ESG on the Rise: Making an impact in M&A

06 May 2019

Download Publications (907.05 KB)

The buzz surrounding environmental, social and governance (ESG) factors in investment and M&A decisions is stronger than ever. Issues ranging from climate change to human rights and labor standards have come to the forefront of investors’ concerns. But how M&A dealmakers and fund managers are taking these factors into account when considering potential investments is still an evolving process.

To better understand the extent to which ESG impacts M&A and investment in today’s market environment, IHS Markit commissioned Mergermarket to survey private equity, asset management, and corporate executives for their insights.

Key findings include:

• After identifying a promising target, nearly all respondents (90%) said they conduct ESG due diligence.

• Respondents predict that ESG issues will become significantly (53%) or somewhat (30%) more important in M&A decision-making over the next 12 to 24 months.

• Climate change and greenhouse gas emissions emerged as the top ESG priority for over a third of respondents (37%), followed by human rights and labor standards for over a quarter (27%).