ESG – Environmental Social Governance

Sustainable finance or sustainability in the financial sector refers to the consideration of environmental, social and governance aspects in the decisions of financial market players with the aim of channelling capital into sustainable investments.

Integrating ESG factors into corporate processes and at product level represents an enormous challenge for the financial market, not least because of the extremely dynamic regulatory environment and the increasingly complex volume of legislation. Market players must try to navigate this regulatory jungle, as the public is calling for sustainable financial products and this trend is set to continue and rise.

Our sustainable finance experts can advise you on all aspects to be taken into consideration and also on complex legal issues, with a particular focus on:

• Company- and product-related disclosure requirements under the Sustainable Finance Disclosure Regulation (SFDR) and the Taxonomy Regulation
• MiFID II (sustainability preferences)
• Sustainability reporting (CSRD)
• Solvency II reporting
• EU Green Bond standards
• Benchmark Regulation
• Development of ESG strategies for financial products (in particular, structuring of alternative investment funds in the areas of real estate, infrastructure, renewable energy, private equity and debt)
• ESG advice on project and corporate finance transactions (in particular in the area of renewable energy)

Net zero is the target. For the transition to a sustainable economy, a particular focus is on the producing industry. Textiles, food, cosmetics, pharmaceuticals, electronics – the development, production, distribution and disposal of products have an enormous impact on the environment. The focus on protecting human rights varies a lot around the globe. This is why European and national legislators are currently using all regulatory measures to ensure that product life cycles and international supply chains, become entirely “green”.

We advise our clients on the new, complex regulatory compliance obligations arising from the EU Green Deal and how to contractually implement these obligations throughout the supply chain to minimize the liability risks. In the event of a dispute, we represent our clients before public authorities and in court. This concerns, for example:

• German Act on Corporate Due Diligence in Supply Chains (LkSG) and Corporate Sustainability Due Diligence Directive (CSDDD)
• Deforestation-free supply chains (EUDR)
• Ecodesign (ESPR)
• Right to repair (R2R)
• Sustainability reporting (CSRD)
• Packaging and Packaging Waste (PPWR)
• Battery Regulation (BATT2)
• Forced Labour Regulation (FLR)

No change without (institutional) claimants. With public awareness growing and legal ESG requirements becoming stricter, the responsibility of companies and their management is increasingly in the fore. Companies are faced with a growing number of claims due to, for example, insufficient product communication or ESG reporting. In addition to the financial risks, such actions are also the focus of media attention.

We can advise and represent you on all ESG disputes before state courts and arbitration tribunals, for example:

• Climate change litigation
• Disputes regarding environmental change, environmental pollution and biodiversity
• Disputes regarding human rights violations (responsibility for the supply chain)
• Defence against “greenwashing” claims
• Defence against claims by investors and shareholders
• Management liability (ESG compliance)
• Investment protection cases (green investments)
• Mass litigation due to climate change, environmental offences or emissions problems