Insights from HSF’s private equity team

Posted on |
Insights from HSF’s private equity team

How does the HSF private equity team differentiate itself in the market?

John Taylor, partner and the head of the private equity practice in London: We have a multi-capability private equity practice, advising clients across the full lifecycle of investments from fundraising and capital deployment, supporting their investments all the way to exit. We work across all capital structures and execute extremely complex transactions and strategies in multiple jurisdictions. Our private capital team leverages our full-service offering and the multiple sector strengths within our wider firm.

Our team continues to grow strategically. In the past 12 months, our hires of Eleanor Shanks as head of international private equity in London, venture and growth capital partner Dylan Doran Kennett and leveraged finance partner Ambarish Dash have bolstered our private capital practice in London.

Dr Christoph Nawroth, partner, Düsseldorf: In Continental Europe, recent hires include private equity and venture capital partner Gregor Klenk in Frankfurt, as well as finance partners Dr Fritz Kleweta, Sergio Cires and Laure Bonin into our Frankfurt, Madrid and Paris offices respectively. The teams in continental Europe and London are fully integrated and offer our clients seamless advice wherever this is needed.

We’ve a strong client portfolio, advising the likes of EQT, Aquiline Capital Partners, H.I.G. Capital, GIC, and CPPIB on deals ranging across the likes of energy/renewables, infrastructure, TMT, life-sciences, and financial services.

Can you discuss some of the trends that are impacting your clients?

Joseph Dennis, partner, London (JD): In the UK, the recent stabilisation of interest rates has resulted in cautious optimism for sellers to begin work on exits that have been sitting patiently in the pipeline. As rates begin to ease, we expect to see the gap in pricing expectations beginning to close.

Christopher Theris, partner, Paris: In continental Europe, the sheer number of elections and similar political events has resulted in a cautious market. We’re also seeing the use of bilateral processes at the inception of deals, moving away from a more typical auction or auction/bilateral hybrid arrangement.

‘The City of London is arguably the top global financial centre and has a huge range of intrinsic advantages.’

JD: Our private equity team were first movers in identifying the trend towards funds specialising along sector lines. Some years ago, we positioned our private equity practice to be closely aligned with our top-tier sector focused M&A practices, along the same sector lines as our key sponsor clients and targets. We are now well positioned to advise multi-strategy and multi-geography sponsors active through their full investment lifecycle across each of the geographies in which we operate, and we and our clients are really benefiting from this approach.

What role do you see for continuation funds?

Jonathan Blake, head of international private funds strategy, London: Continuation funds are part of a broader growth trend in secondary opportunities. Although the global economy is showing positive signs of stability, achieving the exit multiples that GPs would expect for their high-performing assets is still uncertain in current market conditions.

Stephen Newby, partner, London: The structure of a continuation fund offers LPs an opportunity to either liquidate or continue to hold their position. It also offers an opportunity for secondaries investors to participate, often with one ‘anchor’ investor that underwrites the existing LPs that decide not to rollover.
These options give GPs a good alternative to a full exit, especially where the GP is confident in its ability to add further value to an asset that will help to achieve even greater returns over the medium term.

Michael Jacobs (MJ), partner, London:To compliment continuation funds, we are seeing more structured pre-exit syndication and introducing a wider pool of investors into later stage assets – in part to drive liquidity and partial exits, and also a consequence of the broader ‘private for longer’ theme. The ‘private IPO’ concept is part of this trend.

How is the industry reacting to the change in government and the new policies that affect private capital?

Eleanor Shanks, partner and head of international private equity in London: The private equity industry as a whole wants to play its part and will continue to make the case to governments of the sector’s significant contribution to the whole economy, including to growth and productivity. It is a significant driver of private investment in the UK as it is globally.

There are some specific tax policy proposals that were in Labour’s manifesto that the government are currently considering, and we all appreciate the complexity balancing the incentives and the country’s fiscal position – in driving that investment and growth which in turn drives receipts for the revenue.

MJ: The City of London is arguably the top global financial centre and has a huge range of intrinsic advantages – its competitiveness has been boosted in recent years with the Financial Services and Markets Act and the Edinburgh and Mansion House reforms, alongside the UK’s listing regime reboot. While it is hard for any individual policy decision to change this, we would caution the government to not take the City for granted.

Subject to unexpected circumstances, what might we expect for deal activity at the start of 2025?

David D’Souza, partner, London: The focus on Distribution to Paid-In Capital (DPI) means the UK pipeline continues to deepen. Reassuringly, it is also widening across sectors which may have been slower in the last few years.

Alberto Frasquet, regional head of corporate EMEA, Madrid: In Continental Europe, private equity funds are likely to continue to look at assets in the pharmaceutical/healthcare, infrastructure and energy (particularly data centres), education and software sectors – these appear to be the most attractive for investment.

For more information, please contact:

Herbert Smith Freehills
Exchange House
12 Primrose Street
London
EC2A 2EG

T: 020 7374 8000

www.herbertsmithfreehills.com

ESG in Switzerland: Schellenberg Wittmer Q&A

Posted on |
ESG in Switzerland: Schellenberg Wittmer Q&A

In the last two years, how has the ESG practice group grown at the firm?

Anya George: One notable characteristic of our group now is that it is truly multidisciplinary. We possess expertise in both transactional matters and disputes. In recent years, we have placed increased emphasis on financial market regulation, greenwashing, and carbon credits—areas where many of our competitors lack expertise. In Switzerland, there has been a noticeable rise in requests for advice on ESG matters across the board, although understanding due diligence and reporting requirements remains a primary concern for our clients. Continue reading “ESG in Switzerland: Schellenberg Wittmer Q&A”

‘Clients are not only seeking legal expertise but also looking for firms that practice what they preach’ – ESG Q&A: Herbert Smith Freehills

Posted on |
‘Clients are not only seeking legal expertise but also looking for firms that practice what they preach’ – ESG Q&A: Herbert Smith Freehills

Could you share some examples of innovative ways Herbert Smith Freehills is working with clients in the ESG space?

Silke Goldberg: At Herbert Smith Freehills, we are actively engaging with our clients in the ESG space through innovative tools like our Global ESG Tracker and ESRS Navigator. Continue reading “‘Clients are not only seeking legal expertise but also looking for firms that practice what they preach’ – ESG Q&A: Herbert Smith Freehills”

ESG: Evolution or revolution?

Posted on |
ESG: Evolution or revolution?

Jonathan Bower, partner, planning and infrastructure team leader and partner lead for net zero by 2030 strategy at Womble Bond Dickinson, sets out the case for a clear ESG vision with a focus on inspiring behavioural change

Historical events have often led to transformative changes. The Industrial Revolution was one such moment and, today, we’re on the brink of another significant shift – an environmental, social and governance revolution. Although centuries apart, there are clear parallels between the two, not least the considerable cultural and social change needed to create a revolution. Continue reading “ESG: Evolution or revolution?”

The state of UK general counsel in 2024: Key insights and challenges

Posted on |
The state of UK general counsel in 2024: Key insights and challenges

The legal landscape for general counsel (GCs) in the United Kingdom is undergoing significant challenges and transformations in 2024. A comprehensive survey conducted by Wakefield Research and commissioned by Axiom provides crucial insights into the current state of in-house legal departments, shedding light on budget constraints, talent management issues, and the quest for innovative solutions.

Continue reading “The state of UK general counsel in 2024: Key insights and challenges”

The growing importance of ESG data in the legal sector

Posted on |
The growing importance of ESG data in the legal sector

Environmental, social and governance (ESG) has evolved at a rapid pace in recent years. We’ve seen a meteoric rise in stakeholder engagement and interest well beyond the investment community where the concept initially started to gain mainstream attention. This really accelerated in 2020 around the Covid pandemic when the importance of pressing global issues like the combined climate and biodiversity crises were re-evaluated. This was followed by well documented labour and sourcing issues as global economies opened back up after lockdowns. We are now entering a phase where there is a clear shift in progress, away from voluntary standards and best practice ESG frameworks, towards mandatory reporting and stricter disclosure requirements. These can be linked to specific issues such as physical and transition climate risks, but also to the more general ESG issues, for example supply chain and the associated issues of modern slavery and forced labour.

As a consequence, there is now more ESG data than ever before, and an ever-growing demand for good quality, accurate information, not just on or for an individual entity, but data and insights on its wider value chain.

ESG data has therefore become increasingly important for organisations, none more so than for law firms who have practice areas and touchpoints across many sectors and rely on up-to-date, precise information to fulfil their responsibilities to clients. Law firms with corporate practices will need to advise their clients on ESG risks and opportunities associated with ESG due diligence, emerging or recently introduced regulations such as Corporate Sustainability Reporting Directive (CSRD) or Corporate Sustainability Due Diligence Directive (CSDDD) in the EU.

One of the major developments that has occurred in the last 12 months has been the move via the International Financial Reporting Standards (IFRS) to consolidate a number of ESG standards such as the Sustainability Accounting Standards Board (SASB) and the Task Force on Climate-Related Financial Disclosures (TCFD) into a single standard. This led to the development and release of International Sustainability Standards Board (ISSB) standards. Long heralded as the start of the global baseline for ESG standards, the objective was to streamline and simplify ESG, and reduce the alphabet soup of standards across multiple jurisdictions. As this regime beds in, challenges remain to have such a unified set of ESG standards that should bring much needed clarity and precision into ESG terminology.

The challenges and opportunities for law firms

This historic lack of standardisation was in part responsible for the patchwork of regulatory and disclosure requirements. This in turn created uncertainty about the quality and reliability of data which then led to greenwashing by many businesses, with the consequent well publicised greenwashing litigation and investigations by the Competition and Markets Authority (CMA).

These uncertainties create very real challenges when advising private equity firms on ESG diligence. The complexities include the jurisdictions of your clients, the target companies being acquired, their industry, size, structure and whether they are private or listed entities. To navigate this minefield, there is a clear need for a robust standardised and repeatable risk screening approach to enable key global ESG issues to be framed during the diligence phase.

‘While the current ESG landscape does present major challenges, it also presents a unique opportunity for law firms to position themselves as leaders.’ Tom Venables, Landmark

But while the current ESG landscape does present major challenges, it also presents a unique opportunity for law firms to position themselves as leaders in this fast-emerging space and build out their own services to support the needs of their clients backed by the best data and insights. Many firms have made great strides in developing dedicated ESG practice areas and, with surveys over the past couple of years indicating, many more have plans to do so in the future. With the development of these teams comes the need for robust and reliable data that can be incorporated into a firm’s ESG processes and systems.

The role of technology

Technology is already playing a critical role in the utilisation of ESG data in a number of contexts, with many firms integrating software solutions or systems to enhance their existing processes. Notable advancements such as the prerequisite for CSRD reporting to have digital tags and for the reports to be machine readable so submissions can be easily accessible within an EU-wide central database all point towards a future of abundant and accessible ESG information.

When considering ESG data for specific scenarios such as due diligence, technology provides a powerful tool to identify and draw out difficult to find information, whether that’s specific information hidden in company disclosures and annual reports, or interrogating regulatory databases to identify information on product recalls or data breaches.

‘There will be a fine line to tread for all organisations between the exponential increase in energy consumption needed to power the AI revolution, against the backdrop of the transition to a net zero world.’ Tom Venables, Landmark

The future of ESG data will undoubtedly revolve around generative AI models and machine learning combined with the oversight and input from expert consultants. We can anticipate the development of forward-looking projections that consider global changes around complex interrelated factors including political instability, climate change, biodiversity loss and systemic risks. Of course, there will be a fine line to tread for all organisations between the exponential increase in energy consumption needed to power the AI revolution, against the backdrop of the transition to a net zero world.

Introducing Risk Horizon ESG Screen Report

Landmark’s ESG risk screening tool Risk Horizon, and its managed service ESG Screen reports, have been supporting leading national and international law firms over the last four years. Risk Horizon has been used to provide analysis and insights to aid ESG diligence on PE advisory, corporate mergers and acquisitions, client and supplier screening, in addition to gap analysis on law firms’ own ESG credentials.

Data and partnerships

Landmark is an IFRS Sustainability Alliance Member and licensee for using SASB standards data and IP forming the underlying Risk Horizon framework for industry risk. Key Risk Horizon features include:

  • Scope of topics covered by Risk Horizon are aligned with additional recognised global standards such as GRI, CDP and TCFD.
  • Risk Horizon is also home to Anthesis Group and Landmark created datasets and business logic supplementing SASB framework data.
  • Data is regularly reviewed and updated by our consultancy team
  • Risk Horizon includes global datasets and indexes covering 50 risk topics from organisations such as Transparency International and International Trade Union Confederation
  • Through our managed service reports, platform data is supplemented by consultant reviewed information from additional resources such as the Business and Human Rights Resource and a range of regulatory databases and digital media sites. This ensures potential compliance and reputational issues are sourced at the earliest stage possible.

Legal context

Risk Horizon’s ESG Screen report is an ideal first step when acting on behalf of a client for PE advisory work or M&A corporate transactions. The report is suitable as an early stage due diligence screening report that frames the key ESG issues that should be considered especially where information is limited for private companies. The following use-cases demonstrate the variety of contexts in which the report can be utilised, as well as how it can be focused into these areas:

Private equity/M&A

  • Quick and efficient risk profile of potential target company
  • Suitable for both public and private companies
  • Focused ESG diligence questions
  • Reduces costs incurred and time taken in diligence process

Capital markets/regulatory

  • Identify ESG risk areas for disclosures
  • Standardised approach with SASB standards aligning with company reporting frameworks
  • Global tool covering 50 risk topics, 85 industries and thousands of data points

Client pitches and client screening

  • Clear and concise layout to present ESG risks and opportunities
  • Objective assessments that can form the basis for the client pitch and from which discussions can be based

As well as the above, the Risk Horizon ESG Screen report can also provide value when assessing any reputational ESG risks when looking to act for potential new clients.
Risk Horizon helps to make sure the right issues are being looked at based on the appropriate geographies and industries of a given company.

By requesting a Risk Horizon report from Landmark, you and your client will benefit from the combination of a world-class specialist ESG consultant, combined with the power of the Risk Horizon software and its global data points to complete the assessment.

For more information, please contact:


Tom Venables
ESG lead consultant – Landmark Information

Landmark Information Group
5-6 Abbey Court
Eagle Way
Exeter
EX2 7HY
E: tom.venables@landmark.co.uk

www.landmark.co.uk

Lebanon’s struggle for stability amid economic and geopolitical challenges

Posted on |
Lebanon’s struggle for stability amid economic and geopolitical challenges

Lebanon finds itself trapped in a profound political, economic, financial, and social crisis, the effects of which have echoed across its public services and societal fabric for half a decade. This multifaceted crisis has created a stark escalation in poverty levels, marking a troubling descent in the standard of living for almost half the population. Concurrently, the efficacy of public sector institutions has faded, with service provision faltering under the strain of fiscal constraints and administrative inefficiencies.

Inflation and workforce exodus

At the heart of this turmoil lies a relentless inflationary spiral, driving up prices and eroding the purchasing power of ordinary citizens. However, in the first quarter of 2024, inflation showed signs of slowing down while the exodus of skilled workers from the public sector, lured by more promising prospects in the private sector or abroad, continues.

Armed conflict and damages

The situation is further aggravated by ongoing conflicts, notably the war along Lebanon’s Southern border in conjunction with the war in Gaza. This ongoing conflict has taken a heavy toll on the country’s physical infrastructure, destroying houses, roads, and agricultural lands with extensive forest fires and the destruction of thousands of acres of farmland, and soil damage due to the use of white phosphorus bombs. Moreover, since 8 October 2024, over 90,000 people have been displaced from southern Lebanon, further exacerbating the humanitarian crisis, and highlighting the severe impact of the regional instability on civilian lives.

Syrian refugee crisis

Lebanon hosts more than two million Syrian refugees who have fled their homes in search of safety due to the civil war, marking the highest per capita globally. This influx has placed a severe strain on Lebanon’s resources and infrastructure. Syrian refugees often work without permits, do not pay taxes, and do not pay for electricity. Even before the Syrian refugee crisis began in 2011, Lebanon faced a shortage in electricity production relative to consumption. Over the past five years, the number of refugees has increased significantly, leading to a surge in electricity consumption. This has exacerbated the strain on Lebanon’s already struggling power grid, leading to more frequent and prolonged power outages. Additionally, a large number of refugees are involved in criminal activities, and more than half lack residency status, exacerbating social tensions and straining the country’s infrastructure. The burden is particularly evident in public services. There is an overload on healthcare services, schools are operating in two shifts to accommodate the influx of refugee children, and roads and other infrastructure are under significant pressure.

Furthermore, the security services are weakened due to inadequate wages and resources, making them less effective in dealing with ordinary crime. The proportion of Syrian detainees compared to the overall prison population is higher than that of Lebanese detainees. Despite efforts by Lebanese authorities, the international response, particularly from Europe and the United States, has been inadequate, ignoring the calls for facilitating the refugees’ return to safe zones
in Syria.

‘Lebanon faces an uphill battle to salvage its economic vitality and restore normalcy for its population amid these challenges.’

IMF Negotiations

Since May 2020, Lebanon has been in negotiations with the International Monetary Fund (IMF) for a rescue package that would help stop the deterioration of its macroeconomic outlook. An initial Staff Level Agreement (SLA) was signed between Lebanon and the IMF in April 2022 for a four-year extended fund facility that envisioned restructuring the financial sector, undertaking fiscal reforms, and strengthening governance. However, progress in implementing the actions mandated by the 2022 agreement has been extremely slow. In such a scenario of limited progress, the IMF has warned that continued inaction and weak willingness for reform could lead to a ‘never-ending crisis’.

World Bank initiatives

The World Bank has initiated several projects to support Lebanon’s recovery. One major initiative is the US$34m Fiscal Management Project in February 2024, aimed at restoring core fiscal management functions to support revenue mobilisation and ensure the accountable use of public resources. This project focuses on stabilising revenue administration, enhancing tax compliance, and upgrading ICT systems for tax and customs functions. It also seeks to restore fiscal controls, improve budget preparation and fiscal reporting, and strengthen oversight and accountability mechanisms.

Currency stability

Despite the challenging environment, the Lebanese pound (LP) maintained a stability against the US dollar on the parallel FX market due to:

  1. high dollarisation as Lebanon’s economy heavily relies on the US dollar for transactions and savings;
  2. convergence between official and parallel exchange rates: Since mid-February 2024, there has been a relative convergence between the official exchange rate and the parallel market rate for the Lebanese pound against the US dollar;
  3. growth in BDL’s liquid FX buffers: The Banque du Liban (BDL), Lebanon’s central bank, has experienced continuous growth in its liquid foreign exchange (FX) reserves; and
  4. due to quasi-balanced public and external accounts: Lebanon’s public finances (government revenues and expenditures) and external accounts (foreign trade and financial transactions) were somewhat balanced or stable.

Conclusion

Lebanon faces an uphill battle to salvage its economic vitality and restore normalcy for its population amid these challenges. Continued efforts towards fiscal reforms, international support, and effective governance will be crucial for its recovery.

Law Offices of Naoum Farah as a law firm deeply invested in Lebanon’s future, we are committed to supporting legal reforms that promote transparency, accountability, and sustainable development. We believe that through strategic legal interventions and robust policy frameworks, Lebanon can overcome its current challenges and build a more stable and prosperous future.

For more information, please contact:

Law Offices of Naoum Farah
Farrania Building, Said Freyha Street, Hazmieh
Po Box 16 7055
Achrafieh, 1100-2180 Beirut
Lebanon

T: 961 5 957 600
E: lawfarah@lawfarah.com

Q&A: Sarah Thompson, Arthur Cox

Posted on |
Q&A: Sarah Thompson, Arthur Cox

What is the current state of Irish legislation on ESG?

Environmental, social and governance considerations have always been important to our clients but in recent years conversations about ESG matters have risen to the top of many organisations’ agendas, especially following the pandemic.

At Arthur Cox, we have seen demand for ESG-related advice increase over recent years and we expect that trend to continue as ESG considerations are pondered by governments, regulators, companies, investors and wider society.

The Irish legislative landscape on ESG matters is made up of domestic and EU measures (all of which exist in the context of global initiatives and discussions).

ESG touches upon multiple policy areas, such as climate action, biodiversity, energy, water, financial services, commercial enterprise, and transport. This means that legislation on ESG covers a broad range of topics and has an impact on multiple stakeholders.

When we talk about ESG, many of the legislative measures over the past decade have focused on the E of ESG, ie environmental goals (particularly those related to climate), but it is important to remember that there have also been significant legislative and policy initiatives connected to the S and the G.

Irish domestic initiatives over recent years are many and varied. They include the publication of Ireland’s first statutory National Adaptation Framework in 2018, the passing of the Climate Action and Low Carbon Development (Amendment) Act in 2021, committing Ireland to specific greenhouse gas emission reduction targets by 2030 and 2050, the Circular Economy and Miscellaneous Provisions Act in 2022 (supporting Ireland’s transition to a circular economy) and the Work Life Balance and Miscellaneous Provisions Act in 2023 (setting new ‘S’ rules for Irish workers).

At an EU level, measures such as the European Commission’s 2018 Action Plan on Financing Sustainable Growth, 2019 Green Deal and 2021 Sustainable Finance Strategy have led to a proliferation of European legislative measures, some of which are directly effective in Ireland with others being transposed into Irish law.

Are there any recent or upcoming changes to Irish ESG legislation that our readers should be aware of?

There are a number of measures that Irish businesses should be aware of and the key one to mention is the Corporate Sustainability Reporting Directive (CSRD).

Irish legislation transposing the Corporate Sustainability Reporting Directive (CSRD) is expected to be published ahead of the 6 July 2024 deadline. Companies within scope of the first phase will be preparing to report in 2025 on FY 2024.

We recognise that ESG considerations are impacting all of our clients across sectors not just through law and regulation but through other potential ESG-related exposures.

What legal obligations do Irish companies have in terms of ESG reporting?

Many of the legal obligations concerning ESG in Ireland stem from EU legislation. The focus of EU ESG measures in recent years has been on disclosure and reporting (as opposed to mandating specific actions).

The measures include those set out in:

  • the Non-Financial Reporting Directive (2014/95/EU)
  • the Corporate Sustainability Reporting Directive (EU) 2022/2464
  • the Sustainable Finance Disclosures Regulation (EU) 2019/2088
  • the Taxonomy Regulation (EU) 2020/852
  • the Capital Requirements Regulation (EU) No 575/2013
  • the Low Carbon Benchmarks Regulation (EU) 2019/2089
  • the Climate Law Regulation (EU) 2021/1119
  • the Gender Balance on Corporate Boards Directive (EU) 2022/2381

How does Irish law enforce ESG disclosure by companies?

Enforcement covering matters that are now labelled ESG is not new. Up to now, Irish law has overseen ESG disclosures under general rules of company law, eg, through examining company reports for material misstatements. Given the new and upcoming ESG-specific disclosure requirements, we expect enforcement to become increasingly robust with companies’ sustainability information being scrutinised by various stakeholders including regulators, lenders, insurance companies, shareholders and the general public.

The reach of ESG regulation is very broad and the regulatory sanctions will vary depending on the particular regulator engaged by the event that triggers an investigation. The regulatory and reputational implications of investigations are likely to be particularly significant if greenwashing allegations emerge.

It is important to remember that enforcement action by regulators is not the only means by which company disclosure will be scrutinised and challenged and we expect a rise in actions through litigation.

What are the penalties for non-compliance with ESG regulations in Ireland?

Regulatory sanctions will depend on the nature of the specific regime engaged. They can include directions, cautions, reprimands, fines, suspensions or revocations of authorisations.

Given the number of different sources of ESG regulations in Ireland, it may be most helpful to give an illustrative example. Taking the CSRD as that example, the CSRD will require companies to report sustainability information in compliance with new reporting standards. Failure to comply with these standards can result in substantial fines, eg, financial penalties of up to €50,000 and administrative fines of up to 2% of a company’s annual average revenue if it exceeds €400m.

Outside formal, financial penalties, it is also important for companies to consider the reputational risks associated with getting ESG disclosures wrong.

How does Irish ESG legislation address social issues such as employment rights and diversity?

Irish ESG legislation has been increasingly attentive to social issues, including employment rights and diversity, which underscores a broader commitment to equality, diversity and inclusion issues.

The introduction of the Gender Pay Gap Information Act in 2021 marked a significant step towards transparency in the workplace, requiring organisations with more than 250 employees to report gender pay gap metrics. From 2024, companies with 150 employees or more will be required to submit gender pay gap reports, and from 2025 this will be extended to companies with 50 employees or more.

How does Irish legislation ensure the environmental aspect of ESG, specifically in terms of sustainability and climate change?

Irish legislation has taken significant steps to ensure the environmental aspect of ESG, particularly focusing on sustainability and climate change.

The Climate Action and Low Carbon Development (Amendment) Act, signed into law in 2021, commits Ireland to a legally binding path to net-zero emissions by 2050 and a 51% reduction in emissions by 2030 from a 2018 baseline.

This act is a cornerstone in Ireland’s framework to meet its international and EU climate commitments, aiming to transform the economy towards a greener future.

What is Arthur Cox’s approach to ESG issues in its legal practice?

At Arthur Cox, we recognise that ESG considerations are impacting all of our clients across sectors not just through regulation but through impacts on their business proposition.

Our ESG group works with our clients to identify and integrate ESG priorities at all levels of their businesses. We advise clients on areas such as energy transition, climate action, sustainable finance and green bonds, ESG disclosures and sustainability reporting, sustainable real estate investment and development and green leases.

What sets us apart from other firms is the breadth and cutting-edge nature of our ESG practice. Our ESG group is at the forefront of the market, providing clients with advice across the entire ESG space.

We have assembled a cross-disciplinary team of experts who bring a wealth of knowledge and experience across sectors to work with our clients to meet their ESG-related goals and obligations.

Our approach is collaborative and client-focused. We work closely with clients to understand their unique goals and challenges, providing tailored solutions that reflect the latest legal updates and industry insights.

What measures has your firm taken to improve its own ESG performance?

Sustainability for us involves a commitment to robust governance, policies, and practices. That commitment includes a relentless focus on diversity and inclusion, respect for human rights, responsible procurement and environmental sustainability. The integration of each of these elements is a key part of the decision making for our business.

Our ESG strategies are overseen by our Sustainable Business Committee, which manages our Sustainable Business Programme. At the core of this programme is the annual publication of our Sustainable Business Impact Report. Launched in 2021, this report is a comprehensive overview of our initiatives and accomplishments across four essential dimensions: community, workplace, marketplace, and environment. By aligning with the UN Sustainable Development Goals, we aim to show our commitment to global sustainability standards.

We aim to play an active role in contributing to positive change while minimising our environmental impact through a programme of monitoring and continuous improvement.

What are the biggest ESG challenges your firm currently faces, and how are you addressing them?

As a firm, we have set ambitious targets in relation to reducing our Scope 1, 2 and 3 emissions. Over the past 12 months, we have continued to work with our people and external stakeholders to assist us in the delivery of the key measures required to achieve our carbon reduction goals.

Our work in this area is continuing and we are very aware that we need to continue to work with our people to reduce our carbon footprint as an organisation. To address this, we are working hard to explore alternatives so that we can provide more sustainable options through an updated travel policy, online meetings, events and other operations.

How does the firm assist clients in integrating ESG factors into their business strategies?

We assist clients in navigating reporting obligations and advise boards on strategic planning, risk management and internal controls to support disclosure in relation to their business operations and value chains.

Our ESG group advises on disclosure and sustainability reporting obligations in relation to climate, diversity and other aspects of ESG in compliance with local and international legislation and voluntary frameworks, including the CSRD, the Taxonomy Regulation and Task Force on Climate-related Financial Disclosures.

We also advise companies on all aspects of their governance arrangements. Board governance and oversight is essential in developing and delivering effective ESG strategy, managing risks including activism and litigation, supporting robust disclosure and maintaining stakeholder engagement.

We provide regular ‘horizon scanning’ insights to legal teams and company boards regarding ESG-related developments and advise boards on topical issues including board diversity, executive remuneration, directors’ duties and the implications of new legislation such as the proposed Corporate Sustainability Due Diligence Directive (CSDDD).

Can you share some examples of how Arthur Cox has helped clients navigate complex ESG issues?

Our ESG team offers advice on a multitude of complex ESG issues, such as:

Environmental: Under the environmental pillar we advise on energy system transition, energy efficiency and demand side response, resource management and the circular economy, carbon sequestration and emissions reduction, sustainable finance, climate-related plans, disclosures and activism and environmental due diligence.

Social: On the social side, we have extensive experience advising on the social impacts of organisations on internal and external stakeholders. We advise on equality and discrimination matters, environment, health and safety issues, community investment and capacity building as well as human rights and the rule of law.

Governance: Good governance is a core aspect of ESG, and our team regularly advises clients on all aspects of their governance arrangements, including areas such as strategic oversight, risk management, shareholder engagement and reporting and transparency.

For more information, please contact:

Sarah Thompson, partner, Arthur Cox

E: sarah.thompson@arthurcox.com

www.arthurcox.com/esg-hub

Understanding the EU Directive on Corporate Sustainability Due Diligence: A comprehensive guide

Posted on |
Understanding the EU Directive on Corporate Sustainability Due Diligence: A comprehensive guide

The European Union has taken a significant step towards promoting sustainable and responsible business practices with the adoption of the Corporate Sustainability Due Diligence Directive (CSDDD). Approved on 24 April 2024, this directive mandates large companies operating within the EU to integrate human rights and environmental due diligence into their operations and value chains. This article delves into the key aspects of the CSDDD, its implications for businesses, and the expected outcomes for various stakeholders. Continue reading “Understanding the EU Directive on Corporate Sustainability Due Diligence: A comprehensive guide”