Global investors willing to pay for assets with better ESG footprint: Alvarez & Marsal’s Paul Aversano
Subscribe to enjoy similar stories. Global investors are increasingly prioritizing assets with a strong environmental, social and governance (ESG) footprint, driving up their value and putting ESG at the forefront of deal-making strategies in India, according to a top executive of global transaction advisory firm Alvarez & Marsal (A&M).
“If you're buying into a company with a better ESG footprint, the market’s going to put a greater premium on that when you go to exit... I have clients who in their post-transaction value creation blueprint require ESG as part of that," said Paul Aversano, managing director and global practice leader of A&M’s global transaction advisory group, told Mint in an interaction during his recent visit to India.
Aversano co-founded and leads the firm’s global transaction services group, US corporate M&A (mergers and acquisitions) transactions group and the US ESG business. “85-90% of the financial buyers said they were willing to pay more for a company that had an improved ESG footprint.
Doing well financially as a business, is also not mutually exclusive to doing well in other areas," he added. Also read | Small investments surge as new wave of angel investors enters startup scene, seeking lucrative returns Investors are increasing their focus on value creation before committing to an asset, particularly in markets like India where deals are happening at higher valuations.
In addition to traditional strategies like management changes and bolt-on acquisitions to drive post-investment business growth, investors are increasingly prioritizing ESG and digital transformation in legacy businesses, added Aversano. “It’s almost like because you’re coming in at such high multiples, what are the things
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