Environmental due diligence is both a combined legal and technical exercise that is performed to satisfy certain liability protections that may be available under federal and state environmental laws. More specifically Parties to transactions also perform environmental due diligence to develop information about environmental conditions so they can allocate liability and manage environmental risks. Environmental due diligence often begins with a phase 1 environmental site assessment that is performed in accordance with the ASTM E1527 Standard Practice for Environmental Site Assessments (ASTM Phase 1 Standard), But can also include Environmental Transaction Screens and Phase II Environmental Site Assessments.

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    A Phase I Environmental Site Assessment (ESA) is a tool to determine whether a property may be contaminated. Prior to the purchase or occupancy of a property, the purchaser or future tenant has the option to complete a Phase I ESA to investigate the current and historical use of that property.

    The Phase I ESA utilizes a variety of historical resources, including local, state, and federal records, to identify past uses and/or occupants of the property that may present an environmental risk.  

    Certain users of Phase I ESAs (i.e., new purchasers of property) may be able to satisfy one of the environmental due diligence requirements to qualify for the bona fide prospective purchaser, contiguous landowner, or innocent landowner liability protections available under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) of 1980, the Superfund Amendments and Reauthorization Act (SARA) of 1986. AAI is intended to reduce, but not eliminate, uncertainty regarding the potential for RECs and HRECs in connection with the subject property.