Transaction Diligence

The Challenge

Transaction diligence typically focuses on direct operations, disclosed assets and readily available company information. This may overlook potentially material vulnerabilities embedded in raw material supply chains several tiers upstream.

Within transaction timelines, credit and investment teams need a focused way to determine whether environmental exposure could affect procurement costs, operational continuity, revenue exposure, and repayment capacity, and what additional questions or protections may be required.

Our Approach

Natcap integrates granular asset- and commodity-level analysis into transaction diligence, focusing on nature-dependent raw materials and production regions.

For each relevant raw material and production region, we assess:

Likelihood of occurrence or disruption: Evaluating vulnerability using dependency data, state-of-nature datasets and environmental hazard indicators.
Potential financial consequence: Assessing the relative magnitude of the expected shock and how market dynamics and business exposure may influence its financial consequences.

Prioritise Environmental Risks Identify the sectors, activities, raw materials and commodities most relevant to the transaction and prioritise environmental risks based on business impact across their value chains.

Map Material Inputs Map material inputs to likely production and sourcing regions

Assess Location-Specific Hazards Assess location-specific environmental hazards and potential financial transmission channels

Quantify the Cost of Inaction Quantify the cost of inaction and validate assumptions and estimates using robust and defensible science-based methodologies.

Develop Plausible Scenarios Develop plausible scenarios quantifying how environmental risks create cascading business impacts.

Build Robust Business Cases Build robust business cases that support investment and strategic decision-making.

Produce a Focused Diligence Pack Produce a focused diligence pack with priority findings, supporting evidence and decision-relevant questions

TOUCH

Portfolio Risk Management

Identify material environmental risk across lending and investment portfolios.

Why Natcap

Environmental intelligence built for better business decisions.

Granular Asset- and Commodity-Level Insight

Look beyond company-level information to understand which assets, raw materials and production regions are driving exposure.

Integrated, Timely Diligence

Add targeted environmental risk analysis to existing diligence activities and receive focused findings that support transaction timelines.

Financially Relevant Outputs

Identify where vulnerabilities may be financially material and what diligence questions, transaction protections, engagement priorities or risk-reduction actions should be considered.