During the process for an M&A or other such transaction, the prospective buyer normally verifies the seller’s corporate value and checks for any “red flags” (a serious problem that would terminate consideration of the M&A).
This is referred to as “due diligence.” Due diligence is usually concerned with legal matters, financial/tax matters, and business. However, when a target company comes with high environmental risk, such as a company in manufacturing, assessing the deal from an environmental perspective through environmental due diligence is essential.