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ESG (Environmental, Social, Governance) considerations are gaining prominence in investment and corporate evaluations, reflecting a focus on sustainable practices. ESG Due Diligence has become crucial for enterprises navigating investment landscapes and regulatory frameworks, aiming to understand ESG risks and opportunities effectively.

Comparison with Traditional Due Diligence:

1. Both aim to inform investment decisions, but ESG Due Diligence focuses on non-financial aspects crucial for sustainable development and social responsibility.

2. Traditional Due Diligence examines financial, legal, and business aspects, while ESG Due Diligence delves into environmental impacts, social responsibility, and governance structures.

3. Traditional Due Diligence assesses historical and current status, whereas ESG Due Diligence considers long-term impacts and sustainability.

4. ESG Due Diligence follows international ESG standards and guidelines, incorporating stakeholder analysis and CSR program evaluation.

Core Content of ESG Due Diligence:

1. Environmental (E): Focuses on environmental protection, climate impact, carbon emissions, and resource management.

2. Social (S): Evaluates employee welfare, community relations, diversity, and inclusion, along with supply chain management.

3. Governance (G): Examines corporate governance structure, compliance, anti-corruption measures, and information disclosure.

ESG Due Diligence Process:

1. Pre-preparation and background investigation to understand objectives and identify material ESG risks.

2. Design ESG Due Diligence framework, including questionnaires and report structures.

3. Preliminary ESG risk assessment through questionnaires, public information retrieval, and risk severity evaluation.

4. In-depth Due Diligence involving data collection, site visits, interviews, and stakeholder communication.

5. Data analysis and report preparation, aligning with domestic laws, international standards, and industry specifics.

6. Application of results and follow-up actions, guiding investment decisions and post-investment management for continuous improvement.

Adaptations may be made based on project needs, company complexity, and industry characteristics, ensuring comprehensive and effective ESG Due Diligence aligned with evolving standards and best practices.