What is ESG?
ESG stands for environmental, social, and governance. All three of these issues are becoming increasingly important, as corporates find themselves under greater scrutiny regarding how they conduct their business.
While there is no definitive list of ESG issues, we list here some of the most cited examples:
- Environmental - climate change, carbon emissions, air and water pollution, deforestation, energy efficiency, biodiversity, waste management.
- Social – human rights, freedom of association, terms of employment, working conditions, community relations, data protection and privacy, gender, diversity and inclusion.
- Governance – distribution of rights and responsibilities among directors and officers, managers, shareholders, and other stakeholders, and more generally, how corporate activity is monitored through the implementation of whistleblowing procedures or anti-corruption measures.
A number of countries have introduced – or are looking to introduce – legislation relating to the conditions and circumstances in which corporates do business. Such legislation can cover the corporate itself and those in its supply chain; including suppliers, customers and end-users.
READ THE DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL
While human rights and ethical business practices have not been totally overlooked by developed countries in the past, such issues have certainly attracted more attention recently. Various European Union (EU) states are indicating that they are looking to address such issues and, in some cases, have taken steps towards this, whereas at the EU level, the directive on corporate due diligence and corporate accountability is in the pipeline.
As a result, due diligence regarding ESG issues is becoming a major consideration for the business world. Businesses need to ensure they are meeting their ESG obligations.
Our ESG Expertise
There is now a greater investor focus on ESG law-related issues and more scrutiny of corporations’ accountability when doing business abroad. Rahman Ravelli has developed significant expertise in ESG-related advisory work and disputes regarding human rights-related issues around the globe. Our ESG team is at the forefront of developments in business and human rights litigation in the UK, Europe and the US. We have a “boots on the ground’’ presence in key jurisdictions.
As a result, Rahman Ravelli is well-equipped to help clients both understand the ESG risks they face and proactively devise and manage appropriate strategies. Our expertise is truly international and cuts across business sectors, from telecommunications, technology and crypto-assets to construction, engineering and the extractive sector.
Our team of senior ESG experts regularly provides advice to help organisations build long-term ESG strategies and performs proactive audits to issue targeted recommendations on specific ESG issues.
In addition to ESG due diligence, the firm’s international team uses its cross-border capacity to support clients facing business and human rights-related matters, either pre- or post-transaction or when litigation arises. Rahman Ravelli has forged key partnerships with the best investigation experts in the field. Our team delivers seamless and integrated advice on these emerging issues and helps clients navigate the increasingly complex – and sometimes competing – legal requirements placed upon them.
Our team assists clients with the full scope of ESG issues, including the following services.
ESG advice, due diligence and reporting
Businesses must regularly conduct thorough due diligence into their impact on the environment, human rights and social governance.
There are various moments when corporations may need to conduct such due diligence:
- Before a transaction (acquisition, merger or joint venture), to evaluate and mitigate any potential risk or exposure deriving from that transaction.
- Once a transaction has been performed, to assess the other party’s policies and procedures, and identify and remedy potential wrongdoing or shortcomings.
- On a regular basis, as part of a company’s compliance programme, to ensure compliance with the UN Guiding Principles on Business and Human Rights, or when subject to specific local laws such as the French Duty of Vigilance or the German Supply Chain Act.
- On an ad hoc basis, following a whistleblower alert or negative media coverage relating to issues such as, for example, greenwashing allegations.
Rahman Ravelli provides proactive and preventive ESG and human rights due diligence support to assess any potential legal or reputational risks. We recommend remedial action that is designed to mitigate such exposure.
Crisis management and reputation risk
When a corporation is targeted by human rights or ESG risk-related claims, time is of the essence and a prompt, adequate response is needed. Rahman Ravelli understands that decisions made in these initial stages may have a significant impact on both the company’s business and its legal exposure.
Our team provides the right combination of experts to help companies handle any potential crisis and make the right choice from the outset. We are adept at conducting large, efficient and to-the-point internal investigations, which may span various jurisdictions and involve complex corporate structures.
Business and human rights litigation support
Human rights litigation is gathering momentum throughout Europe, especially in France and Germany, where the first major corporations have been targeted by criminal proceedings for their alleged involvement in the most serious human rights violations (such as complicity in crimes against humanity and aiding and abetting forced labour). The legislative framework increasing businesses’ accountability has been significantly reinforced, with recent years seeing the arrival of the UK Modern Slavery Act, the French Duty of Vigilance Law, the German Supply Chain Act, the Dutch Child Labour Law and the EU draft directive on corporate accountability and corporate due diligence.
NGOs are particularly active in attempting to make corporations accountable for their business activities around the world. The first enquiries have emerged relating to “greenwashing”, with disputes brought before French courts and probes launched by the US Securities and Exchange Commission and the German Financial Market Authority (BaFin).
Rahman Ravelli has a substantial presence in the key jurisdictions that are witnessing the first human rights litigation. It also has a unique insight into multijurisdictional litigation. It can provide clients with comprehensive analysis and representation on all ESG-related matters.
