ESG Due Diligence
Danesmead Advisory provides comprehensive pre-investment ESG due diligence, analysing financially material sustainability risks and enabling our clients to make informed investment decisions, identify value creation opportunities and mitigate risks – ultimately enhancing portfolio performance.
Our support can augment an in-house sustainability team, bringing additional resource and technical know-how, or we can operate as an entirely outsourced function.
Financial performance is inherently tied to effective risk management. Integrating sustainability factors is essential for a comprehensive evaluation of investment opportunities and the creation of enduring long-term value.
Our Due Diligence Process
Assess
We assess the company’s sustainability risks based on materiality, sector, geography and regulatory environment including supply chain vulnerabilities, governance structures, and climate resilience.
Align
Our proprietary due diligence framework is designed to align with global frameworks (e.g., GRI, TCFD, PRI) and relevant regulatory standards. This can be augmented with client specific focuses.
Benchmark
We conduct a detailed peer analysis exercise, comparing the target company to peers, highlighting relative strengths and weaknesses across the group.
Insights
Our reports highlight key risks and opportunities, and provide clear recommendations to address sustainability risks and capitalise on sustainability-driven value creation.
Our Methodology
Our ESG Due Diligence methodology is based on the most important industry frameworks, plus sector-specific guidance. We agree a scope of work with each client, ensuring your priorities are addressed in our assessment. Our research includes reviewing documentation and disclosures, peer analysis, interviews with senior management and key stakeholders, qualitative assessments of sustainability factors based on our proprietary risk rating model.
Why ESG Due Diligence Matters
Risk Mitigation – Sustainability issues such as climate risk, labor practices, and corporate governance failures can significantly impact asset value. Due diligence ensures hidden risks are identified and managed proactively.
Regulatory Compliance – With evolving sustainability disclosure regulations (e.g., SFDR, CSRD/VSME, TCFD, SB 253 & SB 261), firms must ensure investments align with legal and reporting obligations.
LP Expectations – Limited Partners increasingly require transparency on sustainability risks and opportunities within their portfolios. Strong ESG due diligence demonstrates responsible investment practices.
Value Creation & Exit Strategy – Companies with strong sustainability performance often achieve higher valuations and more attractive exit opportunities. Integrating sustainability considerations from the start enhances long-term growth potential.
