Environmental due diligence—asset purchase
Produced in partnership with ELM Law
Environmental due diligence—asset purchase

The following Environment guidance note Produced in partnership with ELM Law provides comprehensive and up to date legal information covering:

  • Environmental due diligence—asset purchase
  • The purpose of environmental due diligence
  • The scope of environmental due diligence
  • Legal due diligence
  • Technical due diligence
  • Environmental desktop reports
  • More detailed environmental investigations
  • Appointing environmental consultants
  • Contaminated land liability considerations in asset purchases
  • Transfer of environmental permits
  • more

The purpose of environmental due diligence

The purpose of environmental due diligence is to:

  1. assess the risk of inheriting any contaminated land liabilities associated with properties being transferred to the buyer

  2. find out if any environmental permits need to be transferred to the buyer, or if new permits need to be applied for

  3. identify material non-compliance with environmental law or permits or capital expenditure requirements that the buyer may become responsible for, and

  4. provide recommendations to help mitigate these risks as far as possible through further investigations, price negotiations, contractual protections or environmental insurance

For a more general discussion of due diligence, see Practice Note: Due diligence—share and asset purchases.

The scope of environmental due diligence

Environmental and health and safety (EHS) matters are usually investigated together for the following reasons:

  1. many issues such as the duty to manage asbestos and exposure to chemicals are both health and safety concerns as well as an environmental issues, and

  2. environmental managers will often be responsible for safety, health, environmental and quality issues

Legal due diligence

Depending on the size and type of business, solicitors acting for a buyer will typically need to do the following tasks with respect to EHS issues:

  1. check the information memorandum (if produced) and company website to get background information on the business being sold

  2. review