Environmental due diligence (EDD) in mergers and acquisitions has moved from an optional add-on to a deal-critical requirement. Contaminated land, pending environmental violations, decommissioning liabilities, and climate risk can all destroy value that financial due diligence alone would miss.
A comprehensive EDD covers: regulatory compliance status, environmental permits and conditions, contamination history and remediation liabilities, waste management obligations, carbon exposure (current emissions and forward-looking carbon costs), and climate-related physical risks to assets.
In India and the Gulf, EDD is particularly important because environmental enforcement is inconsistent and historical contamination records may be incomplete. A Phase I site assessment (desk study and site inspection) should be the minimum for any transaction involving industrial or real estate assets.
RSustain’s EDD practice serves both buyers and sellers. For buyers, we identify material environmental risks and quantify potential liabilities. For sellers, we conduct pre-sale assessments and remediation to maximise transaction value.
As carbon pricing expands (CCTS, CBAM, EU ETS), climate exposure is becoming a routine EDD component. The carbon cost of an acquisition target’s operations is now a line item in deal valuation, not an externality to be ignored.