February 18, 2026
Checklist for Climate Risk in M&A Deals
M&A transactions are increasingly influenced by climate risk, with buyers paying valuation premiums for companies that demonstrate strong ESG performance and discounting those with sustainability gaps. Effective climate due diligence evaluates carbon emissions (Scope 1–3), resource efficiency, adaptation planning, regulatory alignment with frameworks such as Task Force on Climate-related Financial Disclosures and Corporate Sustainability Reporting Directive, and board-level governance oversight. Failure to assess physical and transition risks can result in stranded assets, regulatory penalties, and material valuation adjustments.
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