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"You don't need to have 20/20 vision to see that the year ahead will be challenging…"

Writing for Practical Law, Senior Counsel John Buttanshaw and Partner and Head of Risk & Operational Regulatory Doug Bryden, take a look at how environmental, social and governance (ESG) issues may arise and be addressed in transactions, with a particular focus on private equity mergers and acquisitions. 

The UK government and regulators have jointly announced their approach to implementing the recommendations of the Taskforce on Climate-related Financial Disclosures within the next five years. Notable by its absence is any explicit mention of the EU Sustainable Finance Disclosure Regulation which comes into force in March 2021.

Asset owners, as well as intermediaries in the financial services sector, are becoming increasingly proactive in their pursuit of sustainable finance strategies. This is often driven by a genuine desire to move towards more ethical and responsible investment; but increasingly, it is also a necessary commercial response to the demands of clients.

Sustainability is rising rapidly up the pensions agenda because of a mix of changing law, regulatory guidance, and growing demand from pension scheme members and other stakeholders.

Sustainable finance is of rapidly-growing importance as increasing regulatory pressures and demand from investors promote the incorporation of environmental, social and governance (ESG) factors in investment strategies.

Sustainability, CSR environmental, social and governance (ESG) and other responsible investment considerations are now firmly on the agenda for corporates as well as investors. Keeping abreast of the increasingly broad legal and regulatory framework governing these issues, as well as managing reputational risk, represents an enormous governance challenge for businesses.

ESG considerations are increasingly a priority for investors, developers, landlords and occupiers.