ESG and Carbon Finance

Overview

Increasingly, over time our clients integrate environmental, social and governance (ESG) factors in their everyday business operations, strategies and risk mitigation processes. They are doing this with the goal of obtaining a competitive advantage and preserving and increasing their profitability.

For example, investing in environmentally-friendly renewable energies will reduce clients’ operating costs and allow them to reduce their carbon footprint thereby avoiding the negative financial impact of any future carbon tax. It will also protect clients against possible higher and more volatile fossil fuel prices. Adopting inspired ESG workplace practices (such as an equity/diversity and inclusion policy) will increase an employer’s attractiveness in a tight labour market made of younger employees coming from diverse backgrounds and having more and more ESG-aligned values. Producing or manufacturing goods that are sustainable will guarantee the longevity of a client’s business and attract new customers while increasing sales volume and profits.

At the same time, today the ESG label is everywhere and some critics say that it is little more than a marketing gimmick. At Miller Thomson, we believe otherwise and are committed to engaging all of our expertise and savoir faire to help our clients tackle their transition to a more sustainable world where ESG means preserving profits by making investments in sustainable technologies and avoiding losses from corporate governance lapses caused by failing to identify financial risks associated with climate change. Adopting and implementing a sustainable strategy is as fundamental as the digitalization shift recently undergone by many companies.

Our ESG and Carbon Finance Group can help you address the growing expectations of the outside world resulting from the emergence of ESG requirements and practices – from boards, investors, regulators, employees, customers, vendors, and communities. Our clients are increasingly being asked by these stakeholders to show leadership on ESG issues or they risk being punished for lack of transparency and compliance. For example, central bankers, securities and pension funds regulators are all flagging the risks of climate change. Social media activists are driving up public attention and driving down share prices of companies that are offside. Global protests and activist investors are demanding that companies work to create a more sustainable world. Activist investors and other stakeholders are finding their claims have legal basis in courts. Allegations of false advertising or ‘greenwashing’ have led to judgments that have become the topic of conversation in the public domain. Major investment funds are highlighting sustainability as a core investment focus. Media outlets are exposing that the gender gap can no longer be ignored. Industry led organizations are adopting “soft-law” measures to force disclosure and convince their members to adopt more sustainable business practices. Finally, governments around the world are paying attention – using regulation to change market behaviour and imposing punitive and restrictive measures to force the adoption of sustainability. In such an environment, companies that are proactive will benefit from a competitive advantage while their competitors will still be in a reaction mode.

Effective ESG Advice for C-Suite

The corporate governance landscape is rapidly evolving in the face of internal and external pressure from investors, stakeholders, shareholder activists, and regulators for more ESG-focused governance models. Miller Thomson’s ESG and Carbon Finance Group can assist boards of directors, C-Suite executives, executive leadership teams, chief legal officers, general counsels, chief sustainability officers, risk management teams and business managers in developing and implementing strategies to consider, manage, and report on challenges and opportunities related to ESG and Carbon Finance and sustainability in general.

Helping Entrepreneurs Execute Green Strategies and Clean-Tech Ideas

Increasingly ambitious and entrepreneurial founders are developing new ventures and technologies to produce renewable energy, reduce greenhouse gas emissions, capture and store carbon dioxide, improve environmental sustainability of existing facilities or provide other climate-related solutions. These new endeavours face a wide range of novel legal and regulatory issues ranging from corporate structuring, capital raising, shareholder relations, securities regulatory and market design considerations to drafting carbon removal agreements, dealing with carbon tax issues, and other intellectual property issues – all of which require a thorough understanding of the industry and expert counsel to navigate these new sustainability trends.

Delivering Full-Service Sustainability, ESG and Carbon Finance Advice All in One Shop

At Miller Thomson, the ESG and Carbon Finance Group provides fully integrated multidisciplinary legal services from professionals located across the country and who are recognized as Canada’s leading specialists in sustainability, ESG and carbon finance. We come together as a group to advise our clients on key environmental, social and governance aspects of their business involving climate-aligned mergers and acquisitions, investments in the clean energy space, understanding the intricacies of carbon finance, designing and drafting a bespoke equity/diversity and inclusion policy suited for your specific business (by way of illustrative examples only). Armed with our proprietary Green Transaction Execution Protocol, our transaction teams can complete your M&A transaction with a reduced carbon footprint (we are certain your VP Sustainability or Procurement Office will love it). We even went to the extent of redrafting our contractual boiler plate clauses so that they are now climate aligned. Helping you understand the legal implications resulting from adopting and publicizing a net-zero target and preparing for potential greenwashing class-actions are examples of our expertise. Most importantly, we understand ESG risks and opportunities and bring you the greatest value, by offering the full suite of legal and business services all under one banner.

If your business involves:

  • environmental regeneration, biological diversity and carbon sequestration;
  • sustainable tourism;
  • regenerative and collaborative agri-food models;
  • sustainable mobility;
  • transition and energy productivity;
  • regenerative and resilient design and construction;
  • circular economy and industrial symbiosis;
  • sustainable innovations; or
  • sustainable trades and services,

Miller Thomson ESG and Carbon Finance Group can help you achieve your sustainable goals.

Driving Differentiation and Value Creation

At Miller Thomson, we can help you not only understand the risks of environmental, social and governance inaction but how to turn these risks into opportunities for differentiation. Coming out of a pandemic, facing uncertain economic times and as part of Canada’s affirmed ambitions to cut greenhouse gas emissions, your stakeholders will expect you to be even more engaged in ESG practises. Moving forward, corporate leaders have the opportunity to take the lead by meeting these expectations and bringing sustainable business models rooted in ESG principles to market. We believe in the importance of doing business differently – and the evidence increasingly confirms that companies that demonstrate a strong commitment to ESG are outperforming their competition on key financial metrics such as financial performance, market evaluation and shareholder value creation.

Providing the Sustainability, ESG and Carbon Finance Legal and Business Services You Need

Miller Thomson’s lawyers can help you across the full ESG spectrum. Below is a snapshot of some of the legal services that our integrated service team can offer you:

Environment

M&A and Corporate Strategy

  • Advise potential targets and prospective buyers (issuers, funds, and financial institutions) in acquisitions and divestitures and M&A decision-making, including the selection of targets, due diligence, integration and corporate governance with a focus on ESG compliance.
  • Advise on integration of ESG strategies in investment policies, governance structures, and decision-making roles for private equity firms, investment funds and other privately held entities such as family offices.
  • Advise on the impact of ESG issues on project structures, financing terms and financing sources particularly in the internation joint-venture space and export-oriented Canadian clean-tech companies.
  • Design climate change and ESG due diligence questions so that your procurement team can appraise your suppliers approach to climate-related risks and impacts and determined how such supplier’s align with your own climate strategy all this with the view of decarbonizing your supply chain.

Sustainable Finance /Carbon Finance

  • Advise sustainability, ESG and clean-tech focused clients to take advantage of emerging opportunities in the capital markets and in the green or sustainable finance world through, for example, a listing on one of the recognized “green” boards of a stock exchange, the issuance of green, social or sustainable bonds or sustainability linked bonds, or the negotiation of a green or blue loan.
  • Design, draft and implement an ICMA or CBI compatible sustainable bond framework, helping in the selection of a suitable second-party opinion provider, crafting the offering memorandum or prospectus disclosure required for such offering to take place, including customizing the risk factors sections for the risks associated in the offering of such use of proceeds debt instruments.
  • Advise on the post issuance reporting on proceeds and impact required of such green or sustainable debt offering.
  • Draft climate risk related disclosure to be incorporated in an issuer offering and continuous disclosure documentation and helping clients stay current with the flux of proposed sustainability disclosure standards.
  • Work with clients to engage institutional and activist funds and other stakeholders in respect of ESG-related matters.
  • Advise on financing, regulatory, and development issues relation to battery storage, carbon capture storage, renewable natural gas projects (in each of the municipal and agricultural domain) and green-hydrogen projects.
  • Assist you with the development surrounding the implementation and understanding of the proposed climate disclosure rules of the Canadian Securities Administrators, the International Sustainable Standard Board or the disclosure model of the Task Force on Climated-Related Financial Disclosure.
  • Assist you with understanding the emerging disclosure standards related to nature-related risks and opportunities such as the one proposal by Taskforce on Nature-related Financial Disclosures.

Social

  • Advice on diversity, equity and inclusion (DEI) policies, including issues related to racial equality, and practices regarding the makeup of senior management and board of directors, and the gender gap and helping in the training of employees with respect to DEI.
  • Help clients address challenges and opportunities on stakeholder issues such as employees, suppliers, customers, human rights, supply chain, and working conditions.
  • Advise companies, for-profit social enterprises, not-for-profit organizations and hybrid entities on impact finance, related governance issues and fund formation.
  • Advise on issues impacting relations with Indigenous communities, including community consultation and engagement, joint venture negotiation, project support, impact benefit agreements and engaging with local and Indigenous communities.
  • Draft indigenous procurement and recruitment policies.
  • Assist large organizations in managing and complying with anti-bribery and corruption legislation in the jurisdiction they operate throughout their supply chains.
  • Assist companies in assessing their suppliers’ compliance with human rights and modern slavery issues.
  • Assist investment fund in the design of human rights policy with respect to their investment portfolio and the due diligence required for the implementation of such policy.

Governance

  • Advise executive management, board of directors, pension fund trustees or committees on fiduciary duties and best practices for overseeing ESG matters, including EDI or climate/sustainability disclosure committee mandates, governance designs as well as responding to say-on-climate shareholder proposals.
  • Advise public and private companies on ESG disclosure framework developed by the International Sustainability Standard Board, the Task Force on Climate-related Financial Disclosure, the Taskforce on Nature-related Financial Disclosures, the Global Reporting Initiative or the Canadian Securities Administrators dealing with climate and sustainability and related disclosure considerations.
  • Advise on integration of ESG metrics into governance matters such as board composition, executive compensation, and stakeholder engagement including peer group analysis and benchmarking assessments
  • Design and implement a net zero whistleblowing policy to incorporate wider environmental protections into a company’s whistleblowing regime all in line with the company’s adopted policies and target on net zero.
  • Advise on best practice related to ESG issues arising out of governance policies, codes of conduct and compliance programs.
  • Provide ongoing educational and training to directors and officers of public companies and institutional investors and trustees of pension funds or member of pension fund committees about ESG, including how to address questions and comments raised by proxy advisory firms such as ISS and Glass Lewis.

Your national team dedicated to ESG and Carbon Finance is available to answer any questions you may have regarding our services or our firm in general. Feel free to reach out to one of our national group leads.

Announcing Miller Thomson's ESG and Carbon Finance Practice

Read the press release about the launch.

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MT BiosphereTM

Read the latest issue of our ESG and Carbon Finance Communiqué.

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