Environmental, Social, And Governance Due Diligence And Risk Monitoring Services
Shareholders are increasingly calling for more transparency on environmental, social, and governance (ESG) risks, but effectively identifying and mitigating these myriad and complex risks is a new frontier for companies. Understanding ESG risk can help businesses leverage opportunities, foster agility, and avoid reputational and regulatory headaches.
With the continual expansion of scopes and requirements for ESG disclosures, regulations are increasing on a global scale. Stakeholders are advocating for change and governments are discussing new policies to implement this change. Our due diligence process includes these measures discussed in the EU and SEC proposals regarding more transparency in the supply chain, including the Corporate Sustainability Due Diligence Directive and disclosure regulations. We turn to third-party vetting and reliable networks and resources to get an accurate analysis of an organization’s values surrounding climate change, human rights, equality, and diversity.
Engagement with a company that has differing ESG values can impact your reputation and customer relationships. Our services provide a complete 360-degree view of target companies to confidently assess risk both legally and reputationally. We evaluate your ESG goals and priorities to tailor our strategy of collection and analysis to fit your company’s priorities. We provide ESG services internationally through ESG M&A due diligence, ESG monitoring, ESG risk for compliance teams, and diversity, equality, and inclusion (DEI) executive due diligence in a timely, accurate, and specific manner.
ESG M&A Due Diligence
TDI offers ESG due diligence to support mergers and acquisitions (M&A), specifically targeting issues your company and stakeholders have zero tolerance for, to minimize threats presented by each potential transaction. The investigation looks for potential risk areas against the client’s and industry’s ESG criteria and identifies areas where the target asset or company and its management team may fall short. We examine all major areas of business risk, review corporate social responsibility reports with third-party vetting from outside sources like the UN Global Compact, and analyze social media profiles and independent reviews.
With ongoing ESG reporting requirements, companies are finding that a snapshot analysis of risk is not enough to manage their risk over time. Our analysts monitor client portfolio companies and third parties to quickly detect when there is a change to the ESG risk profile enabling clients to promptly respond. We tailor our approach to fit your priorities, considering industry knowledge and stakeholder values we identify nascent indicators of ESG risks to contextualize how ESG issues can manifest, enabling you to be ahead of the curve on emerging risk issues.
ESG Risk for Compliance Teams
Compliance officers and teams have been tapped to implement ESG risk strategies along with their typical anti-bribery and corruption compliance activities, often with no increase in budget. TDI consults with clients on integrating ESG risk elements into their existing compliance programs and investigates indications that third-party operations run counter to clients’ ESG priorities. For example, we are often called on to investigate third parties for potential indications that they have been associated with allegations of human rights abuses in their operations, including using forced or child labor.
DEI Executive Due Diligence
Executive due diligence assesses an executive’s track record to gauge their approach towards issues regarding diversity, equality, and inclusion. This report encompasses any history that could negatively impact your company’s reputation through association. This includes management and collaboration style, indications that the executive has contributed to a toxic or combative environment, association with employee disputes, and history of discrimination or culturally/politically insensitive statements. The investigation incorporates the executive’s total online presence and footprint to identify any activity that could suggest reputational risks or values counter to the client’s ethical standards.
Understand And Manage ESG Risk With TDI
ESG due diligence and risk monitoring are complex tasks necessary to protect the integrity of any business. Increasing regulations and shareholder interests can be difficult to keep up with, especially for enterprises looking to grow through acquisitions. Get in touch with TDI today, to learn more about how we can help your organization navigate the landscape of ESG risk.