Environmental, Social and Governance (ESG)

Environmental issues continue to anchor the ESG movement, with climate change at the forefront. Recently, however, ESG has come to mean much more. Companies must also navigate internal social issues, such as a company’s labor practices, talent management, product safety and data security; as well as external social issues, such as financial inclusion, community uplift and responsible investment; and governance matters, including board and management diversity, executive pay and business ethics. McGuireWoods’ ESG team prepares clients for next steps in the evolution of their ESG reporting procedures and best practices, as well as the transactions that will give effect to these procedures and best practices.

ESG Services

Our lawyers and policy advisers help clients identify, analyze and integrate ESG concerns and priorities across their operations. Meeting our clients where they are, we draw on the collective knowledge, experience and skills of lawyers and governmental affairs professionals whose practices focus on environmental regulation, climate regulation, corporate governance, investor engagement and communications, public company disclosure requirements, energy, international trade, labor and employment, global investigations, tax policy, cybersecurity and corporate transactions, including public and private offerings and sustainable financings. Our team helps companies evaluate and develop their specific ESG targets, report on ESG issues responsibly and effectively, and create policies and procedures to integrate ESG into daily operations and long-term planning — all while avoiding common pitfalls that can inadvertently lead to unwanted liability risk.  For companies that have already drawn the attention of regulatory scrutiny, our team assists clients in navigating the complex challenges of an investigation and defense of enforcement proceedings.

Our ESG Experience

Companies adapting to these new challenges will see their businesses change and grow, with the wider purposes of meeting myriad governmental goals, such as the United Nations’ Sustainable Development Goals or the United States’ commitment to reduce its greenhouse gas emissions by 50% from 2005 levels by the end of this decade. We partner with clients to seize opportunities and support their businesses through that growth. While clients can always benefit from individualized, one-on-one counseling on ESG issues, we also offer a confidential forum where they can share knowledge and discuss best practices with peers.

Our lawyers are involved from idea incubation, to execution, to evaluation. We provide a wealth of experience, much of which is borne from frontier markets, both in terms of location and in terms of industry. Our lawyers have been practicing in the multiple areas that now comprise what is called ESG for a number of years, and we are prepared to assist our clients with that collective wealth of experience irrespective of where they may be in their ESG journey. Our ESG experience includes:

  • Advised Blackstar Capital as financier on portable solar power financing facility in Cameroon.
  • Advised African Development Bank on $200 million social development facility to a large Kenyan Bank, for regional expansion in Kenya.
  • Advised African Development Bank of $1 billion de-risking instrument relating to pan-continental African agricultural sustainable note issuance.
  • Advised African Development Bank on agriculture de-risking instrument in Ghana, Morocco and Cote d’Ivoire.
  • Advised SeyCCAT on World Bank funding documents for implementation of the World’s first blue bond.
  • Advised CONSOL Energy in its $2.5 million debt and equity investment in CFOAM, an Australian-based carbon material producer.
  • Advised Developing World Markets in the origination, placement and investment of proceeds from a first-of-its-kind off-grid, renewable and climate action (ORCA) note, which provided $60.8 million financing to 11 businesses promoting renewable energy and climate solutions across Latin America, Africa and Asia. 
  • Advised Bank of America in the issuance of a $1 billion corporate social bond to support the fight against the COVID-19 pandemic, the first such offering by a U.S. commercial bank.
  • Representation of an electric utility in first-of-its-kind proceeding seeking approval of utility-scale battery energy storage systems, the largest of their kind in Virginia.
  • Representation of regulated entities with regard to regulation of greenhouse gases under the Clean Air Act, including in the landmark Supreme Court cases of Massachusetts v. EPA and Utility Air Regulatory Group v. EPA, and with regard to the Clean Power Plan, the Affordable Clean Energy rule, and EPA’s regulation of methane from oil and gas facilities.
  • Keeping clients apprised of recent ESG developments and the intersection with environmental justice.

Our ESG Services

ESG Client Forum: Allison Wood and Aaron Flynn lead a client group that provides daily updates on climate and ESG developments, including ESG best practices, ESG reporting standards, regulatory requirements, and legal proceedings and litigation.  The group, which meets monthly to discuss these important issues, includes major electric utility companies and trade associations.

ESG Best Practices and Risk Mitigation: The McGuireWoods ESG team assists companies with development of best practices and formal procedures to minimize risks from both required and voluntary ESG reporting, including measures to ensure company employees speak with one voice on ESG issues and that ESG pledges and public statements are realistic and accurately and appropriately described.

Guidance on ESG Reporting Platforms: McGuireWoods ESG attorneys helps companies choose among the many competing third party platforms for making ESG disclosures to ensure companies use the best tools available. Where reporting platforms rate companies on ESG performance, the McGuireWoods team makes sure companies have policies in place that help them achieve the highest possible scores. When one-size-fits-all reporting platforms do not conform to individual company needs, McGuireWoods helps companies customize their disclosures and prepare appropriate documentation to justify that customization.

Compliance with Financial Regulations: McGuireWoods ESG attorneys advise companies on reporting requirements under Securities and Exchange Commission (SEC) rules and help companies prepare accurate financial disclosures and filings.

Corporate Governance and Investor Engagement: McGuireWoods ESG attorneys work closely with our public company clients on how to formalize board oversight of ESG risk management and ESG company initiatives through corporate governance guidelines and board charters.  We regularly assist our clients with proactive investor engagement on a variety of ESG topics, as well as provide advice on handling ESG topics and questions during earnings calls, annual meetings and road shows.

ESG Shareholder Proposals: McGuireWoods attorneys have a long history of assisting public companies with navigating the shareholder proposal process, including confirming the appropriateness of such proposals under the rules of the SEC, engaging with proponents on possible withdrawal, drafting and submitting exclusion requests to the SEC and preparing management’s recommendations to shareholders on how to vote on such proposals.

Emerging Regulatory Requirements: McGuireWoods attorneys provide companies with analysis and advice on mitigating risks posed by emerging regulations that impact and could potentially govern ESG reporting obligations and related issues, including rules from the SEC, the Department of Labor and the U.S. Treasury. McGuireWoods is well positioned to help clients participate in the regulatory process, through preparation of rulemaking comments and otherwise, to secure a favorable regulatory playing field.

Government Investigations and Enforcement Proceedings:  For over a decade, Fortune 100 companies and high-profile individuals worldwide have called on McGuireWoods’ nationally recognized practice to handle some of their most notable and complex matters before a myriad of regulators, from U.S. congressional hearings and enforcement investigations led by the SEC, the FERC and state attorneys general, to global investigations involving the FCA and the SFO in the U.K.  Our deep bench of lawyers has significant experience with investigations at the intersection of law and politics, including a former Deputy Attorney General of the United States, former U.S. Attorneys, more than a dozen federal prosecutors, and other former senior enforcement officials from key agencies involved in ESG issues, including the SEC and the FERC.

Environmental Justice: Social and environmental considerations intersect in environmental justice, a priority policy item of the Biden administration. The McGuireWoods environmental team advises companies and trade organizations on environmental justice legislation, state law developments and emerging federal regulatory requirements that will impact companies in multiple ways, including facility permitting and project development.

Board Counseling and Regulatory Risk Assessment: McGuireWoods’ ESG team advises companies — including regulated industry, the investment community, and lending and insurance institutions — on the regulatory and shareholder activist risks facing various business sectors, including risks posed by climate-related regulations, corporate governance requirements and social policy addressed by varied authorities such as labor and employment rules. This type of assessment can include evaluation of company ESG products and as-yet-unaddressed risks.

Renewable Energy Projects and Renewable Energy/Environmental Attribute Procurement: McGuireWoods has represented developers, independent power producers, infrastructure funds and utilities in projects in 40 states, totaling more than 27 GW. We have a full-service practice, advising in all aspects of the development, acquisition/disposition, construction, offtake, debt finance, tax equity finance, ownership and operation of renewable energy projects. We have also represented energy supply companies and other large energy consumers in connection with the structuring of physical and virtual power purchase agreements, power hedges, as well as environmental attribute purchase and sale agreements. 

Sustainable Finance: McGuireWoods’ banking and finance lawyers have significant experience advising leading banks and other clients on complex financing transactions, including impact investing, blended finance structures and structured sustainability-linked loans. We advised a leading financial institution in connection with the issuance of a $2 billion bond designed to advance racial equality, economic opportunity and environmental sustainability — the first offering of its kind in the financial services industry.

Derivatives: ESG-linked derivative products enable firms and companies to hedge risks associated with sustainable investments, including project risk, interest rate and currency risks. Our lawyers routinely advise clients — including major financial investment banks, commercial banks, alternative capital providers, corporates and private equity funds — in connection with a range of structural, legal and documentary considerations that arise in derivatives and structured finance transactions across all major asset classes.

Team Leaders

Marc Naidoo

Partner

Full Team

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