Is enough consideration given to Environmental health and safety due diligence?

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    Ceri Barton

    Environmental health and safety due diligence helps to ensure all parties have a full understanding of the liabilities and risks associated with the deal. What are the views on whether EHS is more often than not overlooked in a variety of areas including for example H&S compliance or third-party related risks?



    We run into the need for an environmental study to be completed prior to being able to sell real estate with the sale of a business in some industries. These studies are expensive, remediation more expensive and sometimes are a deal killer. In these situations, we will have the buyer and seller work out a lease arrangement versus buying the real estate.


    VishnuVardhan A

    there is no viable alternative to fossil resource(coal or oil) – only claims till date
    the reason why it hasn’t been replaced yet. its also the reason why many nations keep pushing their realizations further into the future.
    its better to do a DD taking that into consideration.
    it might be an uncomfortable fact to live with, going all activist mode on the target company might put the deal at risk.



    I think it depends on the industry and the type of assets that could be exposed to environmental hazards. In my limited experience with this specific type of DD, I recall various environmental studies being performed (but I don’t think it was technically “due diligence” but more of condition to get to the closing table). Also, I’ve certain this typically covered with extensive indemnification provisions buried in the terms & conditions of the purchase agreement.

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