Key findings:

74% have ESG considerations as part of their M&A agenda, but only 51% possess a proper understanding of ESG in their area of investment.
Most investors (74% of U.S. and 82% of EMA) are now including ESG in their M&A agenda including 72% of financial investors and 76% of corporate investors in the U.S. compared to 94% and 77% of EMA investors respectively.
Investors will be conducting ESG diligence more frequently in the future, with 48% of EMA and 27% of U.S. investors now saying they will do it frequently (on more than 80% of deals), up from 25% for EMA and 16% for the U.S. for the previous two years.
68% of EMA investors and 62% in the U.S. said they would pay a premium for a target that demonstrates a high level of ESG maturity that is in line with their ESG priorities.

Impacting Deals

53% of U.S. and 66% of EMA investors said deal cancellation was the top consequence of a material finding
Conversely, 76% of debt providers to M&A said they went ahead with financing or underwriting, but with more conservative conditions, as a consequence of material findings.
54% of EMA and 56% of U.S. investors reported that selecting a meaningful yet manageable scope was one of the main challenges for ESG due diligence.
In addition, 49% of EMA and 59% of U.S. investors named the "lack of robust data or written policies of allegedly followed practices at the target" as a challenge.

"As the world continues to evolve, so do the expectations of businesses," said KPMG U.S. Partner, ESG Clare Lunn. "Our latest ESG Due Diligence Survey reveals an undeniable truth: Sustainable practices are no longer just a choice but a prerequisite for resilience and growth."

KPMG Study: Most U.S. Investors Want a Dedicated ESG Due Diligence Product to Analyze Risks and Opportunities

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