What is Environmental Due Diligence?
Environmental due diligence is the process of assessing and reporting on the environmental conditions of a property in connection with an acquisition. It ensures parties are aware of the potential environmental liabilities, mitigation requirements, and possible costs associated with any risk.
What environmental risks are present?
Environmental due diligence (EDD) can cover many risks. Some of the key areas include:
- Contaminated land as a result of the site’s history or operations,
- The physical setting and construction details in relation to climate induced flooding events,
- The sustainability of the site, including energy requirements, overheating risk, and drainage systems,
- Ecological implications associated with protected species, habitats, or the presence of invasive plants such as Japanese knotweed,
- Operational aspects such as business performance and compliance with environmental standards.
Each area of EDD is supported through desk-based assessments and site inspections from relevant specialists. This information then allows both buyers and sellers to make informed decisions about risks before a transaction is completed.
Contaminated land
Historically, the key environmental concern for due diligence has been contaminated land. Information is obtained and summarised within a Phase 1 Contaminated Land Assessment, which involves a site inspection conducted by a qualified contaminated land specialist. The process identifies contamination related to historical land uses and current site operations that may pose current or future risk.
Flood risk
Flood risk has moved up the agenda recently, and with some insurers now refusing to insure commercial properties in high risk areas, it is very important to get a clear picture of the implications before completing a transaction. A Flood Risk Assessment evaluates this, and considers all types of flooding; the four most common of which are groundwater, surface water, river and tidal.
Flood data is compared with a detailed site survey from an experienced flood professional where information about the building structure and ingress points for water are reviewed. Details including door thresholds, air vents, cellars, plant rooms and incoming services are recorded as well as other considerations in warehousing units such as the location of stock and materials. The potential to escape from the site in the event of flooding is reviewed as well as business continuity plans and any existing mitigation measures in place reviewed for their effectiveness.
Sustainable drainage
A newer consideration for due diligence is the presence of sustainable drainage on site. Sustainable drainage systems (known as SuDS) are key to managing surface water and reducing the impact of flooding in urban areas. They are increasingly common in newer properties as the inclusion of SuDS is often mandatory in planning applications. Where a site is being acquired, it is important to understand existing drainage and the financial implications of any necessary upgrades.
GeoSmart’s environmental information supports early intervention and is the foundation for successful and sustainable development. We deliver innovation and expertise in environmental data and intelligence services to support property professionals, local authorities, lenders, insurers and asset managers.
Get in touch with GeoSmart
To find out more, please contact:
Martin Lucass, Commercial Director
07494 852 498
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