ESG Still Matters in Corporate Dealmaking
By: Anneken Tappe · July 18, 2024 · Reading Time: < 1 minute
Environmental, social, and governance (ESG) practices have been under attack. But when it comes to business decisions, it still counts. A lot.
Some politicians and investors have argued against ESG, pointing at investment performance or “wrong” priorities. But when it comes to corporate dealmaking, ESG evaluation remains standard practice, according to a survey from Deloitte.
ESG Evaluations
The 500 business leaders surveyed unanimously said they considered ESG in acquisitions and divestitures, while more than half (57%) used specific ESG metrics in their evaluations of potential mergers and acquisitions (M&A) for their companies. The majority of respondents also reported abandoning deals due to a target’s poor ESG profile.
Companies still assign weight to their own ESG practices as well. Nearly three-quarters of respondents (74%) evaluated their portfolios from an ESG perspective.
Perhaps more notable than the absolute figures is their relative increase from Deloitte’s last survey in 2022, which showed 64% conducting ESG evaluations when weighing new acquisitions, and just 50% for divestitures. This suggests that, despite significant pushback, the role of ESG behind the scenes is only continuing to grow.
Looking for more stories like this? Check out On the Money — SoFi’s one-stop-shop for news, trends, and tips!
Please understand that this information provided is general in nature and shouldn’t be construed as a recommendation or solicitation of any products offered by SoFi’s affiliates and subsidiaries. In addition, this information is by no means meant to provide investment or financial advice, nor is it intended to serve as the basis for any investment decision or recommendation to buy or sell any asset. Keep in mind that investing involves risk, and past performance of an asset never guarantees future results or returns. It’s important for investors to consider their specific financial needs, goals, and risk profile before making an investment decision.
The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. These links are provided for informational purposes and should not be viewed as an endorsement. No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this content.
Communication of SoFi Wealth LLC an SEC Registered Investment Advisor
SoFi isn't recommending and is not affiliated with the brands or companies displayed. Brands displayed neither endorse or sponsor this article. Third party trademarks and service marks referenced are property of their respective owners.
SOSS24071802