Global private equity investor

What did the client need? 

Before signing, a global private equity investor required ESG due diligence on a prospective acquisition.

The acquisition was a European technology hardware business with outsourced manufacturing and exposure to sensitive end markets.

Therefore, the investor needed a due diligence assessment that would:

• establish if there were any material sustainability issues requiring attention before investment;
• test the target's ESG position against supporting evidence; and
• identify priorities for post-acquisition improvement.

The work also needed to:

• align with the investor's own sustainability framework and fund commitments;
• complement the legal due diligence; and
• translate the findings into practical actions for the first 100 days and subsequent ownership period.

How did BIP.Verco help? 

BIP.Verco delivered an evidence-led ESG due diligence assessment. It covered seven workstreams:

• Supply chain and human rights
  Key suppliers, supplier standards, audits and site visits, country and sector exposure, conflict minerals, and human rights due diligence. 

• End-use controls
  How customers and potentially sensitive end uses were screened, escalated, and monitored. 

• Climate and decarbonisation
  GHG data, climate claims, offsets, decarbonisation plans, indicative Scope 3 emissions, and readiness for a science-based target. 

• Physical climate risk
  Site-level exposure and what it meant in the context of how each site was used. 

• Governance and people
  Ownership, board oversight, resourcing, incentives, ESG ratings, certifications, reporting, and workforce data. 

• Environment, health and safety
  Policies, management systems, certifications, accident data, permits, and hazardous-material controls. 

• Investor and financing requirements
  Alignment with the investor’s sustainability commitments and ESG KPIs. Also, potential sustainability-linked loan KPIs and the data needed to support them. 

What was the result?

Rather than treating ESG due diligence as a checklist exercise, we distinguished between what management said, what documentation demonstrated, and what remained unevidenced.

Each topic was assessed for materiality, and findings were evidence-rated. Actions were assigned an owner and timing across signing, the first 100 days, and the first two years of ownership.

This gave the deal team:

• a structured set of matters for consideration before signing;
• various value creation opportunities; and
• a prioritised post-acquisition ESG roadmap.