As the push towards ESG-focussed business practices gains momentum, Asian law firms are playing a vital role in guiding clients through the complex regulatory landscape, helping clients identify regulatory risks and potential opportunities, as well as providing legal protection and solutions. In this inaugural ranking, ALB spotlights 15 law firms that are delivering exceptional legal services in the ESG space.
As the world becomes more conscious of the impact of business practices on society and the environment, there has been a growing interest in environmental, social and governance (ESG) standards. And with the push towards ESG-focussed business practices gaining momentum, companies are now having to consider an ever-expanding range of ESG factors.
At this time, law ﬁrms are stepping up to provide crucial guidance to clients navigating the complex landscape of regulatory obligations and potential opportunities. They are playing a vital role in ensuring companies can effectively integrate ESG considerations into their decision-making processes.
One such example is Singapore’s largest law ﬁrm, Allen & Gledhill (A&G), which works with companies to identify regulatory and reputational risks in climate change matters.
Among other work, the law ﬁrm is helping clients navigate the Energy (Resilience Measures and Miscellaneous Amendments) Act 2021 in Singapore. The Act enables the Energy Markets Authority to implement policies to reduce greenhouse gas emissions in generating, transmitting, importing, exporting, or supplying electricity.
“We support our clients in every step of their ESG journey. Our strengths are in advising organisations on how ESG-related matters translate into legal risks and obligations, as well as providing legal structuring, protection and solutions for our client’s ESG needs,” says Elsa Chen, partner, and co-head of the ESG and public policy practice at A&G.
The firm says it established the world’s first carbon exchange and marketplace using satellite monitoring, machine learning and blockchain technology to enhance carbon credits’ transparency, integrity, and quality.
“We also advised the Monetary Authority of Singapore (MAS) on the inaugural issue of S$2.4 billion ﬁxed rate bonds due 2072 under the Government of Singapore’s medium-term note programme. The bonds are Singapore’s inaugural sovereign green bonds and mark an important milestone in Singapore’s sustainability journey,” says Chen.
Indonesia’s ARMA Law is another ﬁrm helping clients navigate the ESG regulatory landscape.
“In assisting on projects, we advise our clients to consider the ESG aspect in the legal, due diligence stage, including financial accountability, local supplier partnership, emission measurement and reduction, commitment to maintaining high conservation values and high carbon stock, community empowerment and human rights protection for the local community that affected for such project.”
— Rudi Bachtiar, ARMA Law
“We work closely with clients in various industries, from carbon projects, climate tech, electric vehicles, the renewable sector, and manufacturers. In assisting our clients, we provide insight into ESG aspects, including economic, environmental, social, and good corporate governance,” says Rudi Bachtiar, partner at ARMA Law.
Since 2020, ARMA Law has assisted developers with nature-based solutions and forest conservation projects.
“In assisting such projects, we advise our clients to consider the ESG aspect in the legal, due diligence stage, including ﬁnancial accountability, local supplier partnership, emission measurement and reduction, commitment to maintaining high conservation values and high carbon stock, community empowerment and human rights protection for the local community that affected for such project,” says Bachtiar.
For most law ﬁrms advising clients on ESG, the landscape is becoming increasingly complex due to the fast-changing regulatory environment, coupled with macroeconomic changes.
Due to this, law ﬁrms are roping in multi-disciplinary experts to offer all-rounded advice to their clients.
“Our uniquely multi-disciplinary ESG and public policy team, consisting of lawyers, economists and other professionals with decades of experience advising clients on all areas of legal matters, ESG issues, and overall government affairs management,” says Chen.
Most countries across Asia are becoming more conscious of ESG, resulting in law ﬁrms developing capabilities across practice areas and geographies to help their clients.
“We have, in our partnership, widely recognised leaders in multiple legal disciplines, e.g., antitrust, anti-corruption, banking and ﬁnance, building and construction, capital markets, data privacy, employment, environmental laws, ﬁnancial regulatory, health and safety, and more, which ESG issues cut across. We have a strong regional network in Singapore, Malaysia, Vietnam, Indonesia, and
Myanmar, which allows us to support clients whose ESG objectives transcend jurisdictions in Southeast Asia, providing them with an integrated and seamless service,” says Chen.
Even as law ﬁrms guide clients through the complex web of regulations and help them implement environmentally responsible policies, they encounter several issues that require assessing and mitigating risks.
In Indonesia, for example, the last six months have been active for law ﬁrms advising clients on ESG.
The government has developed ESG regulations, and policies like the Sustainable Investment Guidelines launched by the Indonesian Capital Investment Coordination Board during the G20 meeting in Bali are intended to be a reference for business actors, investors, and policymakers regarding sustainable investment, says Bachtiar.
Apart from that, the Government of Indonesia also submitted the enhanced National Determination Contribution (NDC) from 29 percent to 31.89 percent (unconditionally) and from 41 percent to 43.2 percent (conditionally).
Meanwhile, the Ministry of Environment and Forestry Regulation No. 21 of 2022 regarding the Guideline of Carbon Economic Value is Indonesia’s most important regulation for developing carbon trading and emission reduction, says Bachtiar.
With these policy developments, ARMA Law continuously advises its clients on several strategic assessments.
This includes conducting internal due diligence on the clients’ ESG policies by performing due diligence to identify potential legal risks and liabilities.
“We assess some critical aspects in the current ESG aspects based on the above latest development and the UN SDG impact standards, including the client’s supply chain, carbon emission reduction, waste management, consumer protection and decent work living, and legal and social aspect in the land acquisition process,” says Bachtiar.
Apart from that, the law ﬁrm is also assisting its client in developing ESG-related policies and procedures that align with the current development of ESG laws and policies. “We also inform our clients regarding the latest development of emission reduction policies to anticipate the upcoming regulation outlining the company’s commitment to reduce greenhouse gas emissions,” says Bachtiar.
ARMA Law also assists its clients in engaging with the relevant stakeholders, including investors, shareholders, government authorities, and NGOs, in addressing ESG-related legal risks and enhancing the client’s reputation, says Bachtiar.
Social issues such as human rights, labour practices, and diversity and inclusion have also become important considerations for companies seeking to enhance their ESG performance. Law ﬁrms have played a vital role in ensuring that clients are aware of their social responsibilities and are taking proactive steps to address them.
Take the Indonesian law ﬁrm UMBRA, for example. The law ﬁrm recently represented a client – an employment welfare platform provider company – in a dispute with its two former workers regarding alleged trade secret violations (2022).
“In response to the ESG concerns, we immediately disclose the meticulous legal actions and alternatives to the client. For example, we provided one of our clients, an employment welfare platform provider company, with criminal and civil legal steps against its former employees who are in violation of business competition, trade secrets, and customer databases. We also laid out the advantages and the disadvantages of the legal steps thoroughly,” a spokesperson for UMBRA says.
In most cases, law ﬁrms tend to take a holistic approach in advising their clients on their ESG journey, says Chen.
“ESG risks involve a combination of hard and soft laws, and the legal landscape around ESG issues is still evolving. With our multi-disciplinary approach, public policy experience, and broad range of expertise, we understand our clients’ business, their stakeholders, and the regulatory environment. This enables us to provide them with an all-rounded perspective and allows us to advise not only on the matter at hand but to plan for contingencies and help shape the landscape into one that caters to our clients’ evolving ESG needs,” says Chen.
Mitigating risks often include assisting clients in disclosing ESG-related information to their shareholders.
“We help our clients to achieve their ESG goals through our legal advisory for projects and activities that may be used to fulﬁl their sustainability reporting compliance. We ensure our client’s business activities meet the sector’s compliances and assist them in expanding their ventures in businesses and markets to help them achieve their ESG goals,” says Bachtiar.
Law ﬁrms are also taking a proactive approach to ESG disclosure.
“We advise clients on their sustainability reporting obligations, board sustainability policies and terms of reference for their management sustainability committees. We also assist in benchmarking their disclosures against peers and industry best practices within and outside of Singapore as a proxy for emerging regulatory expectations and legal trends,” says Chen.
“A particular development is that of companies increasingly being scrutinised and held accountable for greenwashing by regulators, non-governmental organisations, other stakeholders, and the public. It is now more so critical than ever that companies closely review their public sustainability disclosures, as well as disclosures to customers, lenders, insurers, and other stakeholders, to ensure accurate information and
to mitigate against misrepresentations.”
— Elsa Chen, Allen & Gledhill
As ESG frameworks and legal risks become increasingly complex globally, A&G advises clients on supply chain due diligence issues, the risk of their sustainability goals and disclosures impacting their non-ESG legal obligations, and the risk of ESG-related litigation or enforcement.
“A particular development is that of companies increasingly being scrutinised and held accountable for green-washing by regulators, non-governmental organisations, other stakeholders, and the public. It is now more so critical than ever that companies closely review their public sustainability disclosures, as well as disclosures to customers, lenders, insurers, and other stakeholders, to ensure accurate information and to mitigate against misrepresentations,” says Chen.
As investors, clients and employees increasingly prioritise sustainability and ethical practices, Asian law ﬁrms can enhance their reputation and competitiveness by embracing ESG goals internally.
“Beyond providing legal advice on ESG, we also understand the need for our ﬁrm to “walk the talk,” and to hold ourselves to the same standards that we advise our clients to do so,” says Chen.
A&G undertook a comprehensive seven-month-long sustainability audit on the ﬁrm, involving colleagues across all levels, says Chen.
“The results of the audit provided benchmarks of how we could do better, and internal focus groups helped to shape new goals and policies within our firm. Through these efforts, we developed our A&G sustainability roadmap. We pledged to be a sustainable organisation, and we have committed to, among others reducing our carbon footprint, increasing community engagement & pro bono work, as well as ensuring proper governance across all aspects of our operations. We were also the ﬁrst law ﬁrm in Singapore and Southeast Asia to be admitted into the United Nations Global Compact (UNGC) as a signatory member in July 2021,” says Chen.
Doing so has helped the firm understand the pain points and innovative solutions the clients need when implementing ESG policies and the potential issues that may arise, says Chen.
ARMA Law is on the same page. As the importance of ESG issues has grown, the ﬁrm has set a few ESG goals and is committed to integrating ESG considerations into its operations.
“We just launched our ESG and Climate Change Practice Group to enhance the capability of our lawyers to equip them with ESG and climate change regulations and policies, and we are establishing ESG Policies, including diversity and inclusion and ethical business practices,” says Bachtiar, who adds that the ﬁrm supports ESG-related initiatives such as special fee arrangements for NGO clients.
ALB ASIA’S TOP 15 ESG LAW FIRM 2023
ALLEN & GLEDHILL
BEN MCQUHAE & CO
LEE & KO
NAGASHIMA OHNO & TSUNEMATSU
RAJAH & TANN SINGAPORE
SULLIVAN & CROMWELL
UMBRA – STRATEGIC LEGAL SOLUTIONS