Strelia : ESG

BUILDING A JUST AND SUSTAINABLE ECONOMY TOGETHER

Sustainability. ESG. These have become strategic drivers for global organizations, companies, financial institutions and investors in an increasingly complex business environment. With the ESG landscape changing rapidly and sustainability expectations rising sharply, all stakeholders are keen to play an impactful role in building a just and sustainable economy.

Navigating the constantly evolving reporting requirements and regulatory aspects of ESG—which differ significantly across sectors and jurisdictions—can be a challenge. From climate neutrality and sustainable finance to adverse human rights impacts in chains of activities and understanding corporate purpose, integrating ESG considerations into business as usual and transforming aspirations and targets into actions demand comprehensive and effective ESG guidance.

Strelia’s interdisciplinary ESG Team has a clear grasp of each ESG factor and their risks. We can guide you in the right direction at all times. By drawing on our experience across practices, we provide comprehensive, strategic legal advice on every ESG aspect to support our clients’ transition to building a more just and sustainable economy.

Strelia’s interdisciplinary ESG Team has the insights, knowledge and experience in a wide spectrum of subject-matters. Our ESG counselling goes beyond risk management and compliance.

Sustainable and ESG-focused Corporate Governance

Boardrooms need to be proactive, prepared, and purposeful when driving positive change from the top to pursue ESG goals. We advise boards, C-suite, and ESG (oversight) committees, and guide them in their efforts to integrate ESG factors into their corporate strategies, policies, and decision-making. We do this by assisting them in drafting and implementing sustainability objectives, policies, and practices.

Sustainable M&A

Heightened scrutiny of ESG issues certainly has a marked impact on transactions such as mergers and demergers, disposals, acquisitions, JVs, and IPOs. We provide the following services:

Assessment and management of ESG-related risks and opportunities;
Conception ofESG-related policies, codes of conduct and contractual clauses (cascading clauses);
Scanning transactions to identify potential and actual adverse impacts throughout the chain of activities;
Conducting ongoing human rights and environment due diligence and impact assessments;
• Advising how to effectively integrate ESG factors into the existing transactional ecosystem;
Assisting with drafting required ESG reports and voluntary public communication.

Sustainable Finance

We advise lenders, issuers and impact investment funds on all aspects of sustainable finance, from corporate green loans (or bonds) and sustainable chains of activities financing to financing renewable energy projects.

Human Capital Management

The ‘S’ in ESG is the factor that truly focuses on the human element of a company’s approach to sustainability and ethical impact. Whereas the ‘E’ (Environment) examines how a business performs as a caretaker of our natural environment and ‘G’ (Governance) is about how a corporation governs itself, ‘S’ (Social) examines how a company treats its people. The Social factor concentrates on employee engagement & relations, health & safety, non-discrimination, training & education, community impact, diversity & inclusion, labour standards and human rights, pay and working conditions transparency, executive pay linked to ESG targets, whistleblowing, etc. It is therefore one of the higher-ranked items on any company’s agenda. With ESG factors being the subject of new national and EU legislation and regulations that entail reporting and disclosure obligations, among others, companies are increasingly relying on experts in these subject matters.

We assist clients in human capital management by enabling them to understand their human rights risk profile as well as that of their business partners. And this covers the assessment of risks associated with labour, health & safety, and environmental practices throughout supply chains.

Sustainable Real Estate

ESG matters in real estate. The ‘E’ (Environment) factor concerns the use of recycled or recyclable materials, pollution and purification, carbon offsetting, waste treatment and management, promotion of soft mobility (bicycle parking provision, EV charging stations, etc.), and energy efficiency of buildings through energy performance certificates, as well as other certification procedures (BREEAM, LEED, etc.). The ‘S’ (Social) essentially concerns the health and well-being of tenants but also the surrounding community. Social aspects in real estate include the active participation in the rehabilitation of public spaces, affordable housing, social housing or care centers, as well as the adaptive re-use of existing construction developments. For commercial real estate, the ‘G’ factor (Governance) has less to do with individual assets or portfolios, and more to do with how a business is structured and led, and how decisions are made. It therefore encourages real estate developers, owners, and other stakeholders to operate their business in a responsible, transparent, and inclusive manner. Because good governance practices impact a company’s ability to build investor, tenant, and community trust.

We advise a wide range of real estate players on developing and applying an ESG strategy, especially when drafting and negotiating agreements or submitting permit applications. We also advise them on ESG when they structure transactions and operate companies.

Sustainability and Administrative Law

Regarding sustainability and administrative law, the criteria for awarding public contracts, public procurement projects and matters, and administrative claims and actions have become more and more driven by ESG considerations.

We assist public entities in drafting tender documents that factor in all appropriate ESG requirements. Private-sector clients rely on us as well to guide them in meeting contracting authorities’ ESG expectations and requirements.

Sustainability and Competition Law

Competition law can hinder companies when they collaborate with each other on bona fide climate and wider sustainability initiatives. Clients are increasingly seeking our advice on the interplay between competition rules and their sustainability goals. For example, they turn to us for practical guidance on competitor collaborations, M&A and merger control, State aid, and consumer law issues.

When it comes to combating climate change, we work together with our energy experts. We help clients pave the way towards achieving carbon neutrality, for example, by advising them on investments in green and blue hydrogen, zero-power generation, and offshore wind. Moreover, we counsel clients to help them navigate The European Green Deal, The Paris Agreement, and the New Circular Economy Action Plan.

ESG-related Litigation

Since the mid-1990s, ESG-related litigation has been on the rise. This trend has increased considerably in recent years, as a result of regulatory efforts to better protect the environment and human rights, and to combat climate change. It will only be reinforced in the future with the legalization of the UN Guiding Principles on Business and Human Rights both at the European and national level - with respectively the draft Directive on corporate sustainability due diligence and, in Belgium, the bill introducing a duty of vigilance and a duty of responsibility on the part of companies throughout their value chains.

Claims have so far been made in the context of different strategies and based on a variety of legal grounds, such as breach of duty of care (Lubbe v. Cape, Milieudefensie v. Royal Dutch Shell), breach of duty of vigilance (Notre Affaire à Tous v. BNP Paribas, ClientEarth v. Danone), protection of the environment and consumer rights (Dieselgate class actions), greenwashing (Carbon Market Watch v. FIFA), climate neutrality (Lauwrys v. Province of Antwerp), CSR policies and public communication (Vert v. G-Star Raw, Lungowe v. Vedanta Resources).

We advise our clients on their exposure to ESG-related litigation risks, and assist them throughout the procedure if a dispute should nonetheless arise by seeking the best possible outcome.

Sustainable Tax Strategies

Tax is a featured fiscal tool for identifying ESG risks, challenges, and opportunities.

While many corporate and individual taxpayers in the past might have had to mitigate the tax consequences of their business transactions or private estate management, the growing awareness of ESG factors and sustainability has led to a broader taxation approach. Concepts such as fair taxation, base erosion, profit shifting, tax evasion, or green tax are certainly not new, but they will need to be addressed from now on in a global picture that incorporates ESG factors.

As your trusted advisors, we are keen to help you integrate ESG as early as your corporate or transactional structuring phase and beyond.

Strelia’s ESG interdisciplinary ESG Team is headed by Gisèle Rosselle, Head of Strelia’s Corporate/M&A practice.

We are eager to listen to your needs and challenges, and to discuss how we can guide you effectively on your ESG journey.

ESG Series