The meaning of a legal environmental due diligence can be summarized in the set of interventions aimed at investigating the activities carried out by a business in terms of environmental impacts, in order to assess the company’s economic value on the one hand, and on the other hand to initiate a dynamic process of continuous improvement.

The former, by definition, relate to the entire process of productive activities performed by the interested company, whereas the latter concern certain specific aspects of the company’s activities and are aimed at focusing on some critical issues clearly identified a priori (think, for example, about the proper waste management procedures, the updating or improvement of the company’s organizational models, the identification of the applicable requirements).

The investigation activity can be commissioned by the potential seller or the buyer (respectively vendor side due diligence and buyer side due diligence), or -occasionally- by both parties.

The activity of legal due diligence, often preceded by a letter of intent (LOI), is related to operations such as: purchase and sale of shares, rents and sales of companies and business units, mergers and divisions, transformations and liquididations, access to bankruptcy procedures (for the concrete verification of the possibilities of satisfying the different classes of creditors), participation in public tenders, provision of financing and judicial and extra-judicial litigation for the quantification of damages.

Before preparing any activity, the parties sign a confidentiality clause (letter of confidentiality), by which they undertake not to disclose the confidential information collected.

In extraordinary corporate acquisitions procedures, environmental compliance profiles represent a significant value, because they enable the identification of the potential risks and costs associated with current and past activities, which may represent a potential impact on the environment, as well as resulting in environmental offences.

Considering the objective fact that environmental law is marked by extremely technical notions, environmental legal due diligence, by its own nature, will require appropriate and site-specific investigations and assessments (for example, in the acquisition of an industrial area, it will be essential to analyze any historical contamination and the related costs of reclamation, or restoration of the area).

The analysis of environmental risks are considered as real voluntary environmental quality certification voluntary procedures of the company, thus increasing its value.

The due diligences are not prepared with sacred formulas, not even with pre-established sequences, but the professionals of our Law Firm prefer to scan the requested investigation in distinct phases:

– Inspection of the client company;

– Assignment of the different tasks and signing of related agreements (e.g. -confidentiality clause, L.O.I. and memorandum of understanding);

– Historical retrieval of basic information concerning the legal entity to be analysed (company name, turnover, employees, possible bank exposures, company structure, etc…);

– Analytical retrieval of documentation relating to the legal situation to be analysed -identification of the scope of weork of the due diligence, the requested level of in-depth analysis and the timing;

– Drafting of an interim report including monitoring and sampling with pedisseque interpretations;

– Observations on behalf of the client;

– Final report