ESG due diligence
Integrating ESG into the due diligence process
Our ESG due diligence service enables investors and other stakeholders to identify and quantify material sustainability risks and opportunities, assess a company’s ESG performance and maturity, and make informed decisions that align with both financial goals and long-term impact.
ESG is an essential part of the diligence trajectory. It uncovers hidden risks, highlights opportunities, and helps to meet the growing expectations of limited partners. For investors who are challenged with the evaluation of the ESG performance of target or portfolio companies, we are here to help.
With Good Growth Collective as your partner, ESG becomes a strategic asset, one that drives smarter investments and builds future-ready portfolios.
Curious to know more? This is how we can help:
- Understanding key ESG topics
- ESG data collection
- ESG scoring
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Understanding key ESG topics of your target company
We conduct an ESG helicopter analysis by reviewing the target company’s sustainability reports, certifications (e.g. ISO 14001, B Corp, EcoVadis), and current ESG strategy to understand its ambition and focus areas. Simultaneously, we assess the investor’s ESG priorities to identify alignment, potential synergies, and value creation opportunities. Based on the principle of double materiality, we analyze both the company's impact on people and the environment, as well as its financial exposure to ESG risks
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Collecting ESG data of the target company
Based on the material topics of your target, we collect ESG data from the data room (including a targeted ESG request), interviews and surveys with management, and public ESG reports from industry peers for benchmarking. This data includes GHG emissions (if available) and energy use, as well as your policies regarding working conditions and governance structures.
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Scoring ESG performance and quantifying risks and opportunities
We assess ESG performance through two lenses: a business review and a forward-looking risk-opportunity analysis. Environmental performance is benchmarked using intensity metrics, while social and governance are scored based on the presence and quality of key policies. We then identify and quantify material ESG risks and opportunities, translating them into financial impact. This gives investors clear insight into current performance and future value potential.
The value of ESG due diligence
Reveals risks and opportunities
ESG due diligence helps investors uncover hidden risks like regulatory exposure, reputational damage, or supply chain vulnerabilities that could materially affect valuation. At the same time, it highlights value-creation opportunities that can directly impact ROI.
Future-proofs investment
With increasing ESG regulation (e.g. CSRD, SFDR, EUDR), investors need to understand whether a target company is compliant or will require costly upgrades. ESG due diligence flags these issues early, reducing legal risk and future compliance costs.
Improve deal confidence
Robust ESG analysis provides transparency and builds confidence among limited partners, boards, and other stakeholders. It supports more informed decision-making and strengthens the credibility of the investment thesis.
Want to know more about ESG due diligence?
With ESG due diligence you can align investments with sustainability and put your money where it's most needed.
Why is ESG Due Diligence important for your business?
ESG due diligence is essential in investment decisions because sustainability risks directly affect valuations and returns. With regulations like CSRD, SFDR, and EUDR already in force, investors must identify ESG risks and opportunities early. Failure to assess them can lead to higher compliance costs, delays, or reduced deal value. Proactive ESG due diligence builds confidence with limited partners and stakeholders, supports informed decision-making, and helps avoid costly post-acquisition surprises.
Which companies does ESG Due Diligence apply to?
The ESG due diligence service supports private equity firms, venture capital funds, and institutional investors during acquisitions or portfolio management. M&A advisors and investment banks use our assessments for deal certainty. Target companies in high-impact sectors such as manufacturing, energy, real estate, and consumer goods face the most scrutiny. Mid-market businesses and family offices also benefit when aligning investments with sustainability goals and mitigating operational risks.
When should you conduct ESG due diligence?
ESG due diligence should begin during preliminary screening or the early due diligence phase. For SFDR compliance, it must be completed before investment decisions. Post-acquisition reviews within the first 100 days help set improvement roadmaps. Companies preparing for exit should assess 12 to 18 months in advance to maximise valuation. Ongoing portfolio monitoring, annually or bi-annually, ensures continuous compliance and value creation.
What are the key ESG risks and opportunities typically uncovered during due diligence?
Assessments often reveal risks such as regulatory exposure, reputational damage, and supply chain vulnerabilities. Common findings include ESG compliance gaps, weak governance practices, and exposure to carbon transition risks. Opportunities often include operational efficiencies, stronger stakeholder engagement, and product or market advantages. Using a double materiality perspective, we evaluate both your company’s impacts on people and the environment, and how external ESG factors could affect your financial performance.
What makes Good Growth Collective’s SaaS model unique for ESG Due Dilligence?
Our Sustainability as a Service subscription embeds ESG due diligence across the full investment lifecycle. We maintain updated risk profiles, verify evidence, and deliver transaction-ready findings on demand. In-house teams often scramble under deal timelines, risking missed red flags or undervalued opportunities. Our continuous monitoring and targeted analysis ensure faster, more reliable assessments, enabling confident decisions and smoother execution from screening to post-deal integration.
Reach out to us for any question
Wondering how we can help? Or looking for more information on an ESG topic?
Contact us
Kevin van Dam
Managing Consultant