October 13, 2021

Climate Change to Be Key Driver in M&A Deals: Survey

By Alexei Alexis, CQ Roll Call

Climate-change is expected to play an increasing role in mergers and acquisitions amid regulatory and other risk factors, according to a survey conducted by Datasite, a provider of cloud-based technology services for M&A professionals.

Forty-four percent of dealmakers expect climate change to be the biggest sticking point in their transactions in the next 12 months, the survey, released Wednesday found.

Seventy percent of those surveyed said environmental, social, and governance, or ESG, issues in general have become a high priority within their organizations at the board level, and 55 percent said their companies are preparing for climate-change related activist intervention in particular.

"Global weather and public health crises have set off warning alarms to businesses everywhere," Datasite CEO Rusty Wiley said in a statement.

Corporate boards are taking steps to mitigate ESG issues, especially environmental concerns, while also using ESG to "create value and tap into a growing area of interest among investors, who have closed as many climate-focused funds in 2021 to date, as in the last five years combined," he added.

The Datasite survey, conducted in September, found that dealmakers were divided over what would drive the most climate change related M&A. Thirty-seven percent pointed to new regulations, such as policies aimed at achieving "net zero" carbon emissions. Another 37 percent cited new technologies designed to adapt to climate change, including "clean tech."

Datasite polled 400 U.S. and U.K. M&A professionals at the director level and above, involved in corporate development, banking, private equity and legal services.

Reprinted with permission from CQ Roll Call via Thomson Reuters Westlaw 

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