Environmental, Social, and Governance Considerations in M&A: Mitigating ESG Risks, Maximizing ESG Benefits
Due Diligence, Reps and Warranties, Preserving ESG Attributes Post-Closing
Course Details
- smart_display Format
On-Demand
- signal_cellular_alt Difficulty Level
- work Practice Area
Commercial Law
- event Date
Thursday, December 17, 2020
- schedule Time
1:00 p.m. ET./10:00 a.m. PT
- timer Program Length
90 minutes
-
This 90-minute webinar is eligible in most states for 1.5 CLE credits.
This CLE course will examine environmental, social, and governance (ESG) issues, which should be taken into account in M&A transactions, including areas of particular importance in ESG due diligence and the allocation of ESG risk in acquisition agreements. The panel will also discuss how best to integrate ESG policies and procedures post-closing.
Ms. Mulry focuses on environmental and sustainability matters. She advises a broad range of domestic and international clients, including public and private companies, developers, private equity firms, global organizations, and governments, on environmental matters in complex corporate transactions, environmental regulatory compliance, and climate change issues. Ms. Mulry’s practice involves advising companies on sustainability risks and opportunities, including with regard to board oversight, internal management policies, and external reporting. Prior to joining the firm, she practiced environmental transactional law at another major U.S. law firm in New York and served as a Postdoctoral Research Fellow at the Sabin Center for Climate Change Law at Columbia Law School.
Mr. Sherman’s practice focuses on issues affecting business growth for companies at all stages, including developing strategies to leverage IP and technology assets, as well as international corporate transactional and franchising matters. He also counsels clients on such issues as M&A, joint ventures, strategic alliances, capital formation, and distribution channels. He is the author of numerous books and articles on these and related topics.
As a member of the firm’s mergers and acquisitions team, Mr. Massony helps guide clients through difficult and complex negotiations over corporate transactions and commercial contracts. He has experience representing a wide variety of public and private companies in corporate matters, including domestic and international mergers, stock and asset acquisitions and dispositions, private equity investments, public and private offerings of debt and equity securities, corporate restructurings and corporate governance.
ESG concerns are becoming increasingly important in M&A transactions. There is increased focus for deal counsel to understand and address key ESG risks and their potential impact on the target and the acquiring company's long-term value. ESG risks can include environmental, health and safety, and human capital management practices, regulatory noncompliance, shareholder activism or litigation, and reputational harm.
ESG is increasingly becoming a key component of M&A due diligence. Boards are now tasked with overseeing climate change and other environmental risks, employee health and safety, pay equity, diversity, data security and customer privacy, consumer and product safety standards, disaster recovery and crisis management, corporate governance, and the ethical operation of the target's supply chain.
To mitigate against ESG risks, buyers should require ESG-specific representations and warranties in the acquisition agreement. These can range from customary representations and warranties on matters such as legal and regulatory compliance, accuracy of securities filings, employee matters, and so-called "Weinstein clauses" regarding sexual harassment. Buyers should also consider procedures for integrating ESG standards and protocols post-closing.
Listen as our authoritative panel discusses the new focus on ESG risks in corporate acquisitions and how to address these issues in due diligence and M&A and other documentation.
- Rising significance of ESG in M&A: relationship to long-term valuation
- New regulatory risks associated ESG
- Due diligence
- Evaluation of ESG governance and management policies and practices
- The relevance of ESG factors to the target's industry and operations
- Identifying current ESG risks, including shareholder actions or third-party claims
- Reps and warranties and other contractual approaches to mitigating ESG risks, maximizing ESG benefits
- Assessing ESG "fit" between acquirer and target; post-closing integration and governance
The panel will review these and other key issues:
- Why has ESG become more relevant in evaluating a prospective target for acquisition?
- What should be the primary areas of focus when conducting ESG due diligence?
- How should ESG be addressed in the acquisition contract or other documents?
- What are best practices for integrating the ESG standards and practices of two merging companies?
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