Effectively Demonstrating Sustainability Ambitions Key To Unlocking More Successful M&A Deals
According to a new M&A survey from KPMG, 53% of participants reported that ESG findings have resulted in deal cancellations and 42% in purchase price reductions.
The report also discovered that almost two thirds of investors would pay a premium for companies aligned with their ESG priorities.
The challenges faced by professionals include:
Lack of robust data (59%)
Difficulty in selecting a meaningful scope for ESG due diligence (56%)
Inadequate understanding of ESG due diligence across stakeholders (56%)
Difficulties in quantifying findings (45%)
“What this report really highlights is that despite huge public pressure and a plethora of tools that allow you to measure past ESG performance, there is still precious little support being provided to businesses on how they can understand, measure, manage, improve and transparently report their past actions AND their future intent around social and environmental impact,” explains Mike Penrose, Co-Founder of FuturePlus.
“The responses from this survey is one of the key reasons we created FuturePlus, to offer a platform that gives any sized business or organisation the tools to record and report on their ESG and Sustainability impact and ambition, with the latter being the key to solving this problem.
“Judging people only on what they have done disincentivizes relatively new companies and those who are just starting to tackle their most pressing sustainability challenges from doing so, and makes them a less attractive acquisition target.
“They become worried that they will be judged as bad, and not inspired to do more, and by doing nothing they become less attractive to investors, customers, and potential M&A deals.
“In addition, we believe these unnecessarily complex ‘badges of honour’ that claim to demonstrate that your company takes social and environmental impact seriously disincentivizes continuous learning and Improvement. In our experience many companies obtain a ‘stamp’ or certification claiming they are good, and then stop, believing they have arrived at their destination.
“What we set out to develop in FuturePlus is a system that allows people to develop a continuously evolving roadmap for improvement, be recognised for their ambition, not just past action, have the tools to report to investors, customers, markets and stakeholders, not only on what they have done, but also on how they intend to progress, and be supported by experts in achieving their goals.
“With the FuturePlus approach many of these M&A deals might have gone through, as the position of the acquiring party would no longer be:
‘no we can’t… Unless you can demonstrate what you have done’,
and would become:
‘Yes we can… if you can show us what you plan to do, how you plan to do it, and allow us to track your progress’.
“We strongly believe that effectively demonstrating an ambition to be more sustainable can be the key to unlocking more successful deals, and removes the blocks to their completion that are highlighted in the article above.
“Consumers, partners and investors will continue to demand more comprehensive sustainability reporting and FuturePlus allows you to demonstrate your sustainability strategy, impact, ambition and achievements.”
FuturePlus is a sustainability and ESG management and reporting platform that makes managing social and environmental impact accessible, affordable, achievable and trackable for every business, not just the 1%. FuturePlus qualifies a company’s sustainability achievements before quantifying and translating them into a realistic and trackable action plan. Its indicators, made up of 200-300 questions, educate companies and business leaders to take practical, incremental steps towards sustainability by focusing on five themes: Climate, Economic, Diversity & Inclusion, Social and Environment.
Its indicators align with all 17 of the UN’s Sustainable Development Goals. Based in London, U.K., FuturePlus has gained hockey stick growth. Its workforce is 66% female (compared to Deloitte’s global benchmark of 33% in tech companies).
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