe Encinalencina@kpmg.com
ChinaMaria Chengmaria.cheng@kpmg.com
ColombiaFabian Echeverriafecheverria@kpmg.com
Czech RepublicMiroslava Prokesovamprokesova@kpmg.cz
Costa RicaFlorely Quesadafquesada@kpmg.com
IsraelOren Grupiogrupi@kpmg.com
ItalyPierMario Barzaghipbarzaghi@kpmg.it
JapanKazuhiko Saitokazuhiko.saito@jp.kpmg.com
Yoshitake Funakoshiyoshitake.funakoshi@jp.kpmg.com
DenmarkFrances Iris Lufranceslu@kpmg.com
FinlandTomas Otterströmtomas.otterstrom@kpmg.fi
FrancePhilippe Arnaudparnaud@kpmg.fr
GermanyChristian Hellchell@kpmg.com
GreeceGeorge Raounasgraounas@kpmg.gr
HungaryIstván Szabóistvan.szabo@kpmg.hu
IndiaSanthosh Jayaramsanthoshj@kpmg.com
IndonesiaIan Hong ihong@kpmg.com.sg
IrelandMichael Hayesmichael.hayes@kpmg.ie
KazakhstanSaken Zhumashevszhumashev@kpmg.kz
LuxembourgGilles Poncingilles.poncin@kpmg.lu
PeruRosario Calderonrccalderon@kpmg.com
PolandKrzysztof Radziwonkradziwon@kpmg.pl
PortugalMartim Santosmartimsantos@kpmg.com
MalaysiaKasturi Nathankasturi@kpmg.com.my
MexicoJesus Lunajjluna@kpmg.com.mx
RomaniaGheorghita Diaconugdiaconu@kpmg.com
NetherlandsArjan de DraaijerdeDraaijer.Arjan@kpmg.nl
New ZealandErica Milesemiles@kpmg.co.nz
NigeriaTomi Adepojutomi.adepoju@ng.kpmg.com
NorwayAnette Rønnovanette.ronnov@kpmg.no
Russia, Ukraine, Georgia and ArmeniaIgor Korotetskiyikorotetskiy@kpmg.ru
SlovakiaQuentin Crossleyqcrossley@kpmg.sk
South AfricaShireen Naidooshireen.naidoo@kpmg.co.za
SwitzerlandAnne Van Heerdenannevanheerden@kpmg.com
TaiwanNiven HuangRegional Leader, KPMGSustainability Services in Asia Pacificnivenhuang@kpmg.com.tw
South KoreaHyoung-Chan Kimhyoungchankim@kr.kpmg.com
SpainJosé Luis Blasco VazquezGlobal Head, KPMG Sustainability Services jblasco@kpmg.es
UAE and Oman (Lower Gulf)Hanife Ymerhymer1@kpmg.com
Thailand Paul Flipsepflipse@kpmg.co.th
TurkeySirin Soysalssoysal@kpmg.com
UKTroy Mortimertroy.mortimer@kpmg.co.uk
USKatherine Bluekblue@kpmg.com
UruguayMartin Clerinomartinclerino@kpmg.com
VenezuelaJose O. Rodriguesjrodrigues@kpmg.com
SwedenTomas Otterströmtomas.otterstrom@kpmg.se
Jung-Nam Kimjungnamkim@kr.kpmg.com
SingaporeIan Hong ihong@kpmg.com.sg
Client stories
01 Deal price reduced due to multiple ESG risks
A Chinese foreign investor was negotiating a deal to acquire a Europe-based manufacturer of tableware. Sustainability experts at KPMG in Germany, working as part of an integrated KPMG financial, legal and ESG due diligence team, uncovered many ESG risks including environmental liabilities, poor working conditions, potential for labor disputes and unsound Board processes.
As a result the client reduced the offered deal price by US$10 million. Integrating the financial, legal and ESG due diligence processes increased the efficiency of the assessment and saved the client time and money. KPMG delivered its report within a tight time frame of only two weeks.
02 Missing environmental permits drive down the deal price
A private equity firm sought to acquire a marine equipment manufacturer in South America and needed to identify material environmental, social or governance (ESG) risks that might affect the deal. On behalf of the prospective buyer, KPMG in Brazil carried out due diligence that included inspections of the group’s sites and facilities, interviews with senior managers, and a review of management systems, policies, procedures and reports.
KPMG discovered that the acquisition target had failed to secure a number of mandatory environmental licenses and permits, putting it at potential risk of financial penalties, factory closures and criminal prosecution of its executives. With the support of KPMG, the client successfully negotiated a reduction in the deal price and addressed the risks in the transaction.
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Integrating environmental, social and governance (ESG) due diligence into deals
Client stories
A private equity firm sought to acquire a marine equipment manufacturer inSouth America and needed to identify material environmental, social orgovernance (ESG) risks that might affect the deal. On behalf of the prospective buyer, KPMG in Brazil carried out due diligence that includedinspections of the group’s sites and facilities, interviews with seniormanagers, and a review of management systems, policies, proceduresand reports.
KPMG discovered that the acquisition target had failed to secure a numberof mandatory environmental licenses and permits, putting it at potentialrisk of financial penalties, factory closures and criminal prosecution of its executives. With the support of KPMG, the client successfully negotiated areduction in the deal price and addressed the risks in the transaction.
A Chinese foreign investor was negotiating a deal to acquire a Europe-based manufacturer of tableware. Sustainability experts at KPMG inGermany, working as part of an integrated KPMG financial, legal and ESGdue diligence team, uncovered many ESG risks including environmentalliabilities, poor working conditions, potential for labor disputes and unsoundBoard processes.
As a result the client reduced the offered deal price by US$10 million.Integrating the financial, legal and ESG due diligence processes increasedthe efficiency of the assessment and saved the client time and money.KPMG delivered its report within a tight time frame of only two weeks.
Missing environmental permits drive down the deal price02
Deal price reduced due to multiple ESG risks 01
How KPMG can help
kpmg.com/sustainability
Local KPMG contacts
Argentina Martin Mendivelzua mmendivelzua@kpmg.com.ar
Australia Adrian V. King avking@kpmg.com.au
Austria Peter Ertl pertl@kpmg.at
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Belgium Mike Boonen mboonen@kpmg.com
Brazil Ricardo Zibas rzibas@kpmg.com.br
Canada Bill J. Murphy billmurphy@kpmg.ca
Cyprus Iacovos Ghalanos iacovos.ghalanos@kpmg.com.cy
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China Maria Cheng maria.cheng@kpmg.com
Colombia Fabian Echeverria fecheverria@kpmg.com
Czech Republic Miroslava Prokesova mprokesova@kpmg.cz
Costa Rica Florely Quesada fquesada@kpmg.com
Denmark Frances Iris Lu franceslu@kpmg.com
Finland Tomas Otterström tomas.otterstrom@kpmg.fi
France Philippe Arnaud parnaud@kpmg.fr
Germany Christian Hell chell@kpmg.com
Greece George Raounas graounas@kpmg.gr
Hungary István Szabó istvan.szabo@kpmg.hu
India Santhosh Jayaram santhoshj@kpmg.com
Indonesia Ian Hong ihong@kpmg.com.sg
Ireland Michael Hayes michael.hayes@kpmg.ie
Israel Oren Grupi ogrupi@kpmg.com
Italy PierMario Barzaghi pbarzaghi@kpmg.it
Japan Kazuhiko Saito kazuhiko.saito@jp.kpmg.com
Yoshitake Funakoshi yoshitake.funakoshi@jp.kpmg.com
Kazakhstan Saken Zhumashev szhumashev@kpmg.kz
Luxembourg Gilles Poncin gilles.poncin@kpmg.lu
Peru Rosario Calderon rccalderon@kpmg.com
Poland Krzysztof Radziwon kradziwon@kpmg.pl
Portugal Martim Santos martimsantos@kpmg.com
Malaysia Kasturi Nathan kasturi@kpmg.com.my
Mexico Jesus Luna jjluna@kpmg.com.mx
Romania Gheorghita Diaconu gdiaconu@kpmg.com
Netherlands Arjan de Draaijer deDraaijer.Arjan@kpmg.nl
New Zealand Erica Miles emiles@kpmg.co.nz
Nigeria Tomi Adepoju tomi.adepoju@ng.kpmg.com
Norway Anette Rønnov anette.ronnov@kpmg.no
Russia, Ukraine, Georgia and Armenia Igor Korotetskiy ikorotetskiy@kpmg.ru
Singapore Ian Hong ihong@kpmg.com.sg
Slovakia Quentin Crossley qcrossley@kpmg.sk
South Africa Shireen Naidoo shireen.naidoo@kpmg.co.za
South Korea Hyoung-Chan Kim hyoungchankim@kr.kpmg.com
Jung-Nam Kim jungnamkim@kr.kpmg.com
Spain José Luis Blasco Vazquez Global Head, KPMG Sustainability Services jblasco@kpmg.es
Sweden Tomas Otterström tomas.otterstrom@kpmg.se
Switzerland Anne Van Heerden annevanheerden@kpmg.com
Taiwan Niven Huang Regional Leader, KPMG Sustainability Services in Asia Pacific nivenhuang@kpmg.com.tw
Thailand Paul Flipse pflipse@kpmg.co.th
Turkey Sirin Soysal ssoysal@kpmg.com
UAE and Oman (Lower Gulf) Hanife Ymer hymer1@kpmg.com
UK Troy Mortimer troy.mortimer@kpmg.co.uk
US Katherine Blue kblue@kpmg.com
Uruguay Martin Clerino martinclerino@kpmg.com
Venezuela Jose O. Rodrigues jrodrigues@kpmg.com
kpmg.com/sustainability
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