An analysis of ESG risk and opportunities across target markets
Overview
A UK mid-market PE firm sought to better understand ESG risks across the complete value chain of a target company. The target company provides wearable GPS location tracking technology and serves primarily government clients – including prison services - in numerous emerging markets.
Work
We produced a detailed analysis of ESG risks and opportunities across the target firm’s 14 largest markets. We analysed government sentiment toward alternatives to imprisonment and funding streams across all these markets. We examined ESG risks within the supply chain, to include environmental and human rights policies in the target’s contracted manufacturing site and the full range of ESG risks facing the target from their interactions with 14 emerging market sovereigns, covering everything from anti-corruption and bribery to social justice policies related to prison overcrowding.
Impact
Our client used our findings in two main ways. First, to inform the investment committee and M&A strategy to mitigate the ESG risks we identified. Second, to provide target company management with a multi-year growth plan that would improve ESG conditions throughout the target company’s value chain.
