Environmental Due Diligence

Summary

Environmental due diligence is the process of identifying and assessing environmental risks associated with a property, asset or transaction. It is commonly undertaken during property acquisition, divestment, leasing or refinancing to understand potential liabilities related to contaminated land, hazardous materials, regulatory compliance and environmental constraints.

Environmental due diligence provides decision-makers with clarity on risk, potential costs and obligations before a transaction is completed.

Definition

Environmental due diligence is a structured assessment of environmental conditions and risks associated with land or assets, typically involving a review of site history, regulatory records and available environmental information. Where risks are identified, further investigation may be recommended.

The scope of due diligence may range from high-level desktop review to intrusive site investigation, depending on the nature of the transaction and risk profile.

Why Environmental Due Diligence Matters

From a commercial perspective, environmental due diligence helps identify liabilities that may affect property value, transaction terms or future development potential.

Environmental risks such as contaminated soil, groundwater impacts, asbestos-containing materials or regulatory non-compliance can result in significant remediation costs, project delays or restrictions on land use. Identifying these issues early allows risks to be managed, priced or mitigated before contracts are finalised.

From a legal and regulatory standpoint, due diligence supports informed decision-making and helps demonstrate that reasonable steps have been taken to identify environmental risks. This can be particularly important for financiers, developers and asset owners.

Environmental due diligence also supports smoother planning and approvals by identifying constraints that may trigger the need for further assessment, such as a Preliminary Site Investigation, Detailed Site Investigation or hazardous materials survey.

When Environmental Due Diligence Is Typically Undertaken

Environmental due diligence is commonly undertaken:

• Prior to purchasing or selling land or property

• As part of commercial leasing or portfolio review

• During mergers, acquisitions or asset transfers

• To support financing or lender requirements

• Before redevelopment or change of land use

The level of assessment is typically aligned with transaction value and risk tolerance.

Typical Components of Environmental Due Diligence

Depending on scope, environmental due diligence may include:

• Review of historical land use and site records

• Assessment of regulatory listings and notices

• Identification of potential contamination sources

• Review of existing environmental reports

• Desktop assessment of asbestos and hazardous materials risk

• Recommendations for further investigation where required

More detailed due diligence may involve site inspection or intrusive investigation.

Legislative and Regulatory Context

Environmental due diligence is not a statutory process but is widely recognised as best practice in property and asset transactions.

Regulators, lenders and insurers commonly rely on due diligence outcomes to understand environmental risk exposure. Findings may also inform planning approvals, remediation obligations or ongoing management requirements.

How We Can Help

Confluence Environmental provides environmental due diligence services to support property transactions and strategic decision-making.

Our services typically include:

• Desktop environmental due diligence assessments

• Review of existing environmental documentation

• Identification of contaminated land and hazardous materials risks

• Advice on further investigation requirements

• Clear reporting to support commercial and planning decisions

We focus on providing practical, proportionate advice that aligns with transaction timelines and risk profiles.

Related Terms and Concepts

• Contaminated Land

• Environmental Site Assessment

• Preliminary Site Investigation

• Detailed Site Investigation

• Hazardous Materials Survey

• Asbestos

• EPA Clean-Up Notice