Environmental & Social Due Diligence

Environmental & Social Due Diligence

The Connection between Due Diligence and Industrial Compliance & Risk Management

Due diligence is a thorough investigation and evaluation of a business or project to ensure that all relevant information and potential risks are known and addressed before a deal is finalized or a project is initiated. In the context of industrial compliance and risk management, due diligence plays an important role in making informed decisions and mitigating potential environmental hazards and liabilities, especially during different types of business transactions.

Hendrikson DGE’s team has a wealth of knowledge and proficiency in due diligence and auditing projects across several European countries. We assist companies in understanding the potential risks, gathering pertinent information, and constructing a comprehensive due diligence plan tailored to their specific needs. Importantly, our team is well-equipped to work under the time pressure that due diligence projects often entail, ensuring timely completion of tasks. Our commitment to environmental responsibility and sustainability, combined with our expertise in mergers and acquisitions and ESG principles, makes us a trusted partner for businesses looking to navigate the complexities of industrial compliance and risk management. By investing in comprehensive due diligence processes and leveraging our ability to work effectively under time constraints, companies can minimize potential risks, ensure compliance with environmental, social and health & safety related regulations and best practices, and contribute to a more sustainable future for all.

Hendrikson’s Due Diligence services cover a wide range of components, including site assessments (ESAs or Environmental Site Assessments), records reviews, stakeholder interviews, and site visits. In the case of ESAs, a methodical approach guarantees a meticulous evaluation of the current and historical usage of a property, known impacts or potential liabilities, and ongoing or planned activities that could impact the environment. In the case of ESAs, a methodical approach guarantees a meticulous evaluation of the current and historical usage of a property, known impacts or potential liabilities, and ongoing or planned activities that could impact the environment.

An Environmental Due Diligence process typically comprises the following steps.

1. Reviewing Findings and Documentation: We scrutinize pertinent information about the subject property or area, including previous due diligence reports, decisions from relevant authorities, soil and groundwater studies, and various databases. This initial research establishes a solid foundation for a comprehensive understanding of the site’s environmental and operational history.

2. Site Visits and Stakeholder Interviews: Our team conducts on-site or off-site visits and interviews with relevant authorities and representatives to collect vital information about the property. During site visits, we reassess the findings and evaluations from the preliminary research phase to ensure accuracy and comprehensiveness.

3. Risk Evaluation: We appraise the severity and probability of risks to human health, the environment, and business operations against the chosen relevant standards (ASTM, EP4, HSE

guidelines etc.). This evaluation assists clients in understanding potential vulnerabilities and guides the development of risk mitigation strategies. In addition, we investigate potential risks to employees, customers and other stakeholders resulting from the company’s operations and management of social issues (including labor law compliance, subcontractor management, stakeholder engagement etc.) This assessment enables organizations to maintain a secure and healthy work environment while adhering to applicable regulations.

4. Cost Assessment: Our experts examine the costs associated with potential risks and remediation requirements. This analysis empowers clients to make informed decisions about investments, acquisitions, and project development.

5. Regulatory Compliance Assessment: We evaluate the property or business against existing environmental regulations and requirements to ensure full compliance. This step helps our clients avoid potential fines, penalties, or legal issues.

6. Remediation Strategies and Recommendations: Based on our findings, we provide actionable recommendations for addressing identified concerns and mitigating potential risks. We also offer guidance on remediation strategies to ensure that clients take appropriate measures to protect the environment, their stakeholders and their investments.

In conclusion, due diligence is an essential aspect of industrial compliance and risk management. It helps businesses understand and address potential environmental risks, adhere to sustainability requirements, and make informed decisions. Hendrikson DGE’s experienced team provides qualitative due diligence and auditing services to businesses in various industries, including renewable energy, real estate and heavy industry.