What is ESG Due Diligence (ESG DD)?

ESG due diligence is a review of an organization with regard to potential ESG risks, i.e. environmental, social and governance risks. ESG due diligence is usually carried out for investment decisions, sales value determinations or other status quo determinations and usually supplements the “classic” due diligence, which usually deals with legal, economic, financial and tax aspects.

Part of the ESG DD is the environmental due diligence (EDD), or if this also includes occupational safety, an EHS due diligence (also sometimes referred to as HSE due diligence).

What is ESG Due Diligence (ESG DD)?

ESG Due Diligence is a review of an organization with regard to potential ESG risks, i.e. environmental, social and governance risks. ESG Due Diligence is usually carried out for investment decisions, sales value determinations or other status quo determinations and usually supplements the “classic” Due Diligence, which usually deals with legal, economic, financial and tax aspects. Part of the ESG DD is the Environmental Due Diligence (EDD), or if this also includes occupational safety, an EHS Due Diligence (also sometimes referred to as HSE Due Diligence). While an EHS Due Diligence review focuses on the classic environmental and occupational safety risks, such as contaminated sites, potential ongoing environmental pollution, high accident rates or non-compliance with regulations, an ESG DD also covers the following topics in particular:

While an EHS due diligence review focuses on the classic environmental and occupational safety risks, such as contaminated sites, potential ongoing environmental pollution, high accident rates or non-compliance with regulations, an ESG DD also covers the following topics in particular:

Sustainable use of resources
Climate change resilience
Decarbonization opportunities and progress
Product safety
Respect for human rights
Compliance with the prescribed working conditions
Compliance with employee rights
Employee discrimination and equal opportunities
Anti-corruption compliance
General compliance risks
Corporate governance risks (risks due to poor corporate management)
Board structure and remuneration
ESG risks along the entire value chain
Competition law risks
Taxonomy conformity and associated financing risks
Reputational risks due to unsustainable corporate governance
Cyber security and data protection
Sustainable corporate governance

ESG Due Diligence Process

The specific content, focus and depth of an ESG Due Diligence are usually specified by the client. Depending on the depth of investigation of individual aspects, appropriate experts are consulted. ESG Due Diligence is an audit that is mainly carried out at the company to be audited by interviewing employees, inspecting documents and visiting the company. Furthermore, stakeholders of the company to be audited, such as neighbors, suppliers and authorities, can also be included.

Our offer

We are happy to support you in carrying out your ESG Due Diligence with our many years of auditing experience and our profound technical expertise in the three areas of environment, social affairs and governance.

Of course, we are also happy to take on only parts of the ESG Due Diligence as part of a larger team.