Environmental Due Diligence

What environmental due diligence is

Environmental due diligence is the audit process that assesses the environmental risks and liabilities associated with a site, installation or company, usually in the context of a sale, merger, acquisition or financing transaction. Its aim is to identify existing contamination, regulatory breaches, pending permits or future environmental risks that could affect the asset's value or create liabilities for the buyer or financier.

When it is needed

• Purchase of industrial land with prior activity, where undeclared historical soil contamination may exist.
• Acquisition of renewable-energy projects under development or already operating, verifying the real status of environmental processing and compliance with the conditions of the Environmental Impact Statement (DIA).
• Financing transactions where the bank or fund requires verification of the asset's environmental risks before granting the loan.
• Corporate mergers and acquisitions where the buyer needs to know the target company's environmental liabilities before closing.
• Transfer of industrial installations subject to integrated environmental authorisation, where the validity of and compliance with the authorised conditions must be verified.

What environmental due diligence analyses

1. Documentary review of all the asset's or company's permits, licences, reports and environmental files.
2. Verification of regulatory compliance with the conditions set out in environmental permits, the DIA or activity licences.
3. Contaminated soil investigation where there is a history of industrial activity or a risk of historical contamination, under Spanish Royal Decree 9/2005.
4. Identification of environmental liabilities: pending penalties, open enforcement proceedings, unresolved requirements from the authority.
5. Assessment of future risks: outstanding restoration, decommissioning or remediation obligations.
6. Due diligence report quantifying the environmental risk with recommendations for the transaction.

Levels of environmental due diligence

• Phase I: documentary review and site visit, without sampling, to identify potential risks.
• Phase II: when Phase I detects signs of contamination, field investigation is carried out with soil and/or groundwater sampling to confirm and quantify the effect.

Why choose Ideas Medioambientales

We carry out environmental due diligence for sale, financing and M&A transactions across the whole of Spain, with particular experience in renewable-energy projects and industrial installations, verifying both regulatory compliance and the risk of historical soil contamination. Our in-house multidisciplinary team, with more than 25 years of experience and ISO 9001, 14001 and 45001 certification, works across the whole of Spain from our offices in Albacete and Madrid.

Tell us the type of transaction and the asset to be assessed and we will tell you which level of due diligence you need and how quickly we can deliver it.