As energy companies expand their renewable portfolios, acquisitions often come with hidden social, environmental, and ethical risks. A leading global energy provider recently sought Ksapa’s expertise to conduct a Duty of Vigilance due diligence process for the acquisition of hydroelectric assets.Contact us for tailored support!

Context : Rising Expectations on Vigilance and ESG

France’s Duty of Vigilance Law (2017) requires large companies to identify, prevent, and mitigate risks to human rights, labor, and the environment throughout their supply chains and global operations.

In parallel, renewable energy companies face intense scrutiny. While hydroelectric plants are key to decarbonization, they can raise concerns around land ownership, community displacement, and supply chain practices. Failure to address these issues may lead to lawsuits, reputational harm, or even acquisition delays.

In this context, Duty of Vigilance due diligence has become essential to secure transactions, protect communities, and align with stakeholder expectations.

Client challenge

A Global Energy and Renewable provider approached Ksapa with a critical request: conduct an in-depth Duty of Vigilance due diligence process for a planned hydroelectric acquisition. The main objectives included:

• Documentary analysis: review public records, media reports, and documents provided by the target company.

• Comprehensive evaluation: assess risks across human rights, labor, corporate responsibility, ethics, and environmental compliance.

• Risk identification and ranking: highlight potential red flags and prioritize key issues.

• Actionable recommendations: propose practical strategies to mitigate risks and secure the acquisition.

Our approach

Ksapa executed a multi-faceted due diligence process addressing key areas of concern:

1. Documentary analysis

   • Reviewed policies, compliance reports, and questionnaires from the client and target company.

   • Assessed findings against external advisor reports and publicly available information.

   • Mapped risks in alignment with the UN Guiding Principles on Business and Human Rights and the OECD Guidelines for Multinational Enterprises.

2. Risk mapping across key areas
   • Workforce impact

     • Investigated occupational health and safety, including accident rates and exposure to poor working conditions.

     • Analyzed labor practices such as working hours, collective bargaining, and risks of strikes or protests.

   • Community impact

     • Evaluated the impact of hydroelectric operations on surrounding communities.

     • Assessed disruptions to essential services, exposure to flooding or natural disasters, and cultural or health risks.

   • Security Contractor Compliance

     • Reviewed practices of third-party security providers.

     • Checked alignment with legal standards and screened for risks of excessive force

   • Land Ownership and Indigenous Rights

     • Analyzed potential cases of forced displacement or unfair compensation.

     • Examined the risk of damage to cultural heritage and indigenous rights violations.

   • Supply chain transparency

     • Investigated compliance of major suppliers with ethical and legal standards.

     • Identified risks of human rights abuses in upstream operations.

3. Actionnable recommendations 
   • Delivered a structured report highlighting red flags, associated risks, and mitigation strategies.
   • Provided a prioritization framework to help decision-makers focus on the most material issues.
   • Suggested governance improvements for long-term monitoring of ESG risks.

results 

1. Enhanced Risk Visibility: A Global Energy and Renewable provider gained a thorough understanding of risks across human rights, labor, and environmental aspects.
2. Regulatory Compliance: The diligence process ensured alignment with Duty of Vigilance laws and global human rights standards.
3. Actionable Insights: Delivered clear strategies to mitigate risks, facilitating a more informed and secure transaction.
4. Strengthened Stakeholder Confidence: The comprehensive report reinforced client’s commitment to responsible business practices building internal alignment on where to focus transactional discussion with target company.

Why Ksapa?

1. Expertise in ESG risk assessment and compliance.
2. Tailored methodologies addressing global and local regulatory requirements.
3. Proven track record in energy sector due diligence.
4. Access to a global network of experts for in-depth analysis.

Take Action Now

Ensure Compliance with Duty of Vigilance Laws Today

Partner with Ksapa to navigate complex transactions with confidence.

📩 Contact us: contact@ksapa.org
🌍 Learn more: Explore our Due Diligence Services
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