Environmental Due Diligence

In the area of environmental consultancy, TMC has been extensively involved with environmental due diligence studies, in particular for the capital private equity divisions of financial institutions. The purpose of each of these environmental due diligence studies was invariably to produce a final report, to be submitted to the particular financial institution, which identified all the potential environmental problems, concerns and impact areas, which were found to be problematic following the site visit assessment and the subsequent review and analysis process and which were regarded as 'warning lights' for future. Thus, the extent and magnitude of the environmental problems, concerns and impacts found at the target company (if any), i.e. the target company's environmental risk profile, is the main purpose of the final report i.e. to ensure that there will be no environmental issues arising once the financial institution makes an investment into the particular target company is investing in or, in other words, that the financial institution would not be forced to incure additional costs as a result of environmental or associated liabilities from their investment into the particular target company. These liabilities may be arising either from historic pollution incidents or from present environmental liabilities i.e. the ultimate aim is to provide the financial institution with comfort, prior to their investment, that there are no past or present environmental liabilities, or, if there are such liabilities, what are the risks involved i.e. how risky they are and how to deal with them.


For this purpose, TMC has developed a proven methodology for their environmental due diligence studies, which includes

• (1) a request for and provision of appropriate documentation by the target company, ahead of the site visit,

• (2) review and analysis of the documentation obtained from the target company, ahead of the site visit, and appropriate preparation of the site visit,

• (3) a site visit to carry out an appropriate environmental due diligence assessment,

• (4) if so required, a request for and provision of additional information via email by the target company, following the site visit,

• (5) review of information gathered during the site visit and the documentation obtained from the target company, covering the basic process and site related issues, as well as environmental aspects thereof,

• (6) a final environmental due diligence report, involving all the environmental impact areas which were found to be problematic, following the site visit, the subsequent review and analysis process and which were regarded as 'warning lights' for future and

• (7) to the extent it is possible to ascertain from the information obtained from the target company and the site visit, inclusion in the final report of appropriate solutions or follow up action plans in mitigation of the problems, concerns and impacts found and clear recommendations as to the way ahead, in view of the target company's overall environmental risk profile.


These follow-up plans and recommendations would typically involve improved practices or recommended investments by the target company, in mitigation of the environmental problems identified in the environmental due diligence studies.


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