RiskHorizon, created by Anthesis, facilitates early screening across a range of legacy and future ESG risk scenarios to model the risk and opportunity landscape in the transaction, so that they can be subsequently evaluated during due diligence. It is a ground-breaking, cost-effective, web-based tool spanning millions of data points from more than 175 countries, covering 30+ global risks (Economic, Environmental, Technical, Social, Geo-Political).
It is considered best practice for private equity and other finance sector organisations to conduct high-level environmental, social and governance (ESG) screens of all new investments.
Screening can reveal potentially critical findings and is recommended to be undertaken as early as possible in the deal origination or due diligence processes, in order to allow for identified issues to be challenged further and in-depth prior to making an investment decision.
But the screening process can be complex and time-consuming, with many firms faced by challenges such as the geographic scale of the target organisation, its business activities and volume of opportunities requiring assessment.
Anthesis supports clients in undertaking screening assessments by blending our own in-depth experience of the likely key issues associated with particular industries, process and geographies, with the use of our propriety software tool, RiskHorizon. We screen the commercial and financial implications of sustainability, social and goverance factors in any investment process.
Our advice can be delivered in traditional report form or displayed via RiskHorizon’s online dashboard that provides users with:
- The ability to identify potential ESG risk exposure via two pathways: industrial sector and geographical region.
- A graphical display of potential ESG risk areas to help define the technical scope of the diligence effort and ensure that the proper advisors are retained.
- Built-in and customisable questions to further evaluate materiality of each risk within the context of the target acquisition. Actual risk levels can be adjusted based upon measures and management systems the target has in place to manage their exposure.
- Executive summary input screen to prioritise findings, make recommendations and call out next steps including free-form text fields to summarise professional opinions.
- Flexible reporting that enables both on-line review and hard-copy printing.
Our screening services can also be combined with traditional transactional environmental due diligence assessments and post-acquisition tailored ESG reviews.
Anthesis has significant experience of evaluating ESG issues within assets or portfolio companies post-acquisition.
Such “Portfolio Company ESG Reviews” typically involve Anthesis first reviewing disclosed materials to develop a baseline understanding of the likely material issues within the company, then holding workshops with the management team to challenge our assumptions and work towards defining a final list of key issues that require management.
Some of these will typically be set as formal key performance indicators, with clear action items or targets for improvement.
We wanted the ESG screen as we were keen to understand the definition of ESG and to see the criteria you would be using. We were also interested to see how others would view us through this lens. The Anthesis screen provided us a with a “mirror”. The value to Neste was that it confirmed we are on a right track to addressing ESG issues. It also helped us to identify some potential improvement opportunities, several of which we are working on, and others that warrant further evaluation.
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