Date posted: 05/03/2024

Seizing Opportunities: CAs Lead the Charge in Sustainability Integration for M&A

Sustainability considerations are now front and center in merger and acquisition transactions.

In Brief

  • Report draws from insights of nearly 50 experts
  • Sustainability consideration now essential in Merger and Acquisition transactions
  • Sustainability-related opportunities exist for finance professionals

In today's global business landscape, the integration of sustainability into financial due diligence for Merger and Acquisition (M&A) transactions is not just crucial—it's an opportunity for finance and accounting professionals to lead and innovate. A joint report by ACCA and Chartered Accountants Australia and New Zealand (CA ANZ) underscores this evolution, emphasising the pivotal role finance and accounting professionals play in driving sustainability initiatives within M&A transactions.

Drawing insights from nearly 50 finance, sustainability, and M&A experts worldwide, the report, "Sustainability in Transactions" reveals that sustainability considerations are now central to strategic intent and valuation in transactions. It's not just about risk mitigation; it's about uncovering new avenues for value creation.

Key Findings:

  • Fundamental Shift: Sustainability considerations are now integral to transactions, shaping strategic decisions and influencing valuation.
  • Comprehensive Due Diligence: The process must thoroughly assess sustainability risks and opportunities.
  • Opportunities Abound: Finance professionals are uniquely positioned to identify and capitalise on sustainability-related opportunities, driving innovation and long-term value creation.

"Sustainability risks and opportunities are now front and centre in M&A," said Simon Grant FCA, Group Executive Advocacy and International Development, adding his view that "finance and accounting professionals must adeptly navigate this landscape to not only mitigate risks but also uncover new avenues for value creation."

The report also highlights variations in sustainability considerations in deal making across locations and sectors. Some organisations prioritise sustainability in deal-making, recognising the potential for innovation and growth, while others risk significant exposure by neglecting these factors.

To address these challenges and capitalise on opportunities, the report offers actionable insights and recommendations. It encourages finance and accounting professionals to embrace sustainability integration in due diligence strategies and develop the skills needed to assess sustainability-related risks and opportunities effectively.

"Finance and accounting professionals play a pivotal role in ensuring successful M&A transactions in today's sustainability-driven landscape," said Grant.

"by seizing opportunities in sustainability due diligence, they can drive impactful change and spearhead innovation."

As organisations increasingly recognise sustainability's importance in M&A, finance and accounting professionals must adapt proactively. The report serves as a vital resource for such professionals looking to capitalise on the opportunities presented by sustainability integration in M&A transactions.

For more insights, listen to Charlotte Evett, General Manager NZ Regions at CA ANZ as she discusses the topic of sustainability and financial due diligence with Victoria Gillespie, head of ESG at Alter Domus and Teuta Oruci, founder and CEO of Cleantech 360.

The full report can be downloaded below.