I was involved in a corporate transaction in which the environmental DD was part of the Technical DD. The DD was based on a Scope of Work that was developed by the Company’s Technical team , based on the international standards, and was executed with a third party international consultant to ensure that any environmental liabilities are being considered and addressed properly, either in the valuation or by having environmental Reps. & Warranties in the SPA.
In my past experience, I was working on a solar panel construction project – environmental DD was key, as we needed to analyze how much carbon footprint we can actually help to save and if this project would be cost effective
Always rely on external technical advisors to perform an Environmental DD. They will be able to ask all the right questions, and remain objective as they benchmark against industry or international practice.
Having the right team engaged early on is critical. Knowing the industry, regulatory requirements, and unique local needs can often have a major impact on valuation. Not doing this right early or trying to save pennies now likely results in spending dollars later when critical items are missed.
I believe environmental DD is relevant for certain industries e.g. oil & gas, mining, agriculture, etc. Environmental DD involving M&A of other industries like technology, professional services, etc. are often not necessary and relevant.