WTW-管理并购中的环境风险（英）-2023-12页_2mb

报告摘要

Summary of Environmental Risks in Mergers and Acquisitions

Environmental Risks in M&A

Environmental risks are liabilities that can be transferred with assets in M&A transactions. These risks include pollution sources, pathways, and receptors, and can derailer deals if not properly allocated. Environmental insurance helps transfer risks, addressing issues like ESG requirements and regulatory liabilities.

Types of Environmental Risks

Common risks include:

Air pollution (emissions or sudden releases)
Odor issues from statutory nuisances
Dust from contaminated soil
Biodiversity damage from pollution or indirect impacts
Historic pollution from legacy sites
Soil and surface water pollution

Impact on M&A Deals

Environmental liabilities can affect warranties, indemnities, and deal completion. Buyers face unknown risks and costs, while sellers seek to pass on liabilities for a clean exit. The polluter pays principle often applies.

Environmental Impairment Insurance (EIL)

EIL covers both known and unknown pollution and biodiversity risks. Benefits:

For buyers: Reduces escrow needs, caps liabilities, improves bidding position.
For sellers: Increases net proceeds, simplifies risk transfer, enhances asset liquidity.

Coverage and How It Works

EIL fills gaps in W&I policies, covering gradual and sudden pollution, statutory clean-ups, and third-party liabilities. Policies can last up to 10 years and cover individual sites or entire businesses.

Common Misconceptions

Cost: Premiums are falling due to competition.
Coverage Gaps: Insures against large exposures not covered elsewhere.
Risk Perception: Unknown risks can lead to deal complications.
Regulations: Compliance is tightening with ESG demands.

EIL and ESG Challenges

EIL helps reduce environmental impacts, improve ESG ratings, and meet reporting requirements by covering climate-related damage and biodiversity loss.

Environmental Due Diligence

Key questions to assess risks include site management, historical assessments, known conditions, monitoring, remediation, regulatory status, insurance, and future use plans. PFAS exclusions in policies are noted.

Case Studies

Global private equity deal: EIL structured for polymer facility pollution coverage.
UK pharmaceutical acquisition: EIL facilitated deal by providing insurance availability.
Eastern European industrial facility: Long-term EIL policy covered historic and ongoing pollution.