DD report - Biodiversity Section
The biodiversity section of the DD (due diligence) report focuses on compliance, risks, opportunities, and financial impact, helping investors or acquirers quickly understand the target company’s environmental risk exposure.
Core Value
1. Reduce natural assets and ecological compliance risks.
2. Enhance investment and financing capabilities and market recognition.
3. Strengthen supply chain competitiveness and international trade access
4. Support corporate sustainability strategies and resource security
5. Enhance brand image and stakeholder trust
SUSTECH 提供的服务
DD Report – Biodiversity Section (Example Framework)
SUSTECH was developed following a framework:
1. Policy and Compliance
- Whether the enterprise is located within ecological protection red lines, nature reserves, wetlands or other sensitive areas.
- Does it involve legal proceedings, fines, or compliance risks related to biodiversity?
- Local and industry-specific laws and regulations (e.g., ecological red lines, land use control, species protection regulations).
2. Firm Dependence and Impact
rely:
- Does the company rely on natural ecosystem services (such as water, pollination, soil quality, and forest products)?
Influence:
- Land use (occupancy/fragmentation)
- Pollution emissions (to water bodies, soil, and air)
- Key species and habitat impacts (risks of endangered flora and fauna)
- Potential indirect impacts of the supply chain
3. Risk Identification
Physical risks:
- Ecological degradation leads to resource supply disruption
- Soil degradation and water depletion
Policy and regulatory risks:
- New regulations (restrictions on protected areas, restrictions on resource use) and ecological compensation or restoration responsibilities.
Reputational risk:
- Negative incidents exposed by NGOs or the media
- Sustainability requirements for investors and clients
Market risks:
- International market access barriers (such as EU CSRD and TNFD disclosure requirements).
4. Opportunities and Potential Value
- Implement ecological restoration and nature-based solutions (NbS) to enhance the company’s green competitiveness.
- Brand reputation and market recognition have improved.
- Gain additional benefits through carbon sinks or biodiversity credits.
- Obtain green financial support (green bonds, sustainable loans).
5. Current Status of Management and Governance
- Whether biodiversity-related management systems or accountability mechanisms have been established.
- Has an ecological impact assessment or environmental impact assessment (EIA) been conducted?
- Have you published ESG or sustainability reports and disclosed biodiversity information (GRI 304, TNFD)?
6. Investment and Improvement Needs
- Identify the necessary remedial or improvement measures (ecological restoration, pollution control, alternatives).
- Estimate the relevant capital expenditures (CapEx) and operating expenditures (OpEx).
- The assessment may affect the valuation, transaction terms, or post-merger integration.
SUSTECH
SUSTECH is an innovative technology service company with artificial intelligence, big data, and blockchain at its core. We specialize in ESG (Environmental, Social, and Governance) testing, certification, and compliance management, helping companies achieve their sustainable development goals. Through digital and intelligent means, we are redefining the testing and certification industry, making ESG compliance more transparent, efficient, and credible.
Core Advantage: Technology-enabled ESG Compliance
Intelligent ESG Data Acquisition and Analysis
- IoT Environmental Monitoring: Real-time collection of data on enterprise carbon emissions, wastewater discharge, energy consumption, etc., and automatic generation of ESG reports.
- AI carbon footprint calculation: Based on supply chain data, it accurately calculates the carbon footprint of a product throughout its entire lifecycle, in accordance with international standards such as ISO 14064 and GHG Protocol.
ESG Certification and Rating Optimization
- Automated compliance checks: AI compares data against global ESG standards (such as GRI, SASB, TCFD) to identify ESG risks for enterprises and provide improvement suggestions.
- ESG Rating Enhancement Solution: Combining industry best practices, we develop actionable ESG optimization strategies to help companies improve their ESG ratings from MSCI, S&P, and other ranking bodies.
Blockchain-based Evidence Storage and Transparent Traceability
- Tamper-proof ESG reports: All test data is stored on the blockchain to ensure traceability and auditability, enhancing the trust of investors and regulators.
- Supply chain ESG penetration management: Tracking supplier ESG performance to ensure compliance with the requirements of major international manufacturers.
