The ESG Factor: How Sustainability and Ethics Are Redefining Mergers and Acquisitions
The business world is changing fast, and one of the most significant shifts is the rise of the ESG factor, which stands for Environmental, Social, and Governance. These three principles are now at the heart of how companies make decisions, build trust, and grow through mergers and acquisitions (M&A). This transformation means ESG is not just a “nice-to-have” anymore—it’s a key metric of long-term success . Investors, regulators, and even consumers are holding companies accountable. As a result, ESG priorities now shape which M&A deals move forward and which ones fall apart. Why ESG Shapes Deal Strategy and Investor Confidence The ESG factor influences M&A in many ways—from how a company is valued to how deals are structured. Investors want to know if the business they’re buying or merging with has sustainable and ethical practices. If it doesn’t, the risks can be too high, even if the company looks strong on paper. For example, poor labor practices, unsafe supply chain...