ESG: a key element of responsible business conduct for all our clients

We are witnessing a fundamental shift of values that is here to stay.

Ensuring responsible and sustainable business conduct that meets societal ESG demands has definitively moved from the reputational and stakeholder management area to legal. In a shifting landscape, NautaDutilh’s Sustainable Business & Climate Change team identifies the risks and opportunities, working with clients on future-proof solutions for the complex and interconnected challenges of responsible business conduct. We help our clients by joining forces with all stakeholders. And by proactively bringing our exten-sive knowledge and cross-sectoral experience to the table. We discuss not only the dot on the horizon, but also what may be found round corners. Areas of expertise include ESG risks and opportunities, climate change litigation, sustainable finance, and busi-ness human rights law. We regularly discuss recent developments in this field with cli-ents in roundtable settings and organise client events on a wide range of topics relating to sustainable business and climate change.

  • Sustainable business

    It may be legal, but is it right? As companies feel increasing pressure from all stakehold-ers to act responsibly, responsible business conduct has firmly established itself as a top priority for boards and management. We believe that its importance as differentiator that adds value to brands, increases long-term profitability and mitigates financial, legal and reputational risks will grow in the years to come. Businesses will find that their so-cial license to operate will increasingly depend not only on what they do, but also on how and why they do it.
    Responsible business conduct permeates all business operations. It begins with the integration of ESG principles and corporate governance because the tone at the top is of consequence. The role of in-house legal counsel will grow as soft law frameworks and human rights will increasingly yield ‘hard law’ by which corporates and their boards will be held accountable. Transparency in communication, product information and report-ing matters.
    Ultimately, responsible business conduct strengthens shareholder value. Responsible business conduct is the best measure to maintain access to capital from institutional investors and financial institutions, who apply increasingly rigorous vetting of compa-nies on non-financial criteria.
    In order to help clients gain insight into how ESG principles benefit the company, our team of experts speaks with the board and other stakeholders throughout businesses to discuss possible long-term scenarios, assess ESG related business risks and provide recommendations to mitigate these risks. We have developed an ESG Opportunity Audit through which we are able to assess how ESG policies can help clients to capture commercial opportunities and positively distinguish themselves from their competitors.

  • Climate change & climate change litigation

    Climate change, the energy transition, the huge mitigation and adaption efforts that will be required to combat the worst-case scenarios in the course of this century and the re-sulting resource scarcity are going to reshape our world. For many companies, climate action has become a business imperative. It requires multinationals and financial insti-tutions to reimagine business models and reinvent their interaction with employees, shareholders, suppliers and customers.

    Legal issues around climate change go beyond compliance and risk mitigation. For those companies that want to be part of the solution, climate change is also about oppor-tunity. Our firm wants to be active on the frontlines in the fight against climate change. The law can be an instrument for change.

    In the financial sector, regulators are increasingly outspoken with respect to the climate risk responsibilities and reporting obligations of financial institutions. Clients benefit from our firm’s unparalleled experience in regulated markets. Our financial law team regularly advises financial institutions on the regulatory aspects of climate change. Our loan finance team is helping lenders and borrowers to structure green finance deals. They have extensive experience on getting banks comfortable with regulatory uncertain-ty, specific business risks associated with decentralised renewable energy projects and forging the security packages that fit such projects.

    Our Dispute Resolution team members are considered trailblazers in climate litigation, setting legal precedents for government accountability for climate change. We success-fully represented (together with Höcker Advocaten) the Dutch NGO Urgenda before the Dutch Supreme Court in the landmark case against the Dutch government. The Su-preme Court confirmed that the Dutch government has a binding legal obligation, based on international human rights law, to take measures to reduce carbon emissions. “This landmark ruling provides a clear path forward for concerned individuals in Europe – and around the world – to undertake climate litigation in order to protect human rights,” commented United Nations High Commissioner for Human Rights Michelle Bachelet in her reaction to the Urgenda judgment.

  • Business human rights

    Responsible business conduct entails that companies view adherence to human rights throughout their business value chain as a key element of their governance. Not re-specting human rights is not only a severe reputational risk. Adverse human rights im-pacts can also lead to extensive legal liability. It requires businesses to implement poli-cies aimed at mitigating human rights compliance and litigation risks into their daily op-erations. The legal dimension can include supply chain issues, contractual obligations, regulatory requirements and reporting guidelines. In the context of an M&A transaction, an ESG due diligence can be an important means to assess risks and opportunities. Our multidisciplinary team oversees the full field of work and works with our clients not only to do things right, but also to do the right thing.

  • Highlighted work

    We regularly advise financial institutions, corporate clients and NGOs in the field of sus-tainable business, ESG and climate change. If needed, we litigate on behalf of our cli-ents before domestic and European courts. We also work together with various govern-mental authorities, regulators and network organisations, including the Dutch Associa-tion of Banks (NVB) and the Dutch Private Equity and Venture Capital Association (NVP).

    Highlights include:
    • Representing Dutch NGO Urgenda in its landmark climate case against the Dutch government
    • Assisting de Volksbank with the issuance of EUR 500 million subordinated Tier 2 bonds, the first issue of this type of green bonds by a bank in Europe
    • Acting as transaction counsel in the first green and social bond issuance in Bel-gium, issued by Cofinimmo, the first European REIT to issue green and social bonds
    • Advising various clients on the implications of the proposed Dutch Child Labour Due Diligence Act
    • Advising impact investors Invest-NL on the implementation of ESG clauses in joint funding agreements
    • Advising Royal Dutch Shell on various matters relating to the implementation of a global access to energy project
    • Assisting GOGLA, the industry organisation for off-grid energy solutions, with the updating of their ESG policies

  • What others say

    • Frans van der Eerden “is an excellent adviser who takes a lot of effort to pro-actively approach his clients and to stay involved with them. He cares!” (Legal 500, 2020)
    • Lauded as an "excellent guy" by his peers, Harm Kerstholt specialises in energy contracting and M&A transactions (Chambers Europe, 2016). Harm is listed as one of the 10 most innovative legal practitioners in the 2020 FT Innovative lawyers report for his efforts to integrate ESG principles and 'soft laws' into his energy practice.
    • Jens Mosselmans "is very knowledgeable" and “a fantastic expert in procurement and genuinely lovely to work with" (Chambers Europe, 2020).
    • Freerk Vermeulen is recognised as a "very good Supreme Court lawyer" (Chambers Europe, 2019). Interviewees say: "He is down to earth, practical, pragmatic and has a very good track record." (Chambers Europe, 2016)

The team specialises in

  • CSDDD advice and contract review

    The Corporate Sustainability Due Diligence Directive (CSDDD) aims to foster sustainable and responsible corporate behaviour throughout global value chains. Our Corporate Governance team advises clients on how the directive applies to their chain of activities, as part of an ESG Audit or as a separate legal service. Our Contract team assists clients in implementing their ESG strategy and incorporating CSDDD requirements into material contracts.

    Our team of experts can:

    • Advise on the application and scope of the due diligence obligations
    • Advise on potential litigation risks and protection against CSDDD-based claims
    • Review contracts with partners and suppliers to align agreements with CSDDD obligations
    • Draft and adjust partner and supplier contracts for compliance with ESG strategy and CSDDD compliance
  • ESG Audit

    In an ESG Audit, we map the regulatory requirements and case law, set out how and when ESG regulation applies and provide guidance on compliance and litigation risks. With this, we tailor the scope to the needs and priorities of the individual client. An extensive audit can encompass governance, litigation and reporting as well as contracting aspects.

    Our team of experts can:

    • Review sustainability governance - this includes a review of corporate documents, your company’s disclosures and other relevant documentation and interviews with key function holders
    • Perform an ESG related gap analysis on corporate reporting: Corporate Sustainability Reporting Directive (CSRD), annual report and Corporate Governance Code
    • Review and assist in drafting mandatory and voluntary disclosures
    • Review risk allocation and responsibility regarding ESG issues in contracts
  • ESG Due Diligence in M&A transactions and investments

    ESG Due Diligence provides an overview of how the target’s ESG performance rates against the applicable legal framework, including future regulation and soft law. Our ESG Due Diligence is aimed at determining whether, from a legal perspective, the target company is subject to ESG-related risks. It covers the E, the S and the G; enabling companies to include non-financial considerations and legal implications in their decision making.

    Our team of experts can:

    • Assess the target’s ESG policy
    • Review liability and reputation risks resulting from ESG non-compliance, human rights infringements, and climate change mitigation measures
    • Assess the extent to which the board weighs non-financial considerations in investment decisions
    • Advise on integrity risk management, including anti-money laundering (AML) compliance, corruption, internal processes, safe working environment, harassment, social risks and other elements regarding supply chain management
    • Review non-financial disclosures and associated risks around (potential) greenwashing and misleading ESG claims
  • ESG and Real Estate

    The real estate and infrastructure sector plays a vital role in the energy transition. Real estate funds, financers, contractors, developers, and other stakeholders are faced with the challenge of changing regulations to build greener infrastructures.

    Our team of experts can:

    • Assist in sustainable real estate and infrastructure transactions
    • Advise on sustainable real estate and infrastructure financing, including the review and drafting of documentation
    • Draft real estate contracts, including specific provisions on ESG-related elements of real estate objects
    • Provide regulatory advice on energy-related aspects of infrastructure and real estate projects
    • Provide public procurement advice
    • Advise on property law aspects of renewable energy
    • Assist on all aspects of dispute resolution, including litigation risk assessment, advise on risk mitigation strategies and represent you in all tiers of the judicial system and in arbitration
  • ESG disclosures - SFDR, Taxonomy and CSRD

    Since the SFDR introduction in 2021, we assist investment fund managers, asset managers, insurers, pension funds and financial advisors with their ESG-disclosures. In 2022 respectively 2023, the Taxonomy Regulation and the Delegated Regulation under the SFDR entered into force. As of 2024, further ESG-disclosure requirements will become applicable under the CSRD. We help our clients stay up to date with the developing regulations (including the CSDDD) and prepare the relevant disclosures.

    Our team of experts will:

    • Draft and review SFDR disclosures such as product documentation, fund prospectus and
    • Principal Adverse Impact (PAI) statements
    • Advise on and draft periodic reports under SFDR
    • Advise on, draft and review ESG-disclosures in the annual account statements
    • Assist in the integration of ESG preferences in KYC processes under the Financial Instruments
  • ESG litigation

    Stakeholder groups increasingly use litigation – and the threat thereof – to impact an organisation’s ESG strategy and communications. At the same time, investors, regulators and society are closely scrutinising organisations’ sustainability policy and targets as well as the action they undertake – or fail to undertake – to achieve these targets. Against this background, it is important for clients to understand their liability and litigation risks and to ensure that their strategy and documentation are up to standard. This does not only pertain to business lines that have an apparent impact on our environment but applies in general and in respect of specific projects or relationships.

    Our team of experts can:

    • Provide representation in all tiers of the judicial system, including the Supreme Court, the European Court of Justice and arbitration
    • Assist in developing and drafting ESG-related policies
    • Identify litigation risks: assess potential risks, for instance relating to climate policy, climate disclosures or supply chain liabilities
    • Assess ESG liability: advise on ESG-related liabilities
    • Advise on mitigation strategy, including stakeholder engagement
  • ESG project funding

    We see that many of our longstanding clients as well as new clients and initiatives are creating innovative ESG-related projects and have strong appetite for sustainable finance projects.

    Our team of experts can:

    • Negotiate and draft funding documentation (LMA and other) for sustainable projects, with ESG-related targets translated into financial conditions of the funding structure
    • Provide extensive expertise on sustainable mortgages – we are partner to the Dutch Energy Efficient Mortgage Hub
    • Set up sustainable investment and impact funds (including all corporate and tax structuring aspects) and draft ESG-related documentation
    • Advise on the structure and documentation pertaining to renewable energy and energy transition project funding
  • Energy transition-related matters

    Moving to a low carbon economy requires a broad expertise. From energy law and regulatory topics such as EU ETS, health & safety requirements, and environmental regulations to real estate and project finance expertise. The regulatory framework does not always meet the needs of new technologies, and changing regulations require constant vigilance from board members and legal counsel.

    Our team of experts can:

    • Assist in complex licensing procedures
    • Assist on all aspects of dispute resolution including litigation risk assessment, advise on risk mitigation strategies and provide representation in all tiers of the judicial system as well as arbitration
    • Advise on regulatory frameworks for renewable energies
    • Advise on property law structuring, contracting and permitting with respect to sustainability-linked projects
    • Advise on project finance deals and corporate M&A transactions in the energy sector
    • Structure and negotiate transition projects in public-private partnerships
    • Advise on strategic issues that entail potential reputational risks
    • Advise on competition law aspects
  • Green bonds and sustainability-linked bonds

    Debt instruments that are specifically earmarked to raise funds for - or refinance - climate and environmental projects are increasingly popular with investors. We have a strong track record advising issuers, underwriters, and project developers on green bonds, sustainability-linked notes and other financing products that serve ESG purposes.

    Our team of experts can:

    • Advise on structuring and issuance of green and sustainability-linked bonds
    • Review and draft applicable bond documentation and related agreements
    • Draft the prospectus and ensure market standard disclosures
    • Assist with the prospectus approval process
  • Greenwashing

    Litigation risks posed by greenwashing are on the rise, focussing on parties that may fail to take action to mitigate climate change. The Taxonomy Regulation, the MiFID II framework and other transparency regulations play an important role in this. Banks and investments firms must integrate ESG-related preferences in their services to their clients, while being able to rely on the information published by their target investment companies. The proposed Consumer Empowerment Directive and the Green Claims Directive further underline that meeting ESG is definitively moving from the reputational and stakeholder management area to legal.

    Our team of experts can:

    • Identify potential greenwashing risks
    • Assist in drafting disclosures to mitigate greenwashing risks
    • Review client documentation with a view to potential greenwashing claims
    • Assist in actual or potential greenwashing-related litigation
  • Hydrogen-related matters

    Hydrogen and fuel cell technologies have significant potential to enable the transition to a clean, low-carbon energy system. We assist our clients across the full spectrum of this developing sector, from the ‘engineer, built and operate phase’ of new infrastructure, to designing new trade and certification models, and evaluating existing hydrogen supply chains and strategies.

    Our team of experts can:

    • Provide regulatory advice
    • Advise on subsidies and taxation aspects
    • Advise on permits
    • Help you understand real estate law aspects of hydrogen businesses
    • Draft and review project finance documentation, corporate and finance structuring
    • Draft and review documentation in hydrogen-related M&A transactions
    • Advise on competition law aspects
  • Integrating ESG into governance

    The governance structure plays an important role in implementing ESG strategies. By actively promoting sustainability goals and accounting for ESG issues, companies build stakeholder engagement and trust, and show social and environmental accountability. Factors such as board expertise and independence, shareholder rights and leadership effectiveness throughout the company’s operations are critical to success. The 2022 Dutch Corporate Governance Code regards an ESG strategy as part of a vision of long-term value creation.

    Our team of experts can:

    • Advise on the solid integration of ESG in corporate governance
    • Advise on developments in corporate governance and ESG requirements
    • Provide ESG training for board members and the organisation
  • Product as a service

    Circulaire ondernemers met een Product-as-a-Service (PaaS)-bedrijfsmodel kunnen bij ons terecht voor juridisch advies over de contracten met hun klanten. Wij bieden een kant en klaar juridisch PaaS-contract toegespitst op de specifieke kenmerken van het circulaire PaaS-bedrijfsmodel van de ondernemer. Wij staan ondernemers bij die hun PaaS-contract juridisch willen laten toetsen dan wel een nieuw contract willen laten opstellen. Het kan gaan om business-to-business en business-to-consumer bedrijfsmodellen, voor zowel roerende als onroerende zaken. Niet alleen gevestigde (PaaS-) ondernemers maar ook bedrijven die in de startup fase zitten kunnen bij ons terecht.

    Indien u gebruik wilt maken van of vragen heeft over onze Legal PaaS-desk, kunt u een e-mail sturen aan Sjoerd Meijer, managing partner bij NautaDutilh en hoofd van onze Legal PaaS-desk via Wij nemen contact met u op voor een afspraak met onze experts.

    U vindt alle informatie over onze Legal PaaS-desk in ook in het Legal PaaS-deskoverzicht.

    Wat is PaaS?

    Bij Product-as-a-Service als bedrijfsmodel vindt een verschuiving plaats van bezit naar gebruik: de PaaS-ondernemer blijft eigenaar van het product en de klant neemt het product als dienst in gebruik. De PaaS- ondernemer blijft verantwoordelijk voor onderhoud en reparaties, neemt het product na gebruik weer terug en zorgt ervoor dat de materialen zoveel mogelijk worden hergebruikt. Voorbeelden van PaaS- bedrijfsmodellen zijn deelfietsen en deelauto's, lift-as-a-service en ICT hardware-as-a-service. Steeds meer ondernemers stappen over op een circulair bedrijfsmodel. Hiermee dragen zij bij aan de circulaire economie die erop is gericht dat producten en onderdelen hun waarde behouden en grondstoffen worden hergebruikt.

    Wat bieden wij?

    Binnen de PaaS-bedrijfsmodellen kunnen we diverse verdienmodellen onderscheiden, namelijk pay-per-use, verhuur of een abonnement, koop-terugkoop, lease, en hybride vormen. Deze verdienmodellen zijn lastig te vertalen naar goede contractuele afspraken met de gebruiker. PaaS in al zijn verschijningsvormen past namelijk niet binnen standaard juridische constructies als huur, koop en lease. In de praktijk blijken de contractuele afspraken tussen de PaaS-ondernemer en zijn klanten dan ook vaak van onvoldoende juridische kwaliteit. Dit brengt risico's met zich mee, die een financieringsinstelling, meeneemt in de afweging die zij maken om al dan niet tot financiering over te gaan.

    Highlighted work

    Ons PaaS-team is in februari 2022 gestart met een pilot in samenwerking met ABN AMRO, de PaaS-helpdesk. PaaS-ondernemers die een financieringsaanvraag hebben lopen bij ABN AMRO kunnen voor juridisch advies over het PaaS-contract met hun klanten bij onze Legal PaaS-desk terecht. Deze samenwerking is in eerste instantie een pilot voor de duur van 6 maanden.

  • Regulatory enforcement

    The European Central Bank (ECB) and the local prudential authorities have urged banks, insurers and pension funds to make swift improvements in translating their ESG strategy into the business operations. Failing clear results, the regulators will likely resort to more formal regulatory actions. The Dutch AFM and the Belgian FSMA have similar expectations, but also look at ESG disclosures and potential greenwashing in general. The 2022/2023 European Consultation on Greenwashing will likely trigger regulatory enforcement and product assessments and investigations.

    Our team of experts will:

    • Assist in the implementation of ECB/EBA and local regulators expectations
    • Share knowledge in ESG expert sessions for C-level executives and tailored sessions
    • Advise board members on ESG-related requirements and regulatory screening processes
    • Assist in updating and drafting the internal governance documentation
    • Perform regulatory surveys – how to respond to ESG-related information requests from the regulators
    • Handle regulatory enforcement matters – how to respond to potential enforcement action in case of an alleged breach of ESG rules

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