Sustainability has long been a focus for corporates across the world, as businesses recognise their responsibility to help tackle some of society's biggest challenges. The integration of Environmental, Social, and Governance (ESG) principles is no longer a mere regulatory checkbox. However, it has remained challenging to demonstrate how the promotion of ESG as part of a company's operations can deliver financial as well as societal value.
At A&M, we are committed to partnering with our clients to support them in their efforts to help solve global sustainability challenges and, at the same time, driving ESG transformation that delivers business results. By integrating ESG into our core services and demonstrating its financial value, we are helping our clients to navigate the complexities of sustainability to achieve competitive advantage and make a real impact.
Our comprehensive, collaborative, and value-driven approach ensures that we are not just meeting regulatory requirements but driving meaningful, long-term business change.
The Evolving ESG Landscape
The ESG agenda is being shaped by multiple secular themes. Physical climate change and extreme weather events are becoming more prevalent, geopolitical pressures are reshaping supply chains, and the demand for clean commodities is forcing nations to transform their economies and core infrastructure. Green technologies are proliferating, reaching a tipping point in the scale curve, and large amounts of capital are being committed to the transition, albeit often frustrated by a lack of viable projects.
Despite these trends, corporate responses to the ESG agenda have often fallen short. The focus on value preservation remains heavily regulatory and compliance-driven, while the value creation focus is often limited to valuations without substantial evidence. There is a persistent inability to scale ESG initiatives and link non-financial metrics to financial returns, such as ESG-linked enterprise value or EBITDA. Moreover, the short-term focus of many corporate strategies fails to address the long-term nature of ESG challenges.
How A&M Can Help
A&M has identified an opportunity to bridge the gap between the current state of the market and its potential through multidisciplinary capabilities in transformation advisory and delivery. We leverage our existing capabilities in transaction diligence (covering financial, operational and commercial) to integrate ESG due diligence, differentiating ourselves with value-accretive ESG services rather than mere compliance checks.
Our goal is to drive sustainability-linked transformation by demonstrating how non-financial ESG metrics can lead to financial returns. We have developed a qualitative and quantitative approach to accurately reflect the maturity, quality, and scope of a target company's sustainability path. This helps identify advancement plans that lead to tangible results in both value preservation and value creation.
Collaborative and Comprehensive Approach
Our new EMEA ESG practice provides clients with clearly articulated, high-impact ESG-related propositions that have direct links to enterprise value and EBITDA. Our focus areas include transaction diligence and advisory, ESG-linked performance improvement and transformation, and support for CFOs as they integrate non-financial sustainability metrics into their audited annual reports.
We also support the energy transition and industrials decarbonization agenda, working with banks, multilateral development agencies, infrastructure funds, and insurance companies to identify new project opportunities for financing and delivery.
Originally published 09 September 2024
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