Environmental liabilities can devastate investment returns. Rigorous environmental due diligence is non-negotiable for acquisitions with any potential environmental exposure.
Phase I & II Assessments
Phase I Environmental Site Assessments identify recognized environmental conditions without invasive testing. Phase II assessments involve soil and groundwater sampling to quantify contamination levels and remediation costs.
Climate Risk Assessment
Physical climate risks — flooding, wildfire exposure, extreme heat impacts — and transition risks — carbon pricing, regulatory changes, stranded assets — require assessment for investments in climate-sensitive businesses and locations.
ESG Data Collection
Pre-acquisition ESG data collection establishes baseline environmental metrics against which future improvement can be measured and reported to stakeholders with increasing ESG transparency expectations.
Remediation Indemnification
Transaction structures for acquisitions with environmental exposure require careful attention to remediation indemnification provisions, escrow arrangements, and insurance solutions that allocate environmental risk appropriately.
More insights from IKON Group Investments — Houston, TX