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EHS Techniques has advised a well-known Project Management firm in conjunction with an investment fund to perform the due diligence audit of the environmental liabilities that this acquisition could generate. In addition, an environmental taxonomy compliance and major adverse impact (PAI) analysis was performed, which included modeling with the CRREM model of the decarbonization of the facilities over the long term.
Project scope
The EDD and ESG audit covered the following areas:
- Identification and assessment of potential soil, groundwater, and waste-related liabilities.
- Review of environmental documentation, historical site use, and permits.
- Evaluation of compliance with environmental and sustainability regulations applicable to residential assets.
- Analysis of energy performance and carbon intensity, both current and projected.
- Alignment with EU Taxonomy requirements and assessment of Principal Adverse Impacts (PAIs).
- Scenario-based decarbonization modeling using CRREM pathways.
Methodology
EHS Techniques applied an integrated audit methodology combining environmental, social, and governance criteria with technical due diligence best practices:
- Document review and site inspection
- Examination of existing permits, environmental reports, and building documentation.
- On-site verification of environmental conditions, waste management systems, and potential contamination sources.
- Regulatory and ESG compliance analysis
- Evaluation of compliance with Spanish environmental regulations, as well as EU sustainability frameworks (EU Taxonomy, SFDR, and PAI indicators).
- Assessment of governance aspects relevant to the asset’s management and risk profile.
- Decarbonization and transition risk modeling (CRREM)
- Application of the CRREM model to evaluate the carbon performance of the residential complex against decarbonization pathways for the real estate sector.
- Identification of retrofit opportunities and investment needs to align with Net Zero objectives.
Results and benefits
The audit provided the client with:
- A comprehensive environmental risk profile, allowing for informed investment decisions.
- Verification of ESG compliance, supporting the fund’s sustainability reporting obligations.
- Quantification of the asset’s decarbonization potential and exposure to transition risks.
- Technical recommendations to enhance environmental performance and alignment with EU sustainable finance requirements.
- A robust, data-backed report used to support both the acquisition process and financial structuring.
Closing statement
Through this project, EHS Techniques demonstrated its ability to integrate ESG, EDD, and decarbonization analysis into a single, cohesive assessment framework.
Our audits enable investors and developers to evaluate environmental risks, strengthen sustainability performance, and ensure compliance with evolving European ESG standards.