Environmental, Social and Governance

As advisers to more FTSE 100 and 350 listed clients than any other firm, we understand the issues that our clients face and have the experience to help them anticipate issues which may arise in the future.

We have extensive experience of working with various listed clients to design, modernise and tailor their governance arrangements to keep pace with the changing nature of their business and best practice. In particular, we have recently worked with various listed clients to amend their governance arrangements to deal with and address climate change and other ESG-related issues. This is amidst a backdrop of increasing expectations from shareholders and other stakeholders, who are demonstrating less tolerance for perceived governance shortcomings, which has in turn led to an increase in the number of businesses targeted by sophisticated shareholder activists looking to “impose” governance change with the goal of increasing board-level accountability on ESG issues.

We also appreciate the challenges of, and advise our clients accordingly on, investment strategies to reduce their exposure to sustainability risks, while keeping the right side of an ever-changing regulatory landscape. There is no ‘one size fits all’ for advising on governance in respect of sustainability, particularly for clients in the financial services sector, and so we are well-versed in advising on issues relating to insurance and rapidly-changing prudential and societal obligations.

Highlights of our recent experience include advising:

• The boards of many FTSE 100 and FTSE 350 companies on their governance structures, including their approaches to ESG-related issues, including changes to committee and governance terms of references and frameworks, as well as interactions with proxy advisers
• Several FTSE and international private companies on materiality reviews, sustainability challenge reviews and broader governance evaluations
• Executive Secretariat and Governing Body of the Integrity Council for Voluntary Carbon Markets on its formation, governance model, expert panels and membership forum
• International Integrated Reporting Council (IIRC) on its combination with the Sustainability Accounting Standards Board (SASB) to form the Value Reporting Foundation (VRF), including the formation of the VRF’s governance arrangements and the governance-related processes necessary for the IIRC to seek the blessing of its many stakeholders

We are at the forefront of legislative changes and market trends, advising and supporting a broad range of clients on current and emerging climate-related disclosures and reporting requirements, such as the Task Force on Climate-related Financial Disclosures (TCFD) and the Taskforce on Nature-related Financial Disclosures (TNFD).

We appreciate the need for certainty for businesses, especially those with a footprint in multiple jurisdictions, which face the prospect of complying with various overlapping (and sometimes conflicting) reporting requirements. Whilst the work of the International Sustainability Standards Board (ISSB) has provided hope of some convergence, it is likely that divergence across jurisdictions will still be something that large corporates will have to contend with. We help clients keep abreast of fast-moving developments in reporting standards and work with them to ensure that their approach to assurance is informed by and aligned with best practice.

Highlights of our recent experience include advising:

• Various businesses including DS Smith, a luxury brand business and a leading global investment manager on navigating disclosures under the TCFD framework
• Cineworld on the articulation of its new principal risk relating to climate change and accompanying TCFD disclosures
• Coca-Cola Europacific Partners on developing a set of key legal and non-legal “triggers” to sit behind internal policy on when to seek assurance on sustainability-linked matters

The success of our sustainability practice is reliant on our ability to understand our clients, the challenges they face from an operational perspective and the role of innovation in areas such as mapping their complex supply chains.

Given the piecemeal approach to the introduction of legislation and policy in respect of supply chain and human rights due diligence and transparency we have also been working with a range of clients on how to prepare for emerging developments. The emerging focus on corporate accountability in respect of supply chains has also provided us with opportunities to work with clients to introduce ‘green clauses’ into contracts to incentivise responsible business behaviour across the supply chain and produce legally binding commitments in respect of matters identified during the procurement process.

Highlights of our recent experience include advising:

• Several businesses in the textile and fashion sector on supply chain risks, traceability and human rights concerns
• A number of businesses across a range of sectors, including in the packaging and food and beverage sectors on the supply chain implications of alignment with the EU taxonomy
• Marshalls plc on a high-profile acquisition including carrying out due diligence on, and contractual protection in respect of, responsible procurement and resourcing policies and activities
• Vodafone, Aviva, and Reckitt on ‘green clauses’ and future proofing their contracts, particularly given the nature of expanding initiatives in the ESG sector

As businesses move further towards improving their sustainability credentials, we expect their communications and actions on the ground to come under far greater scrutiny. We have seen ‘greenwashing’ and other climate change litigation claims lead to material legal, reputational and financial repercussions for businesses. It is important to balance the benefits of positive communications (whether PR or IR) with reliable data, assurance and analysis in practice. The proposal of increasingly stringent reporting requirements, the Corporate Sustainability Due Diligence Directive (CSDD) and the SEC’s new enforcement posture will only add to the importance of this area.

Our disputes and investigations team are recognised as a leading global practice and have supported our multinational client base on a range of complex, high-value and strategically significant investigations and claims.

Highlights of our recent experience include advising:

• An alternative energy company on a “greenwashing” complaint made to the Department of International Trade by various NGOs under the OECD Guidelines for Multinational Enterprises
• A global oil major on potential litigation risks in England arising out of climate change
• British American Tobacco in defence of a supply chain claim brought by 10,000+ Malawian tobacco farmers
• BHP in defence of an environmental disaster claim brought by in excess of 250,000 claimants in relation to a dam failure in Brazil

As the market for ESG financing has grown, we have been at the forefront of helping clients align their sustainability goals with their financing arrangements.

From sustainability-linked loans to socially responsible and green bonds, we have led on several first of a kind ESG financing deals across multiple sectors and jurisdictions. We have unrivalled experience on sustainability-linked financing matters, enabling us to spot opportunities early and anticipate risks quickly in advising on achieving long-term ESG objectives.

Highlights of our recent experience include advising:

• Burberry on its inaugural issuance of £300m Guaranteed Sustainable Notes due 2025, issued pursuant to Burberry’s Sustainable Bond Framework
• Derwent London on its £450m green RCF, the first for a UK REIT, and on its first sterling denominated senior unsecured green bond in an aggregate principal amount of £350m for a term of 10 years
• Electrolux on its €1bn sustainability-linked revolving credit facility
• UNICEF and the World Bank on the issue of a $100m bond due March 2026 and related arrangements between IBRD and UNICEF. Proceeds of the Bond will be used to support IBRD’s sustainable development and COVID-19 activities and includes a feature to support similar efforts by UNICEF, allowing private sector investment to assist in ESG objectives

We advise on a full range of ESG-aligned infrastructure and energy projects, including renewables and key technologies for the energy transition, in the UK and globally.

Our experience spans the full project life cycle (from development and construction, to operations and decommissioning) and covers all aspects of work (such as M&A, joint venture arrangements, tax, dispute resolution, financing, offtake, commodity trading, construction and O&M, real estate, environment, social impact, impact on habitats and communities, planning and regulatory advice). Our renewable and alternative energy experience includes onshore and offshore wind, solar PV, biomass, energy from waste and hydro-power as well as energy storage, hydrogen, and carbon capture and storage. We have also gained extensive experience over the years advising on a broad range of projects and power purchase arrangements and provide practical, commercially focused advice and, where needed, flexible and creative legal solutions.

Highlights of our recent experience include advising:

• Ørsted on all but one of their UK offshore wind projects since 2014 and on various non-UK transactions
• Hyphen Hydrogen Energy as lead global counsel on the multi-billion US dollar structuring and development of a vertically integrated large scale green hydrogen project
• VPI on all aspects of its proposed 800MW blue hydrogen project using carbon capture and storage at its Immingham site (UK), including construction and O&M strategy, financing and partnering strategy, offtake arrangements and engagement with government funding schemes
• Arsenal Football Club on a battery storage project with Pivot Power at the
  Emirates Stadium
• UK Infrastructure Bank in relation to a £50m loan to Portsmouth Water. The loan represents UKIB’s first investment in the UK’s water industry, with the proceeds being used to finance the construction of the Havant Thicket Reservoir, Hampshire. The reservoir will help to protect internationally rare chalk rivers by providing additional water supplies and resilience to the South of England, an area with significant risk of water shortages due to climate change and a growing population

Assets with ESG profiles are an increasing portion of the M&A market. We advise a wide range of clients on the key matters, opportunities and decisions needed in the transition to a sustainable future and ensure business continuity and operational resilience whether as part of an acquisition, disposal or joint venture.

Many commercial organisations are looking to the acquisition of new technologies and new ventures as a means of quickly pivoting their existing business to a more sustainable future and our multi-specialist lawyers are equipped to help navigate the various considerations that arise in such a context from addressing due diligence, board responsibilities and advising on the underlying assets and their regulatory environment.

Highlights of our recent experience include advising:

• KKR on the acquisition of Viridor Limited by one of its infrastructure funds for an enterprise value of £4.2 billion. Viridor is one of the UK’s leading recycling and residual waste businesses with a large portfolio of energy from waste facilities as well as landfills
• Schroders on its £385m acquisition of an initial 75% shareholding in Greencoat Capital Holdings Limited, a specialist investment manager focussing on renewable energy infrastructure investing. The transaction supported Schroders in building a comprehensive private assets program and enhancing their leadership position in sustainability
• Daily Mail General Trust on the £1.425bn sale of RMS, its insurance risk business, and leading global provider of climate and natural disaster risk modelling and analytics to Moody’s Corporation
• BlackRock on its consortium investment in Tata Power Renewables, which will house the renewable energies businesses of The Tata Power Company Ltd including those in: Utility Scale Solar, Wind & Hybrid Generation assets; Solar Cell & Module Manufacturing; Engineering, Procurement and Construction (EPC) contracting; Rooftop Solar infrastructure; Solar Pumps and Electric Vehicle Charging infrastructure
• Trill Impact on its acquisition of Delivery Associates Ltd – a global consulting firm that helps leaders in government, philanthropy, and social impact organisations to turn ambitious goals into everyday reality for the people they serve. Delivery Associates is the ninth investment made in Trill Impact’s inaugural buyout fund.