ESG is increasingly becoming one of the top management objectives for global businesses, and seen as a key driver to M&A deal activity in future. Do you think that ESG metrics play a big role in determining the value of targets in the M&A scene of your jurisdiction/industry?
Yes, I think it will play a larger role and will see more visibility/scrutiny in the due diligence process going forward. The application can lead to better valuation of targets, more competitive pricing mechanisms, and reduction in reporting burdens/damages/lawsuits when the deal is completed.
From my experience, ESG is becoming a core request during M&As. In my divestment experience, we even went as fas as providing a seat for the ESG officer during the management presentations with investors. This gave a good sense of commitment to our company’s ESG policies, and allowed investors to ask questions directly.