During the sixth Brownbag of the season, our colleague Silvia introduced us to a subject of great topicality and interest: Environmental Due Diligence.
What is it?
Environmental Due Diligence is the array of activities to be performed before acquiring an asset with the aim of identifying environmental liabilities and risks. It is conducted to identify:
- compliance with the requirements of environmental legislation and identification of any legislative non-compliance;
- presence and management of hazardous substances and petroleum products on the site, as well as associated potential risks and liabilities;
- releases or threatened releases of hazardous substances;
- environmental conditions at the property, including conditions of buildings and environmental media (soil, ground water, surface water, etc.);
- historical, current, and potential future cleanup actions on the property.
Why is it important?
Acquiring an environmentally impaired site can have tremendous economical, legal, and reputational implications for companies. That’s why nowadays environmental due diligence is becoming a key tool to support real estate transactions and corporate acquisitions.
Environmental Due Diligence is conducted with two main objectives:
- making buyers aware of legal responsibilities related to the environmental issues of the property they are going to acquire. Furthermore, clients must be aware of every kind of obligation they should face (remediation obligations, adaptation of plants to environmental legislation, limitations to the use of the area, etc.);
- estimation of the costs related to environmental liabilities management and restoration, with the aim of obtaining the best investment value for a property and structuring the acquisition on the assessment results.
Environmental Due Diligence operating procedures
Environmental Due Diligence is conducted through two different stages:
- Phase I: investigates the current and historical uses of a property to identify potential environmental risks. This step encompasses on-site investigation, desk study and document analysis;
- Phase II: based on Phase I results, is conducted to further investigate the potential presence of hazardous products on a property and any contamination extent. Moreover, this step aims to detect other environmental issues like non-compliant discharges, wastes disposal, underground storage tanks, etc.
Our commitment to clients
A full Environmental Due Diligence process encompasses all the aspects related to environmental issues. Our team is made up of different professional figures skilled in carrying out extensive Environmental Due Diligence investigations. Our focus is to evaluate any relevant aspect involved in real estate transactions and corporate acquisitions, in order to make our clients aware of the property’s actual environmental conditions.
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