What is ESG Due Diligence?
The key purpose of Environmental, Social & Governance (ESG) Due Diligence is to address companies’ potential controversial conduct or failure to adhere to legal regulations, while providing information on responsible ESG programmes. Environmental, social, and governance (ESG) issues now constitute a crucial part of the investment decision-making process and portfolio management.
PwC provides adaptive approach to each case of ESG Due Diligence depending on the risks identified in the target companies. We have already managed several ESG projects for clients in the area of financial services, automotive industry, and the energy sector.
How PwC can help
Review of current corporate ESG principles (sustainability reporting, ISO standards, LCA of buildings and certification, resource efficiency, employee rights, CSR/ESG programmes and membership, code of conduct, work safety audit, climate policy, adherence to legal regulations by employees and third parties, exclusion policy and other relevant codes and policies), and implementation across countries and involved operational activities (identification of sustainability level and archetype).
Benchmarking of corporate principles, processes, and ESG efficiency against entities of equal position (three at maximum) and “best practice“ within the given industry (if available). We will carry out an ESG risk analysis based on strategic, implementation, regulation, and market criteria. Due to the specific nature of the task, it may be necessary to perform benchmarking on the EU level rather than the national one.
Assessment of corporate ESG principles compliance with national legal regulations and international treaties (such as EHS/OHS, extraordinary events action plans, equal pay principles, ISPOP reporting, TCFD, non-financial reporting). We will also assess the compliance of the crucial issues with the forthcoming ESG EU regulations.
Assessment of potential ESG obligations and their financial impact on the risks identified.
Mitigating climate change impacts is likely to constitute the greatest challenge the humankind has ever had to face. This is already starting to show in the requirements on the basic operation of our businesses. Sooner or later, a well-set ESG strategy will play an absolutely vital role in the company’s future success.
Jan Brázda
Partner at PwC and Team Leader for Sustainability and ESG Services
Our services
- ESG Due Diligence on the buy-side
- ESG Vendor Assistance
- Review and reporting of private equity ESG portfolio
- PRI reporting support
- Sustainability assistance to portfolio companies
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