Private Equity – Environmental, Social and Governance (ESG) Due Diligence

Investors increasingly recognize the importance of incorporating sustainability and ESG analysis into their investment process, whether that analysis is used to ensure adherence to responsible investing mandates or as a risk management tool.  Third-party activists such as environmental and consumer advocates are playing an ever-larger role in driving not just regulation, but also scrutiny of business practices, posing “headline” and reputational risks to companies across the energy, financial services and healthcare sectors.

Our ESG team leverages its relationships with third-party advocates, industry groups, and regulators to analyze the risk profile of potential investments and create actionable best practices to mitigate risk to both the Target company and the investor over the course of an investment.

What kinds of ESG services does Capstone provide?

Capstone works with clients to tailor the scope of our ESG due diligence projects on the basis of factors specific to an investment, such as sector, geography and business model.  Examples of ESG services Capstone provides include:

  • Identification of environmental, social and governance factors that present risks or opportunities as it relates to a company’s valuation and/or reputation
  • Reputational and “headline” risk assessments; reputational assessment of a Target relative to competitors
  • Litigation and environmental risk profiles
  • Third party stakeholder engagement (consumer advocates, environmental advocates, landowner advocates, industry advocates)
  • Identification of best practices to mitigate going-forward risk
  • Assessment of a Target’s capacity, commitment and track record (CCTR) as it relates to a Company’s capacity for ESG management
  • Analysis of consumer lending practices as it relates to subprime or predatory lending concerns
  • Infrastructure development: assessment of adherence to best practices; identification of best practices for sustainable development and to mitigate reputational risk
  • Creation of ESG action plans to ensure continued risk management throughout the life of an investment
- Capstone LLC -

Washington DC

-Capstone Research Limited-

London