Sustainability concerns are having a significant impact on investment and divestment processes, or in "the transactional workflow", the Association of Chartered Certified Accountants (ACCA) finds.
With this at hand, the ACCA says accountancy and finance professionals are at the heart of these transactional processes, bringing expertise and experience to quantifying risks, assessing outcomes and identifying deal-breakers.
According to a report produced jointly by ACCA and the Chartered Accountants Australia and New Zealand (CA ANZ), finance professionals need to develop appropriate skills and apply an ethical lens during the diligence phase, ensuring they understand sectoral issues and overall complexity.Â
The ACCA and CA ANZ report looks into why sustainability-related issues matter in the transaction workflow, examining the business context and the different dimensions of sustainability.
It looks at the perspective of the acquirer and the seller, and offers conclusions and top tips, including six key observations for sustainability in due diligence.
Six key observations for sustainability in due diligence
The report draws on the insights of nearly 50 accountancy and finance professionals from across the globe, many of them ACCA or CA ANZÂ members. Â
Among the key findings in the report regarding sustainability in transactions include:
- Sustainability-related opportunities and risks cannot be ignored in a transaction; they now form a fundamental part of the strategic intent of the transaction and the valuation of an entity.
- The assessment of these risks and opportunities must be comprehensively considered as part of the due diligence process, both as a specific workflow and as an integral part of other forms of due diligence.
- Organisations need to ensure that they have an appropriate level of expertise across the transaction workflow and the target’s operations, assets and liabilities.
