Environment, Social and Governance (ESG) considerations are increasingly high priorities for global businesses as ESG regulations become more prevalent and investor expectations increase around the world. Mayer Brown has a strong track record in helping clients throughout the world address ESG issues.
Our diverse team of lawyers is experienced and well-equipped to advise businesses on the steps necessary to become more attractive to investors looking for socially responsible enterprises. We understand that incorporating ESG into a company's business plan creates value, enhances social license to operate and reduces reputational risks. Our team comprises lawyers in a wide range of disciplines, including corporate, environment, human rights, litigation, government relations, financial services, finance and trade, and provides integrated advice addressing the range of ESG risk factors and opportunities.
We work with our global clients to devise holistic frameworks and response strategies on emerging issues, such as climate change, global human rights compliance, sustainability and diversity under the rubric of ESG requirements. We also regularly advise on and structure sustainable finance transactions such as green bonds and social repo transactions and represent clients in ESG-related litigation.
For more than 20 years, Mayer Brown has been at the forefront of environmental matters, including a number that were first of their kind. We have advised both financial institutions and borrowers on ESG issues, including designing ESG management systems, preparing ESG action plans, complying with related corporate governance requirements and performing environmental due diligence on transactions.
We also regularly advise on environmental compliance regimes regarding chemicals, batteries, waste, plastics, contaminated land and other matters.
Sustainable Finance and Green Bonds
The concept of improving economic efficiency, prosperity and competitiveness, while contributing to the long-term protection of ecological systems and enhancing social well-being, corresponds closely to the long-term goals of many businesses. Sustainable finance, meanwhile, presents a variety of value-generation opportunities for corporate sustainability leaders.
Our lawyers’ experience in the alternative energy space includes structuring and executing green bond offerings on behalf of issuers to finance renewable energy projects and advising on emissions trading transactions. We have also advised several international non-government agencies and government development agencies with respect to their accreditation master agreements with the United Nations Green Climate Fund. We routinely advise borrowers and lenders on the Equator Principles and on the environmental requirements of the Asia Development Bank, African Development Bank and other development finance institutions and have begun advising on the evolving disclosure requirements in Europe, the United States and Asia.
With our extensive experience advising both financial institutions and borrowers on sustainable financing issues, we are well-positioned to provide strategic advice and guidance in this key area. Our experience includes building ESG management systems, preparing ESG action plans, refining and enhancing related corporate governance requirements, conducting due diligence and advising borrowers on the requirements of a multitude of global development financing banks and institutions.
Mayer Brown is one of the few global firms to work on first-of-their-kind green bond and green loan transactions across numerous industries, and our team understands the nuances of these markets in the United States, Europe and China.
Our experience includes structuring and executing green bond offerings on behalf of issuers to finance renewable energy projects, advising on the carbon credit system under the Kyoto Protocol and assisting in equity offerings by renewable energy and electric vehicle companies, including initial public offerings.
The global economy is shifting to lower-carbon sources of energy, coinciding with a continued focus on ESG issues. Mayer Brown provides tax solutions that capitalize on new investment structures, both for newer energy technologies that will take us into future and the traditional energy sources that continue to power the world today. Our experience includes advising and structuring solar, wind, carbon capture usage and sequestration, hydro, geothermal, advanced biofuels, biomass and other renewable or cleaner energy technologies, as well as working with traditional energy companies. Mayer Brown’s global tax lawyers have the industry knowledge and experience to cover all areas of the energy industry.
Mayer Brown’s Environmental team offers innovative solutions to clients facing litigation, navigating enforcement concerns, implementing regulatory compliance programs or tackling issues that arise in transactions. Our global presence—frequently representing clients in cross-border disputes and transactions throughout the world—is significantly supplemented by our deep experience litigating major cases in state and federal courts across the United States and providing preeminent appellate services.
Our Environmental practice combines regulatory experience, industry knowledge and scientific capabilities to handle the wide range of issues facing clients. From advice on routine technical compliance issues to bet-the-company crises, we understand our clients’ products and business goals and offer seamless, strategic advice and sophisticated, effective advocacy.
Our leading global real estate practice is well-versed in advising clients relating to land acquisition and development, new community entry, environmental sustainability legislation and risk management in the context of real estate portfolios (whether leased or owned). Adding further value and efficiency, we regularly coordinate with the firm’s Corporate & Securities and Construction & Engineering practices on real estate asset matters related to clients’ strategic growth objectives.
We have worked with a broad range of clients on their journeys to net-zero emissions. Our global team of lawyers has been actively involved in the carbon markets (both voluntary and regulated markets) since before their peak in the '00s. They have documented a wide range of emissions reduction purchase transactions and have advised on compliance and purchasing strategies for a variety of emissions offsets.
Members of our team have also advised on direct and private wire power purchase agreements that support the objective of moving toward renewable energy-only power procurement. Our team has strong experience with emissions reductions in the forestry sector, and we also advise clients on the ever-increasing range of carbon disclosure standards such as those of the Task Force on Climate-related Financial Disclosures (TCFD).
We counsel clients on human rights reporting and disclosure requirements, including their obligations under modern slavery legislation and emerging mandatory human rights and environmental due diligence legislation. Our experience spans the broad spectrum of stakeholders, including shareholders, investors, employees, communities, customers and suppliers/key members of the supply chain. We understand how to manage human rights within supply chains.
We are also experienced in advising clients, including financial institutions and development banks, of their obligations under international frameworks such as the UN Guiding Principles on Business and Human Rights, the OECD Guidelines on Due Diligence for Responsible Corporate Lending and Securities Underwriting and the IFC Performance Standards. We advise clients on ethics, anti-corruption and human rights issues in connection with corporate transactions, proactive and emerging risk initiatives, compliance programs and, if needed, cross-border investigations, litigation and appeals on such matters. We are also experienced advisors on worker health and safety and employee 401(k) investment in socially responsible funds.
For more on our Business and Human Rights experience, see our Business and Human Rights webpage.
As one of the world’s leading securitization and structured finance firms, we are also uniquely positioned to provide cutting-edge advice to all participants in the securitization and structured-vehicle financing market, which will continue to offer the social finance industry a promising source of funding. Along with CGAP (Consultative Group to Assist the Poor), Mayer Brown has helped develop the leading forms used to structure and document private equity investments in microfinance organizations. We have also advised on some of the most successful private equity investments in microfinance and advised on some of the largest and most sophisticated structured debt vehicles.
Our lawyers counsel firms on their corporate governance requirements under relevant codes of conduct, exchange listing standards, regulations and legislation, at both global and regional levels.
Our Corporate Governance practice brings together highly experienced lawyers from across firm practices to help both public and private companies establish and maintain a comprehensive governance framework, including for key sustainability and environmental priorities, which allows directors and senior managers to more effectively guide their organizations in an increasingly complex and interconnected global environment. In this area, we routinely advise corporate clients on ESG issues, including on developing and implementing ESG management systems, preparing ESG action plans and advising on related corporate governance requirements.
Our advice, where needed, also extends to advising firms’ senior personnel on their adherence to individual accountability rules, as well as managing activist investors. This includes advising clients on social aspects of their corporate governance, such as diversity in boards; drafting and reviewing governance-related policies; liaising with regulators; and assisting with filings where required by corporate or regulatory law.
- Advising a foreign embassy to the EU on the content, practical implementation and expected implications of the EU Plastics Strategy and related measures.
- Successfully represented 14 major industry groups in challenging the legality of the United States Environmental Protection Agency’s 2015 regulation defining “the waters of the United States” within the meaning of the Clean Water Act (CWA). We served as lead counsel and obtained certiorari over the United States’ opposition and prevailed 9-0 on the merits of the issue of where challenges to EPA’s “Waters of the U.S.” rule may be litigated.
- Advised a leading financial information services, news and media company on issues arising out of carbon emissions trading, legal framework, implementation models and development of climate exchanges in China and also on issues arising out of PRC environmental rules and regulations including China RoHS and WEEE directives.
- Advising multiple clients in the acquisition of brownfield project sites, evaluating the nature and extent of any possible contamination, estimating the cost of remediation and defining the potential return if remediated. Where projects proceed, we coordinate with landlords, tenants, developers, environmental consultants, lenders, insurance providers, regulatory agencies and other legal counsel to create a legal strategy that provides the greatest return and protection.
Safeguarding the Environment
- Advising one of the world’s leading apparel brands on the proposed establishment of a joint venture in Asia. The JV partner was a well-known worldwide organization that helps collect waste plastics and process them into environmentally friendly products that can be used for clothing. One of the key purposes of the JV was to establish suitable controls over collection practices.
- Assisting a multinational Australian-based mining conglomerate in understanding and addressing the exposure of its directors, officers and members of relevant committees to potential environmental liabilities in cases of environmental incidents. This included the planning and development of ESG directives to better address environmental liability risks.
- Assisted the company in charge of the largest Brazilian hydroelectric power plant in assessing the status of implementation and recommended adjustments to several projects for managing socio-environmental impacts caused by the plant’s reservoir operation.
- Advising on a range of Emissions Reduction Purchase Agreements (ERPAs) in respect of CDM and JI projects under the Kyoto Protocol, including in respect of CDM Programs of Activities, advance payment mechanisms, standard switching language and option provisions.
- Advising on a broad array of renewable energy financing transactions, green loans and green bond issues of the type that can form part of a company's carbon reduction strategy.
- Representing an industry trade organization in investigating, evaluating and responding to climate change litigation.
- Advising a global organization on the implementation of benchmarking under the EU ETS Directive, including providing legal opinions and engaging in detailed discussions with the European Commission.
- Advising a Brazil-headquartered global mining company on PRC regulatory and policy developments on climate change, emission reduction and renewable energy.
- Representing a diversified chemicals manufacturer in efforts to develop climate change legislation. Our work in this area has included activity on both comprehensive and focused initiatives.
- Representing a US-based fund in the formation of a fund-of-funds that invests in private equity funds that adhere to the UN Sustainable Development Goals. For this client, we also reviewed the fund documentation and policies and practices of the target funds to assess compliance with the UN goals.
Land and Community Rights
Enhancing rural development and livelihoods is another important element of environmental management. Mayer Brown lawyers have been active in sustainability initiatives involving rural development, environmental protection and supply chain management, including by:
- Assisting a major Brazilian sugarcane and biofuels company with several ESG challenges pertaining to its operations, including as to the legal implications of moving to 100 percent mechanized sugarcane harvesting, eliminating the use of fire and manual labor.
- Counseling a Brazilian client in dealing with environmental and social consequences of a major fire in one of its fuel distribution plants, which impacted nearby communities and entailed settlement negotiations with several stakeholders (public prosecutors, environmental agencies and residents’ associations).
- Advising a client on the land, environmental, town planning and construction aspects of a pilot co-combustion plant project involving the incineration of waste and the recycling of the end product into building materials in Hong Kong.
- Assisted Georgia Renewable Power in the $525 million of term project financing arranged by AMP Capital for GRP's 2 (60 MW each) biomass power plants in Franklin and Madison, GA. The financing was certified as a green loan by Kestrel Verifiers.
- Acted as lenders’ counsel in connection with the closure of the first US sustainable use-of-proceeds syndicated subscription finance facility for the KKR Global Impact Fund. Standard Chartered Bank acted as sustainability coordinator and co-lead arranger, and Morgan Stanley acted as administrative agent and co-lead arranger.
- Represented the underwriters in a public offering of $500 million 2.45 percent senior notes due 2026 and issued by Starbucks Corporation. This transaction marked the first-ever US corporate sustainability bond, which raises capital for projects with a mix of social and environmental benefits.
- Represented Canada Pension Plan Investment Board (CPPIB) on a $1.2 billion offering of green bonds led by CIBC World Markets Inc. and RBC. This is the first green bond sold by a pension fund globally. This transaction was a record size for a single green bond transaction in Canada according to Bloomberg data. Sold via the CPPIB Capital Inc. unit, the 10-year bonds were sold at a spread of 71 basis points over similar-maturity federal government bonds and offer a 3 percent coupon.
- Represented Citigroup, Bank of America and Morgan Stanley as underwriters in a public offering of $1.75 billion in auto loan-backed notes issued by the Toyota Auto Receivables 2014-A Owner Trust. This transaction marks the first-ever green bond in the auto finance market, and the proceeds of the offering will be used to finance new Toyota and Lexus gas-electric hybrid or alternative fuel powertrain vehicles that meet certain green standards.
- Represented the investors in connection with the issuance of an investment grade bond of $64.75 million to refinance debt for the 50 MW La Jacinta solar park in Uruguay.
- Represented Morgan Stanley and MUFG as underwriters in a public offering of ¥85 billion 0.372% senior notes due 2024 and issued by Starbucks Corporation. This transaction marked the first-ever sustainability bond issued in the domestic Japanese market.
- Represented the noteholders on the private placement of approximately $135.8 million in green bonds, investment-grade rated project bonds issued to partially re-finance the 70 MW Campo Palomas wind energy project in Uruguay. This deal was named “Project Finance Deal of the Year” by Bonds & Loans in 2017.
- Advised Unicredit Bank AG and other banks on the issuance of a £500 million Green Mortgage Pfandbriefe by Berlin Hyp AG under its debt issuance program.
We advise on a wide range of matters relating to business and human rights. (For more on our experience in this area, see our Business & Human Rights page.) In addition, we have:
- Represented Vakifbank on its issue of €750,000,000 of Sustainability Notes, the first-ever offering of a sustainability bond by a Turkish commercial bank, advising the client on its Use of Proceeds (UoP) disclosure for its prospectus and marketing materials, ESG-related investor due diligence, ESG related representations and warranties for the subscription agreement and listing on Euronext Dublin’s Green Bond Segment. The net proceeds of the issue of the Sustainability Notes are to be applied by Vakifbank for green and / or social projects.
- Represented Novartis AG on an offering of €1.85 billion sustainability-linked bonds by Novartis Finance S.A., guaranteed by Novartis AG. The €1,850,000,000 0.000% Sustainability-Linked Notes due 2028 were listed on the SIX Swiss Exchange and were the first-ever sustainability-linked bonds in the healthcare sector, the first-ever sustainability-linked bonds incorporating “social” targets, with bondholders entitled to receive a higher amount of interest if Novartis fails to meet its targets for expanding access to its innovative medicines and addressing key global health challenges, as well as only the second-ever sustainability-linked bond since the publication by the International Capital Markets Association (ICMA) of its Sustainability-Linked Bond Principles in June 2020.
- Advised LeapFrog Investments, a leading social impact investor focusing on Asia and Africa, in connection with its investment in Series B Preferred Shares of PT PasarPolis Indonesia, one of Indonesia’s first and leading insurtech companies. This was one of the top 10 insurtech transactions globally in 2020 (Insurtech Report).
- Advised a leading international development finance institution with respect to its investment in a financial institution based in Thailand operating in the high-growth segments of microfinance and micro-SME loans and providing financial services to small businesses, traders and other self-employed individuals who have historically had limited access to bank loans.
- Advised FMO (the Dutch development bank), Belgian Investment Company for Developing Countries (BIO) and Dragon Capital Group on the auction process and strategic sale of their collective 67 percent shareholdings in PRASAC Microfinance Institution, Cambodia's largest microfinance institution, with more than US$1.3 billion in assets. The transaction closed in March 2017 and was recognized as being one of the most innovative transactions in 2017.
- Advised clients on using AI legally and ethically. We have advised and provided training sessions on the potential use cases for AI in their organizations, the broader international legislative and policy landscape on the use of AI, the challenges and key issues that typically have to be addressed to ensure the legal and ethical use of AI and the steps to take and the controls to put in place to address these issues.
- Advised a major Norwegian mining company in navigating ESG issues connected with its operations in Brazil, involving negotiations with “quilombolas” (slaves’ descendants) and other stakeholders (public prosecutors, environmental and regulatory agencies). The negotiations seek to put an end to disputes with and among the quilombolas so that such disputes do not jeopardize the renewal of client’s environmental licenses (social licensing).
- Assisted a multinational Brazilian-based meat-processing conglomerate in improving and implementing ESG guidelines focused on preventing the acquisition of cattle from noncompliant suppliers (deforestation, human rights protection).
- Represented FMO on its divestment from a Sri Lankan microcredit institution.
- Advised FMO as international counsel on bilateral and syndicated financings to microcredit institutions in Vietnam, Mongolia, Bangladesh, Cambodia and Sri Lanka.
- Represented Partech International in its investment in EcoVadis SAS, a leading platform that helps companies monitor suppliers' environmental, social and ethical practices across global supply chains.
- Advising leading global insurers on ESG-related exposures of their financial institution policyholders.
- Counseling companies on directors’ duties required under various exchange listing standards, as well as the development of open forums for shareholders to discuss ESG values—including the social aspects of their corporate governance, such as diversity in boards.
- Counselling both public and private companies to establish and maintain a comprehensive governance framework, including as to key sustainability and environmental priorities.
- Supporting the development of investor relations strategies and shareholder communications and outreach activities.
- Advising company boards of directors and management with respect to addressing ESG-related shareholder proposals, shareholder engagement efforts, proxy advisory firm recommendations, institutional investor issues related to ESG matters, and ESG disclosure requirements and trends.