Environmental, Social and Governance (ESG) and Sustainability

Our attorneys take a proactive, holistic, and solutions-based approach to meeting clients’ needs. We advise a broad spectrum of fast-moving clients, including private equity firms, financial institutions and public and private corporations, on the full suite of ESG-related challenges.

We advise on all dimensions of a sustainability strategy to help generate financial returns and preserve environmental and social capital. This includes international regulatory compliance, disclosure and reporting, sustainable finance, transaction support, governance considerations, board oversight, crisis management, and dispute resolution.

Clients seek our help in navigating a range of evolving needs, including:

• Compliance with a growing and increasingly diverse global regulatory landscape (including climate-related disclosure requirements in California and those adopted by the SEC, as well as EU regulatory regimes such as CSRD, SFDR, Taxonomy Regulation, CBAM, and the UK TCFD)
• Navigating voluntary sustainability reporting, including in the selection of frameworks and disclosures relating to climate and other sustainability goals
• For private funds, calibrating sustainability and climate-related commitments and approaches, advising sponsors on the formation of sustainability-focused and impact funds, and balancing evolving investor expectations and reporting requirements
• Conducting comprehensive, customized and targeted due diligence, including in the context of M&A and financing activities
• Developing and strengthening internal and external policies, procedures and governance structures
• Advising issuers and underwriters on green, social and sustainability-linked bonds, loans, and other sustainable financings, including on the drafting of sustainable finance frameworks and governing documents
• Pre-IPO, helping companies position themselves to reflect sustainability strategies and evaluate their relative strengths and opportunities
• Advising on stakeholder engagement, including regarding ESG-related shareholder proposals
• Responding to litigation and enforcement risk within the context of company-sponsored activity, business relationships and disclosures (including green/social washing claims and transnational litigation and disputes)
• Review board practices and effectiveness, including board assessments

…and more—often novel—considerations.

Our priority is to be a partner to our clients in getting ahead of sustainability-related risks while identifying opportunities to grow enterprise value and increase stakeholder trust.

Some of our long-standing partnerships with clients in this space include advising:

• Mars, Incorporated in its Rule 144A/Regulation S offering of $2.5 billion of Senior Notes, including an inaugural offering of sustainability notes
• Cisco Systems, Inc. (NASDAQ: CSCO) in its acquisition of Splunk Inc. (NASDAQ: SPLK) for approximately $28 billion in equity value
• KKR in the first U.S. sustainable use-of-proceeds syndicated subscription finance facility for the KKR Global Impact Fund
• Blackstone in its acquisition of Cvent Holding Corp., an industry-leading meetings, events and hospitality technology provider
• CAVA in its $340 million IPO, covering a broad range of ESG-related matters including ESG strategy and peer benchmarking
• Blackstone in its acquisition of International Gemological Institute, a leader in independent certification of diamonds, gemstones and jewelry
• TPG Capital, L.P. in its acquisition of AmSpec Group, Inc.
• Apax Partners LLP in its acquisition of Bazooka Candy Brands
• Underwriters in a sustainability bond offering by Pfizer, the first ever sustainability bond issued by a biopharmaceutical company
• Sponsors, as fund counsel, in the formation of multiple ESG/impact funds, including sustainable energy funds, and the European Union Sustainable Finance Disclosure Regulation

In addition to partnering with clients in their day-to-day, our ESG team supports clients by publishing a monthly sustainability and ESG regulatory update, compiling a global regulatory database to facilitate clients’ compliance with a growing suite of global applicable legal and regulatory frameworks, and creating a 50-state ESG state tracking tool covering key pro- and anti-ESG measures.

We also issue regular client alerts and communications focused on ESG and sustainability issues.

Simpson Thacher’s long-standing commitment to sustainability and corporate responsibility—including our deep involvement with the Natural Resources Defense Council as a pro bono client for nearly 50 years—benefits our diverse range of clients. As a responsible member of the global community, we have implemented environmentally sound Firm policies across our offices.

This alert details developments in U.S. ESG regulation, particularly as individual states have stepped up their lawmaking through drastically different approaches. It further explores these approaches to ESG-focused legislation and offers high-level takeaways on ESG investing and contracting on the state level.