Drivers for CSR
Sustainability considerations are becoming part of the M&A deals reveals consulting company, Deloitte, in a recent document, “How Green is the Deal?”.
Why? The answer is quite predictable.
“M&A is frequently used strategically to attain a competitive advantage in the marketplace. As government regulation and consumers embrace the principles of sustainability, the need for companies to develop enterprise sustainability capabilities becomes increasingly imperative. M&A can be used strategically to identify competitors with existing skills sets that can be incorporated into the existing organization.”
Deloitte advises the parties to the transaction to include social and environmental indicators in the deal valuation process and to evaluate the costs asssociated with environmental factors like energy and water consumption, carbon footprint, solid waste. Moreover, the location of the target company in an environmentally vulnerable area might have a significant impact on the economics of the deal. Other aspects to be taken into account are: potential changes on consumer preferences, legislative changes, significant variation on energy prices and other suppliers prices.
A very interesting aspect is the importance given by Deloitte to the management&personnel skills in the field of sustainability. Acquirers should consider carefully what changes will be needed at management level and in the communication policy of the target company in order to get support for sustainability initiatives at the level of the organization.
