Environmental, Social, and Governance (ESG)

We help embed ESG values into the DNA of our clients to enable companies and investors to move beyond greenwashing to contribute meaningfully to a more sustainable and inclusive tomorrow.

Special Feature: Legal Innovation in Impact Investing Report. Read the report by Morrison & Foerster and Impact Capital Managers (ICM) detailing variety of legal tools and processes used by private capital investors to protect and enhance impact investments. Access the full report.

Can you measure the ESG impact of your company in the same way that you measure financial returns to ensure the most efficient use of human and financial capital? What does a “net zero” commitment actually mean and how should you evaluate scope 1, 2, and 3 emissions? Can a purchase of carbon credits, offsets or insets, actually move the needle on climate change—or alternatively can they provide a revenue opportunity through licensing models? Can diversity and inclusion (D&I) representation at the board level translate into meaningful career opportunities for women and employees of color? Is it possible to ensure that impact is retained through private equity investments and M&A?

These are just a few of the questions that we help answer for our clients every day across the Firm. We work side by side with each company and investor to identify the elements of ESG (or to borrow from former Delaware Chief Justice Leo E. Strine, EESG—employee, environmental, social, and governance) that are most material for a particular business and industry. We design expertly tailored strategies to reduce legal exposure and reputation risk and identify unique opportunities for differentiation and financial success.

The old paradigm featuring companies and investors that maximized financial returns for investors and then contributed a fraction of the profits to charity should be dead. Over the past several decades, the “1%” revenue donation model together with the corporate foundation have proved to be ineffective at addressing the major crises faced by business and society today—from climate change to inequality. We help our clients move beyond “philanthropy on the side” by fundamentally changing how investors invest, how companies operate, and how all of us view sustainability. And we do this not just because it is the “right” thing to do, but because without such a shift in policy and practice, companies and investors will find themselves unable to effectively compete, implement successful business strategies, or attract top talent.

As a leader in sustainability and social change for over 20 years, our global team of corporate, finance, tax, patent, and licensing lawyers together with our crack litigation team provide unrivaled experience counseling and advising on ESG matters in the public and private sectors. And we practice what we preach. We’ve ensured values like climate and D+I are core to who we are and how we help our clients and communities. Our partners are at the forefront of the industry as founding board members of Social Accountability Standards Board (SASB) and on the boards of CERES, Business for Social Responsibility (BSR), the United Nations’ Environment Programme Finance Initiative, and the Climate Registry, among others.

We are working hard as a firm to integrate ESG values into our firm’s DNA, and we can do the same for you.

Emerging Companies & Venture Capital

Our global team advises companies and investors on how to use new corporate forms to attract mission-aligned capital, assists with structuring innovative VC/PE equity and debt investments to advance both profits and impact, and counsels investors and companies regarding impact reporting standards, metrics, and best practices.

M&A

Our leading global Private Equity and M&A transactional practice offers our clients creative tools to maintain impact throughout the business lifecycle. Whether examining Task Force on Climate-related Financial Disclosures (TCFD) climate risk scenario analysis in diligence, performing due diligence and impact assessments, or performing reverse diligence on acquirers to determine whether there is mission alignment, we continue to be the “go-to” firm for impactful and cross-border deal-making. We assist our clients with creating D&I investment strategies, “carve-out” investments and M&A when assets are held by a nonprofit/public charity, and tools to maintain impact, including the application of the “sweet pill”; all while measuring and benchmarking performance related to impact goals and the United Nations Sustainable Development Goals (UN SDGs).

Private Equity

We assist clients with the full range of private equity matters, ranging in scope from initial fund formation and compliance, to minority and control investments, and leveraged buyouts. We create long-term relationships with clients to ensure their sustainable investment strategies reflect the impact goals central to their missions. We collaborate with our clients to analyze ESG and UN SDGs investment strategies while overseeing investments in, and management of, portfolio companies.

Fund Formation

Our lawyers regularly assist clients in providing mechanisms for investment funds to focus on ESG factors, tailoring our recommendations based on the social and environmental missions of the firm and its investor base. We structure collaborations between fund sponsors and impact-focused organizations for the provision of technical expertise, and utilize our advisory experience in connection with investment decisions and portfolio oversight.

ESG Investigations & Compliance

From shedding light on ESG policies to providing guidance on corporate governance and reporting, we help business leaders govern proactively and responsibly while aligning with disclosure requirements and new integrated ESG reporting guidelines. Our team helps clients assess local and enterprise-wide human rights, supply chain, and labor issues, and develop and conduct impact assessments to avoid operational and legal risks. We work hand in hand with local legal and business teams to shape and implement risk assessments from within the business, and develop recommendations to avoid or mitigate losses from such risks.

Hybrid/Tandem Structures

Many impact-focused clients have relied on our team to create sophisticated “hybrid” or “tandem” structures with nonprofit and for-profit entities that are closely tied through equity ownership, funding, or contracts. We have helped clients scale their missions through creative structuring, such as establishing a joint venture between a for-profit and nonprofit, structuring a fund using both for-profit and nonprofit entities, establishing a nonprofit subsidiary of a for-profit, establishing donor-advised funds, and many other iterations.

Public Company ESG/Disclosure

Our lawyers counsel clients on the entire gamut of public company ESG disclosure requirements and corporate governance matters, including the formulation of proxy responses to shareholder ESG proposals, board fiduciary duties, compositions and practices for the oversight of ESG issues, and shareholder engagement, including shareholder activists and shareholder advisory firms. We help our clients create tailored impact assessment frameworks, including benchmarks and measurement standards to meet impact goals.

Public Securities ESG

We are regularly called on to advise issuers and investors on ESG-related and sustainable capital markets activities, including registered and private offerings of sustainable financial instruments and products such as green bonds and impact investment securities such as payment for success bonds and social impact bonds, among others. Our team provides intelligence and pro bono thought leadership on emerging sustainable capital market issues.

Technology Transactions

Our technology transactions lawyers counsel clients on a variety of technology and IP-related transactions, including M&A, software and information technology licensing and procurement, patent licensing and monetization, outsourcing arrangements, and development, collaboration, joint ventures, and distribution deals, which intersect with impact and ESG. We offer in-depth counseling on developing and licensing IP to address climate change, capturing future carbon emissions reduction value in license fees, and adding licensing terms to capture emissions reduction value associated with each company’s respective technology, to name a few.

Debt Financing

Our debt financing lawyers assists clients with structuring and documenting creative loan structures, including low-interest or forgivable loans from nonprofits, foundations for for-profit entities, and loans that maximize foundation and nonprofit grant funds. Our work also includes credit facilities that permit several foundations or nonprofits to use aggregate funds for mission-driven ESG loans, among others. We work with capital facilities to fund ongoing mission-driven ESG activities, such as programs to finance microloans or home solar installations, and a variety of other financing arrangements in developing countries to fund critical infrastructure and other social projects.

Sustainable Finance (Green & Impact Bonds)

In addition to a highly regarded pro bono and trade association thought leadership, our partners advise on loan and bond matters related to current market trends, including the latest developments in documentation and new forms of loans, and development and evolution of market standards, including guidelines such as the LMA Green Loan Principles. We also counsel our clients on regulatory regimes at the intersection of ESG disclosure and sustainable financing.

Energy

Our Energy + Infrastructure Group provides full-service legal representation across every facet of the multidimensional energy and infrastructure landscape. We assist clients with structuring financing vehicles for renewables and energy efficiency social impact projects, and drafting and reviewing power purchase agreements, construction contracts, operation and maintenance agreements, thermal host agreements, fuel supply agreements, wind leases and easements, and construction and permanent financing documents, among others. Our partners regularly share their knowledge on carbon sequestration technology, requirements to measure “additionality” and carbon emissions reduction at the project company level, new regulatory frameworks for energy markets, and purchases and sales of renewable energy projects as well as the energy generated from those projects.

REIT

We are often called on to advise management and boards of directors on ESG best practices, support our clients’ annual publication of ESG and sustainability reports for public stockholders, advise issuers on transactional matters including green bond offerings, and manage investor relations input relating to ESG matters.

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