Is there a Market Demand for Green Due Diligence?

Abstract: During 2011, ÅF launched a service called Green Business Screening (GBS) that provides a situation analysis of the overall environmental performance of a company. The model measures a company’s external and internal environmental integration and evaluates sustainability work through ten categories within a company, where the focus changes from internal categories to external categories. GBS is a generic economic-environmental evaluation service that analyzes a company’s current environmental performance and ability to handle future environmental challenges. During the marketing and sales of GBS, a new potential market has been discovered that ÅF wants to examine further; the possibility to perform screenings in acquisition processes. Purpose The purpose of this Master’s thesis is to investigate whether there is a market demand for a Green Due Diligence. And more specifically, if GBS can be adapted from serving as a generic environmental-economic evaluation service to also be used as an analytical tool in acquisition processes. Method The project was carried out in four steps, some of them were overlapping and performed simultaneously: Compilation of up to date research reviewing the relationship between sustainability strategies and financial value. Mapping of the Swedish acquisition market and transaction services. Evaluation of the market potential for a Green Due Diligence. Assessment of the GBS model and ÅF’s internal resources and capabilities. Conclusions There is no market demand for a Green Due Diligence. Hence GBS in its current form has no potential as a transaction service on the Swedish acquisition market. However, GBS can be used in other contexts; e.g. in buyout companies’ business improvement work or when companies are conducting CSR reporting.