Integrating Sustainability Aspects into the M&A Process (PDF)

Master's Thesis from the year 2020 in the subject Business economics - Business Management, Corporate Governance, grade: 2.0, University of Münster, language: English, abstract: The present expert interview-based, qualitative analysis is motivated by the foregoing considerations and seeks to investigate: how companies use non-financial sustainability information in M&A to contribute to transaction success and how sustainability management is ensured in the acquired entity after the transaction. A particular focus shall be placed on the post-merger integration of sustainability controlling. The following chapter 2 explains terms and concepts relating to sustainability, sustainability controlling and the M&A process. Chapter 3 discusses the relevant research findings on the CSR business case and the CSR research in M&A. Subsequently, it identifies the research gap and derives the research questions. Chapter 4 answers the research questions by evaluating and discussing the results of the underlying expert interviews and derives implications for research and practice. Finally, chapter 5 concludes by depicting the key insights of the analysis.

Corporate Social Responsibility (CSR) has gained momentum in the last two decades as media reports on climate change, inhumane working conditions and environmental scandals have prompted the need to consider ecological and social perspectives when conducting business. One such example is the GREENPEACE campaign against NESTLÉ. NESTLÉ was accused of using palm oil in its KitKat production from the Indonesian palm oil supplier SINAR MAS which is known for rainforest clearing and the subsequent destruction of wildlife habitats. In light of the increasing disclosure requirements and scrutiny of corporate activity by various stakeholders, companies are being challenged to implement ecological and social concerns into their operations, i.e. sustainability management in order to secure the societal acceptance of the business, the so-called license to operate.

The need for sustainability management and the inherent sustainability controlling is further emphasised by the extensively researched CSR business case, i.e. the link between CSR and firm's financial performance. A large body of researchers and practitioners acknowledge the value-enhancing capabilities of CSR, e.g. improvement of operating efficiency or positive impact on market returns. However, to unlock the full value-adding potential of CSR, systematic controlling is required to identify strategic value drivers, derive appropriate activities and implement instruments for measuring the impact of the activities.