Show deal teams how to embed energy and ESG due diligence in every acquisition.
Why Energy and Emissions Belong in Core M&A Due Diligence
Energy and emissions risks often surface too late in corporate transactions. Deal teams scrutinize revenue and liabilities but rarely probe utility costs, energy intensity, or compliance exposure. Post-close, acquirers discover inefficient sites, outdated tariffs, and facilities facing carbon regulations—issues that quietly erode returns and complicate climate and financing commitments.
For Sagiliti’s clients, who already invest in utility data quality and emissions reporting, this is both a missed opportunity and a preventable risk. Every acquisition carries a hidden energy and emissions profile. Evaluating it pre-signing should be as routine as reviewing tax or legal exposures. That requires reconciled utility data, clear meter-to-asset mapping, transparent emission factors, and actionable improvement playbooks.
Start by reframing the core question: not “Does this company have an ESG policy?” but “What will this deal do to our energy and emissions profile over the next decade—and how will we manage that?”
A Practical Energy and ESG Checklist for Acquisitions
- Integrating energy and ESG diligence doesn’t require a new process—just a structured checklist:
- How much does the target spend on utilities by commodity, region, and facility, and how has that changed over 3–5 years?
- What drives that energy use (plants, labs, data centers), and how is it managed?
- What is the current Scope 1 and 2 footprint, how is it calculated, and does it align with your ESG methods?
- Which facilities face carbon pricing, electrification policies, or performance standards?
- Expect a basic data pack early: 24–36 months of utility invoices, recent energy reports or dashboards, and a list of key equipment and projects. Even partial data highlights red flags—missing bills, inefficient tariffs, or compliance issues.
Tailor your checklist to deal type:
Corporate or platform deals: Focus on total spend, governance, and methodology alignment.
Asset or project deals: Focus on site performance, tariff and interconnection exposure, and forecast accuracy.
The goal is not to make deal teams energy experts but to ensure they know when to escalate issues—or price them in.
Turning Diligence into Post-Close Value
Energy diligence only matters if it drives integration. Assign joint ownership to sustainability, finance, and operations teams before close, with a 100-day plan that answers:
How will we absorb the target’s utility and emissions data into our systems?
What near-term actions will improve high-cost or high-emissions sites?
How will we align long-term capital and decarbonization plans?
Prioritize initiatives with clear payback—rate optimization, controls tuning, waste reduction—and build a roadmap for deeper retrofits over time. Finally, report annually on how acquired assets are tracking against the energy and emissions theses behind each deal.
Done right, this approach turns energy diligence into a repeatable source of value creation—helping acquirers walk away from hidden-risk deals and double down on assets where strong energy and data management can deliver outsized returns.