Environmental, governance issues rise on global corporate agenda

2020 World Economic Forum in Davos
CAPE TOWN – Environmental, social and governance (ESG) matters rapidly rose up the global corporate agenda in 2019 and have become mainstream in all areas of corporate activity, including in mergers and acquisitions (M&A).

A new report by international law firm Herbert Smith Freehills titled M&A in 2020 also found that many governments were tightening controls on foreign direct investment (FDI).

The report said legislations tightening FDI regimes were expected to come into effect in the US, Japan, European Union and the UK, in 2020, as governments try to preserve their country’s position in global value chains, as well as protect their own, widening definitions of national security.

Last year also saw a return, both through increase volume and in size of transactions, of private equity and infrastructure funds teaming up in consortium or club deals, to boost their financial firepower, while sharing potential upside and risks.

There was also a return of financial buyers to the public arena, this after several years where M&A in this type of transaction had reduced steadily.

Source: iol.co.za