The Role of ESG in Driving M&A Activity in the Energy Sector

Embracing a Sustainable Future

Governments worldwide are intensifying their efforts to decarbonise their economies, sparking a surge in merger and acquisition activity within the ESG (Environmental, Social, and Governance) data, software, and analytics domain.

This transformative wave is not only reshaping the landscape of business and consumer services but is also profoundly impacting the energy sector. As organisations embark on their decarbonisation journeys, the need for advisory services in crafting effective strategies becomes paramount.

ESG Takes Centre Stage

ESG has emerged as the predominant theme driving deals in both business and consumer services and the energy sectors. Companies, eager to align with sustainability goals, are seeking expertise in navigating the complexities of ESG considerations.

This heightened focus on environmental, social, and governance factors is reshaping the business landscape and creating new opportunities for growth.

Strategic Interest in ESG

The ESG sector is drawing significant attention from both strategic and private equity acquirers. The allure lies in the potential for innovation and impact on a global scale.

Notably, carbon and emissions technologies are gaining traction, attracting substantial investments from venture capital firms.

A prime example is Muir AI, a Seattle-based startup leveraging AI technology to reduce emissions within corporations’ supply chains, which recently secured $3.25 million in a seed funding round led by Base10 Partners.

Maturing Energy Data, Software, and Analytics Sector

The energy data, software, and analytics sector are undergoing a phase of maturity characterised by strategic acquisitions and partnerships. In 2023, leading energy Software as a Service (SaaS) providers, like ESG, made significant moves, signalling a paradigm shift in leveraging technology for sustainable growth.

  • ESG’s Strategic Acquisition: ESG announced its acquisition of Pandell, a cutting-edge software platform designed for the energy sector. This move underscores the commitment of ESG in providing comprehensive solutions to support energy leaders in navigating the dynamic global energy landscape.
  • BIP’s Forward-Thinking Approach: Multinational consultancy firm BIP demonstrated its commitment to sustainability by acquiring Vero, an award-winning energy management company specializing in zero-carbon solutions. This acquisition exemplifies the collective effort to usher in a new era of sustainable practices within the energy sector.

A Glimpse into the Future

As the energy sector continues its maturation process, the forecast for 2024 is promising. Large-scale deals are expected to be a driving force behind sustainable growth, mirroring the ongoing convergence of technology and energy.

Industry leaders are poised to adopt a strategic approach, seeking partnerships and acquisitions that align with their visions for a more sustainable and digitally empowered future.

In this era of transformative change, businesses and investors alike have a unique opportunity to contribute to a greener, more sustainable world. The fusion of ESG considerations with technological innovation is reshaping industries, and those at the forefront of this movement are set to redefine the future of the energy sector.

Book a Consultation with Us

Ready to unlock the full potential of your business through a strategic sales process? Our team of seasoned M&A advisors is here to guide you on this transformative journey. Whether you’re considering selling your business or exploring strategic opportunities, now is the time to take the next step.

Schedule a confidential consultation with our experts today to discuss your unique objectives, understand the market landscape, and chart a course towards a successful sales process. Seize this opportunity to navigate the complexities of M&A with confidence. Book your consultation now.

Author: William Berrington


William is a highly experienced M&A advisor with a particular emphasis on ESG and HR Technology globally. His previous assignments include working with leading businesses in ESG (Environmental, Social and Governance) software and data and HR Technology (HR Tech).

William has previously advised on Technology sector M&A transactions in more than 12 countries, working on transactions on the sell-side and buy-side. He was a Chartered Accountant and before Goldenhill and worked in several corporate development roles for blue chip technology companies and also for a private markets firm.

If you are an owner or senior executive of a Technology business interested to discuss how M&A could help you accomplish your objectives – please get in touch with William below.