Environmental Due Diligence

We ensure effective communication of environmental risks to stakeholders by: 

• Tailoring reports to the target audience, using clear and concise language that is easily understood by non-technical stakeholders. 
• Providing executive summaries that highlight key findings, risks, and recommendations.

 

• Using visual aids, such as maps, photographs, and tables, to present information in a more accessible and engaging format. 
• Conducting meetings or presentations to discuss the findings and address stakeholders’ concerns or questions. 
• Offering guidance on next steps, including recommendations for further investigation, remediation, or risk mitigation strategies. 
• Maintaining open lines of communication throughout the due diligence process to ensure stakeholders are informed and involved in decision-making. 

Environmental due diligence is typically conducted for commercial and industrial properties, as these properties have a higher likelihood of environmental contamination due to their historical or current use. However, environmental due diligence may also be necessary for residential properties, particularly if they are located in areas with known environmental issues or if they have a history of non-residential use. Properties that commonly require environmental due diligence include:

• Industrial sites
• Manufacturing facilities
• Warehouses and storage facilities
• Gas stations and automotive repair shops
• Dry cleaners
• Agricultural properties
• Brownfield sites (previously developed properties with potential contamination)

Environmental due diligence provides valuable information about the property’s environmental condition and potential liabilities. This information can be used to negotiate favourable transaction terms, such as:

Price adjustments

If significant environmental issues are identified, the buyer may negotiate a lower purchase price to account for the estimated remediation costs.

Indemnification provisions

The buyer may seek indemnification from the seller for identified environmental liabilities, protecting them from future costs and legal responsibilities.

Escrow accounts

Funds may be set aside in escrow to cover potential environmental remediation costs, ensuring that the buyer is not solely responsible for these expenses.

Contingency clauses

The transaction agreement may include contingency clauses that allow the buyer to terminate the deal or renegotiate terms if significant environmental issues are discovered during due diligence.

Phase II confirmation sampling is necessary when the Phase I Environmental Site Assessment (ESA) identifies potential contamination issues or recognises environmental conditions (RECs) that require further investigation. Phase II involves the collection and analysis of soil, groundwater, or building material samples to confirm the presence, nature, and extent of contamination. This helps in quantifying the environmental risks and determining the need for remediation or mitigation measures.

A Phase I Environmental Site Assessment (ESA) typically includes the following key components: 

Historical records review

Examining the property’s history of ownership, use, and development. 

Regulatory database checks

Searching federal, state, and local databases for records of environmental incidents, permits, and violations associated with the property. 

Site reconnaissance

Conducting a physical inspection of the property to identify potential environmental concerns, such as storage tanks, stained soils, or hazardous material storage. 

Interviews

Gathering information from current and past owners, occupants, and local government officials about the property’s environmental history and current conditions. 

Report preparation

Compiling the findings and providing an assessment of the property’s environmental condition, identified risks, and recommendations for further action, if necessary. 

Environmental due diligence is conducted to identify and assess potential environmental risks and liabilities associated with a property prior to a transaction. It helps buyers, sellers, and investors make informed decisions by understanding the environmental condition of the property, potential contamination issues, regulatory compliance status, and estimated costs for remediation or mitigation.