Written by: Pieter van den Berg
The end of the year is often used to present awards to companies that have achieved exceptional performance. This happens both regionally and nationally, with numerous companies being recognized for their exceptional performance. Moreover, more and more awards are given in the field of sustainability.
This phenomenon also affects the takeover market. In December, the M&A Awards are presented. These awards included categories such as Best Deal, Best Dealmaker, Best Private Equity Fund, and the ‘Best Diversity Team’. You may already be familiar with these awards from your own sector.
ESG (Environment, Social and Governance) has influenced almost all business models in all sectors. Sustainability is part of ESG and concerns all entrepreneurs. It also plays an increasing important role in the M&A market, which makes sense because investments and acquisitions are made on the basis of expectations that can create value in the future.
Annually, Ansarada conducts research on developments in the takeover market. That research shows that decision-makers and advisers involved in M&A consider ESG essential for future transaction practice. Private equity parties expect ESG to be one of the three main drivers of the takeover market in the coming years. In short, ESG has now become indispensable in the world of acquisitions, and we are already seeing the first ESG due diligence studies being conducted.
For the takeover market, ESG acts as an additional driver, partly due to new European regulations: the Corporate Sustainability Due Diligence Directive (CSDD), which aim is to identify, prevent, mitigate and terminate potential negative impacts of business activities on human rights and the environment. This affects markets, with scale becoming even more important. A wave of acquisitions is already visible in the accounting industry. Almost daily, firms are acquiring or merging to better respond to increased regulation and the quality demands.
In short, ESG offers new opportunities for many entrepreneurs. I can already see the INTO business ESG Award coming….
This article was originally published in INTO business magazine.