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ESG in M&A: AVCJ Singapore 2022

Key topics discussed at AVCJ Singapore on ESG in M&A:
  • How to use ESG to avoid investing in potentially stranded assets

  • The transitional risk in climate change and the need to shift from high-carbon to low-carbon emitting assets / carbon tax, changes in subsidies

  • Exit high carbon exposure businesses, change of scope of businesses or global footprint

  • Improve the current carbon profile (reduce carbon emitting activities, direct emissions, and supply chain)

  • Use carbon markets to buy and sell carbon credits to offset emissions

  • Incur fines and higher taxes for emitting carbon at unsatisfactory levels/lose employees and customers

  • The policy transitional risks to consider including understanding a global theoretical price of carbon due to carbon taxes and changes in subsidies

  • Why every company needs a plan to get to Net Zero

  • What is your carbon neutrality pathway and the need to report on it—you will be expected to articulate the rational and the process—and report on your efforts

  • In determining material ESG factors, you need to know what your employees think (“I have one life; Why should I be working with you?”)

  • What your customers care about, what are your peers doing, and what your potential exit cares about

  • Anecdote: Rebranding a meter reading company into an energy efficiency company results in more job applications

  • ESG must be internalized—it is not just for one person. Everyone will be asked in DD: Are you really doing the things you say you are doing? Bidders looking for hidden ESG risks

Steven Okun, Moderator


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