Our latest Global ESG Due Diligence Study highlights a notable rise in the Nordic and other global markets regarding the prioritization of ESG within M&A strategies. Over the past 12 to 18 months, ESG due diligence has become a key part of investment strategies, with 85% of organizations incorporating ESG into M&A agendas and 70% reporting increased interest in ESG issues. Leading investors integrate ESG due diligence as a key component of their strategies, using it as a driver for financial returns. Tools such as 100-day action plans focusing on decarbonization and supply chain management enable them to address both risks and opportunities. Investors also anticipate an increase in ESG due diligence transactions in the next two years, with 57% planning to conduct ESG reviews for the majority of their deals.
This reflects rising demand tied to CSRD compliance, helping organizations prepare for DMA/CSRD reporting and regulatory adherence. Challenges remain in scoping, data quality, and quantification, but new solutions aim to address these issues. Financial investors lead in integrating ESG strategies into due diligence, prioritizing value creation over risk minimization.
However, ESG due diligence budgets remain low, highlighting a gap in its perceived importance compared to other due diligence areas and perhaps a missed opportunity in terms of proactively working with the DMA and CSRD processes.
ESG maturity adds value to your company
In both the Nordic and other global markets, ESG considerations are seen to add value to M&A targets. Nordic investors are particularly willing to pay a premium for targets with high ESG maturity, with around 70% open to paying extra. The majority are willing to pay a 1-5% premium, and 17% are ready to pay even more (6-10%).
However, none of the Nordic investors are willing to pay over a 10% premium for ESG maturity. While the willingness to pay a premium is also present globally, it is less pronounced, with 54% of investors open to paying such premiums. Interestingly, 5% of global investors are willing to pay over a 10% premium, indicating that while the general willingness to pay is lower globally, some investors outside the Nordics are prepared to pay even higher premiums than their Nordic counterparts.
Every financial investor in the Nordics is guided by ESG due diligence
ESG remains central even after deal closure. In the Nordics, ESG due diligence findings is a key to shaping post-closing strategies. 100% of the Nordic financial investors report a correlation between due diligence findings and their post-closing action plans, with the majority reporting a strong direct link. In comparison, 83% of global financial investors report a similar correlation, indicating that Nordic financial investors are using ESG insights more extensively than their global counterparts to establish strategy after a deal closes.
Similarly, corporate investors in the Nordic region also tie ESG insights to post-closing actions, with 90% reporting a link either to a strong degree or some degree, surpassing the 78% of global investors who report similar levels of integration. Overall, while most global investors, both financial and corporate, integrate ESG due diligence findings into their post-deal strategies to a strong degree or some degree, the Nordics are taking the lead in integrating ESG insights into post-deal strategy.
