Sustainability

ESG elements are starting to permeate the M&A landscape, from the looming threat of transactions being halted due to ESG risks to the attractions of higher valuations due to ESG achievements. Throughout the investment life cycle, L.E.K. facilitates an ESG lens: origination and screening, due diligence based on ESG risks and performance, portfolio management to enhance sustainability-driven goals, and value creation grounded in sustainable metrics.

We advise our clients through aligning the target’s internal operating model and performance with potential investors’ ESG requirements, as well as assessing macro sustainability trends on the target’s outlook, both of which are a critical element to both buy- and sell-side deals. Our broad private equity experience enables us to understand the ESG impact on multiples and exit strategy to support shareholder objectives.

Companies are often starting from scratch when broaching the topic of sustainability strategy. The C-suite is often left wondering where to begin and how to cut through the noise of a rapidly changing environment.

L.E.K. provides end-to-end offerings, from helping clients establish credible goals to supporting strategy development and implementing the required changes. As measurement and reporting become increasingly critical for accountability, companies can rely on us to establish a data and analytics program to capture relevant ESG metrics. Further, L.E.K. partners work with clients to guide the activation of sustainability strategies within their organizations.

Wherever businesses are on their journey to net zero, L.E.K. has the experience, tools and methodologies to support informed decision-making, impactful plans and desired outcomes.

Our work embraces the development of the company vision, sustainability goals and net-zero targets together with the “where to play,” “how to win,” “how to configure” and “how to get it done” choices. Underpinning these questions is the rise of nascent technologies. L.E.K. evaluates these technologies to understand how they will impact the strategy or be required to support the strategy.

With our clients, we endeavor to align on clear answers to the following:

• What does net zero mean for your company and industry?
• What initiatives would be required?
• What are the benefits and challenges?
• How should initiatives be prioritized and phased?

In an ever-changing business environment, sustainability trends offer myriad opportunities for growth and innovation. In establishing a sustainability platform, we advise our clients on building solutions that enable their customers to achieve net-zero or other sustainable objectives. Companies can capture additional upside potential by innovating new products or services that embed sustainability at their core. Alternatively, companies can pivot their current capabilities or gradually evolve them to meet the needs of rapidly expanding greener markets.

In identifying these growth avenues, L.E.K. helps clients both enable and benefit from the opportunities unearthed by the sustainability transition. “Doing well” does not have to come at the expense of “doing good.”

Businesses want to understand how sustainability trends will impact the markets in which they compete and the products and services they offer. L.E.K. offers extensive research, scenario analyses and assessments of emerging but unproven technology.

Undertaking this work provides companies with a clearer picture of the risks and opportunities they face, as well as the financial impacts on their current business. With these implications clarified and defined, we can then evaluate how sustainability could be integrated into a company’s existing corporate strategy or overall growth strategy.

ESG elements are starting to permeate the M&A landscape, from the looming threat of transactions being halted due to ESG risks to the attractions of higher valuations due to ESG achievements. Throughout the investment life cycle, L.E.K. facilitates an ESG lens: origination and screening, due diligence based on ESG risks and performance, portfolio management to enhance sustainability-driven goals, and value creation grounded in sustainable metrics.

We advise our clients through aligning the target’s internal operating model and performance with potential investors’ ESG requirements, as well as assessing macro sustainability trends on the target’s outlook, both of which are a critical element to both buy- and sell-side deals. Our broad private equity experience enables us to understand the ESG impact on multiples and exit strategy to support shareholder objectives.