Deal advisory: M&A execution with ESG integration and financial rigour

How ESG is changing M&A valuation in Australia

ESG factors now directly influence deal outcomes in three ways: due diligence (buyers require assessment of climate risk, stranded asset exposure, and regulatory compliance as standard), valuation (ESG credentials affect earnings quality, risk discount rates, and terminal value assumptions), and deal structure (sustainability-linked earn-outs, deferred consideration tied to ESG milestones, and representations and warranties around climate disclosures are becoming common).

ESG preparation as a transaction prerequisite

For sell-side mandates, ESG preparation has become a prerequisite for maximising exit valuation. For buy-side mandates, ESG due diligence is now a baseline requirement from institutional capital providers and lenders.

Where we are different from traditional deal advisers

Most transactions are advised by one of three types of firm — and each leaves a gap. Investment banks bring process and access, but ESG is often a light overlay or outsourced, disconnected from the numbers that drive price. Large transaction-services practices bring financial due diligence depth, but ESG diligence typically sits in a separate team and arrives as a standalone report that never translates into valuation or deal structure. Sustainability consultants bring ESG depth, but without the corporate finance capability to convert findings into earnings, multiples or terms.

Lever Impact closes that gap. ESG and financial due diligence are run by one integrated team, led by chartered accountants with corporate finance experience. That means ESG findings are immediately translated into valuation adjustments, deal-structure implications and investment-case narratives — not parked in a separate sustainability appendix. For our clients, this is the difference between knowing a target has a climate exposure and knowing exactly what it does to the price, the structure and the return.

Deep sector experience, on both sides of the deal

Good deal advice is sector advice. We bring hands-on transaction experience across the sectors shaping the Australian market:

• Consumer goods and retail
• Manufacturing and industrials
• Agribusiness and food
• Technology and growth-stage businesses
• Infrastructure, energy transition and digital infrastructure

Across these sectors we work both buy-side and sell-side, which means we understand how the other side thinks. On a sell-side mandate, we prepare a business the way a sophisticated buyer will interrogate it. On a buy-side mandate, we know where vendors smooth the story. That two-sided perspective — combined with experience spanning pre-revenue growth companies through to institutional infrastructure — is what lets us anticipate issues before they become price-eroding surprises.

ESG due diligence for business resilience, not just risk

ESG due diligence is too often framed narrowly as downside risk-spotting. Done properly, it is a resilience and value lens. We assess how a target's sustainability profile affects the durability of its earnings and its enterprise value over the investment horizon:

• Earnings quality and durability — does the business carry hidden carbon-cost, regulatory or supply-chain exposure that will erode margin as the transition accelerates?
• Regulatory resilience — is the target ready for AASB S2, NGER and Safeguard obligations, or does it carry unpriced compliance liabilities?
• Customer and capital resilience — will the business hold its customer contracts and access to finance as buyers and lenders decarbonise their requirements?
• Upside and positioning — where do credible ESG credentials support a valuation premium, a wider buyer pool, or a stronger investment case?

Lever Impact's deal advisory services

• Buy-side advisory — acquisition identification, ESG and financial due diligence, valuation, and negotiation support
• Sell-side advisory — transaction readiness, ESG narrative development, information memorandum, and buyer engagement
• ESG due diligence — climate risk assessment, GHG data verification, regulatory compliance review, and transition plan evaluation
• Financial modelling — scenario-based financial models integrating ESG factors into valuation, returns analysis, and sensitivity testing
• Investment case development — connecting ESG credentials to valuation premium and strategic rationale for institutional buyers
• Corporate development strategy — portfolio optimisation, strategic adjacencies, and acquisition pipeline development

Financial rigour: the foundation under every deal

What ties this together is financial rigour. Every ESG insight we surface is run back through the same financial framework a board, an auditor and an investment committee use — earnings quality, discount rates, terminal value, sensitivity, deal structure. As chartered accountants, we treat ESG-adjusted earnings and climate-related liabilities with the same discipline as any other line in the model. That is why our diligence stands up in the data room and our valuation positions stand up in negotiation.

One firm, connected across the deal lifecycle

Deal advisory rarely sits in isolation. Because Lever Impact also delivers sustainability reporting, GHG accounting, energy transition planning, and CFO services — and through Lever Impact Capital, for wholesale clients, capital advisory — we can support the whole arc of a transaction: AASB S2 and ESG readiness before a sale, integrated diligence and financing during, and value creation and reporting after. Clients get one connected team rather than a chain of disconnected advisers.