More than a site report
EHS due diligence is often treated as ordering a Phase I environmental site assessment, but the risk in many deals sits elsewhere as well. Operating permits may not transfer automatically, workplace safety citations may reveal a pattern, and a facility may have agreed to orders or compliance schedules that the buyer will inherit. For real property, a properly performed and current Phase I assessment is part of how a buyer may qualify for certain federal liability protections for contamination it did not cause, though those protections carry continuing obligations after closing. A share purchase and an asset purchase move liability differently, which changes what the review needs to emphasize. Settling the deal structure early helps, because it shapes the scope of the work.
What the review usually gathers
Requests typically cover permits and their conditions, notices of violation and agency correspondence, earlier environmental reports, waste disposal records, and injury and illness logs. Interviews with plant managers often reveal what documents do not, such as an old tank, a filled-in pit, or a process that was quietly changed. Sampling through a Phase II investigation is a separate decision with its own cost, timing, and access questions, and a seller may restrict it. Buyers should also look at insurance history, since older policies can sometimes respond to historic contamination. Findings are more useful when they are organized by their effect on the deal rather than in the order consultants found them.
Turning findings into terms
The value of the review lies in what it does to the agreement. An identified issue can be handled through a price adjustment, a specific indemnity, an escrow, a pre-closing cleanup obligation, or environmental insurance, and each choice shifts risk in a different way. General representations and warranties often survive only for a limited period and are capped, which may be inadequate for contamination that takes time to surface. When we start, we look at the deal structure, the type of operations, the state and federal programs that apply, and the schedule to signing. We then scope the review to the questions that could actually change the decision or the price.
