Free template
A free ESG due diligence checklist in Word covering environmental, social and governance risks, reporting duties and the value creation opportunities buyers often miss.
By Christopher Fagan, Managing Partner, PEF Consulting Partners
A note before you start
ESG due diligence has moved from a box on the risk register to something that changes price and plans. The useful version separates genuine liabilities, such as contamination, safety failings or bribery risk, from the reporting gaps that cost money to fix after completion. Ask for data rather than policies, and turn each finding into a cost, a condition or a hundred day action.
Christopher Fagan, Managing Partner, PEF Consulting Partners
Agree the scope with the deal team, because sector and geography decide which questions matter most. Request the evidence listed, interview management, and rate each area red, amber or green. For every material finding, record the deal impact: a price adjustment, a warranty or indemnity, a condition, or an action for the first hundred days.
[Organisation name] | Version 0.1 | [Date] | Owner: [Name, role]
| Question | Evidence requested | RAG | Finding and deal impact |
|---|---|---|---|
| What are the scope 1, 2 and 3 emissions and how reliable is the data? | Carbon footprint, method, any assurance | ||
| Are there environmental permits, breaches or contamination? | Permits, regulator correspondence, site surveys | ||
| How exposed is the business to climate and transition risk? | Climate risk assessment, energy contracts | ||
| Is the business caught by ESOS, SECR, CBAM or similar duties? | Compliance records and notifications |
| Question | Evidence requested | RAG | Finding and deal impact |
|---|---|---|---|
| What is the health and safety record? | RIDDOR reports, accident log, HSE correspondence | ||
| Are there modern slavery or labour risks in the supply chain? | Modern slavery statement, supplier audits | ||
| How are employees treated and retained? | Turnover, pay gap reports, tribunal claims |
| Question | Evidence requested | RAG | Finding and deal impact |
|---|---|---|---|
| Are there bribery, sanctions or competition law risks? | Policies, training records, investigations | ||
| How strong are board oversight and controls? | Board minutes, risk register, audit reports | ||
| Is data protection compliant? | ICO correspondence, breach log, DPIAs |
| Question | Evidence requested | RAG | Finding and deal impact |
|---|---|---|---|
| Which sustainability reporting duties apply now and after the deal? | CSRD, UK SRS, SECR and climate disclosures | ||
| Are there sustainability claims that could be challenged? | Marketing claims and the evidence behind them |
| Question | Evidence requested | RAG | Finding and deal impact |
|---|---|---|---|
| Where could energy, waste or supply chain changes cut cost? | Energy bills, waste contracts, logistics data | ||
| Would better ESG data help with lenders, customers or the exit? | Customer requirements, financing terms |
Template by PEF Consulting Partners, pefconsultingpartners.co.uk. Free to use and adapt.
Related reading: ESG in exit readiness, ESG consultancy and compliance, the technology due diligence checklist, value creation planning.
A review of a target’s environmental, social and governance risks and opportunities before a deal, covering liabilities, regulatory duties, reputation and the value that better ESG performance could create.
Alongside financial and legal due diligence, early enough that findings can change the price, the sale and purchase agreement or the hundred day plan.
Contamination or permit breaches, serious safety failings, bribery or sanctions exposure, modern slavery in the supply chain, and sustainability claims the business cannot evidence.
Through costs to fix, contingent liabilities, conditions and the impact on financing and exit. Strong ESG data can also support value, because lenders and buyers increasingly ask for it.
If ESG findings are sitting in a report rather than in the model, they are not doing their job. We help deal teams price them and plan the fixes.