ESG, Climate Change and Sustainability

Supporting businesses to navigate ESG issues

Environmental, Social and Governance (ESG) issues are central concerns for boards and executive teams, with calls for greater transparency on ESG matters coming from a wide range of stakeholders, and increasing levels of regulatory, compliance and reputational risk. 

Russell McVeagh is a leader in advising on the full spectrum of sustainability and ESG law and policy issues. Bringing together market-leading experts from our specialist areas, we provide tailored, practical advice to help organisations with their governance, risk management, culture and conduct, and compliance needs. 

We support organisations with their ESG transition, through our deep experience navigating change in regulated contexts, and our network of relationships with a broad range of private sector and Government stakeholders. 

Through our alliance with Te Whakahaere climate advisors, we are also uniquely placed to offer a broader range of strategic services in this important and fast-moving space.

We advise boards and executive teams of leading corporates and listed companies, public sector institutions, lenders and investors across a wide range of key areas including:

• Climate-related disclosures and ESG reporting
• Climate and ESG-related policy and regulatory reform
• The emissions trading scheme and voluntary carbon markets
• Sustainable finance 
• ESG-related dispute resolution and litigation, including greenwashing risk
• Human rights and modern slavery
• Te ao Māori
• Impact investing

Widely recognised as leaders in sustainability-linked and proceeds based green borrowing, we are proud to have advised on New Zealand’s first, and largest sustainability-linked loans, and on the issue of New Zealand’s first sustainability-linked bond. 

We also advise key market participants working towards implementing a clean energy transition through climate-related projects, including in relation to solar, wind and hydrogen renewable power.

In 2023 we were delighted to support the Climate Change Commission in its review of New Zealand's climate-related targets. 

Expertise

Climate related disclosures and ESG reporting

We support our clients in all areas relating to climate-related and ESG reporting, including:

• Application of the mandatory climate-related disclosures regime under the Financial Markets Conduct Act 2013;
• Climate-related governance;
• Greenwashing risk;
• Compliance with the Aotearoa New Zealand Climate Standards;
• Regulatory engagement;
• Climate-related record keeping; and
• Director liability and related due diligence processes.

ESG governance and directors' duties

We combine our deep understanding of ESG, climate change and sustainability with our extensive commercial experience to advise boards and executive teams on how these issues intersect with corporate governance responsibilities. This includes advising clients in relation to directors' duties and structuring governance arrangements to support high quality risk and opportunity management and disclosure.

Policy reform and regulation

Our experts are at the forefront of policy and regulatory developments. We guide clients through the complex climate change regulatory environment and help them to engage in the relevant legislative and policy reform in key areas including climate-related reporting and emissions trading, with both local and national government. 

Emissions trading

We advise on compliance under the Emissions Trading Scheme (ETS) across all participant industries, including in respect of reporting obligations and emissions liabilities, alignment with the statutory framework, and regulatory reform. We help clients to ensure smooth and effective unit transfers and allocate liability for regulatory changes, and to structure their arrangements to allow for ease of trading. We also advise clients on emerging issues relating to voluntary carbon markets and alternative forms of sequestration.

Greenwashing

The New Zealand Commerce Commission and Financial Markets Authority are increasingly paying close attention to carbon reduction and neutrality claims, and ‘greenwashing’ advertising representations. We regularly provide practical, tailored advice and support clients with engagement with the Commerce Commission and Financial Markets Authority on enquiries and investigations relating to greenwashing. We are widely recognised as leading experts in this area, with our team acting as counsel in New Zealand's first major High Court greenwashing case.

Climate change disputes and litigation

Climate change litigation is increasing in New Zealand, and our team are experienced across the range of relevant areas including, class actions and judicial review, both of which are fertile ground for climate-related litigation. Our experience in climate-related litigation includes acting on the first climate change-related litigation in New Zealand heard before the Supreme Court (Greenpeace New Zealand Inc v Genesis Power Ltd [2008] NZSC 112). 

Sustainable finance

Our sustainable finance team draws on the expertise of our top-tier banking and finance and capital markets lawyers. We advise issuers, borrowers, and underwriters on the structuring and execution of sustainability linked loans and green and sustainable financing bonds. Our firm has taken a leadership role in the development of market-setting precedents that are used to efficiently implement sustainability-linked loans and structured green borrowing consistent with the LMA/APLMA/LTSA sustainability-linked loan principles and the ICMA green loan principles.

Financing bonds

We act for 50% of the NZX-listed green bonds issuers in the New Zealand market. Notably, we advised on the issue of New Zealand's very first sustainability-linked bond by a corporate organisation.

Impact investing: 

We draw upon our experience in social finance, sustainable finance, funds, iwi, government and leverage finance to help our clients meet their impact investment objectives.

Human rights

Our public law specialists have acted in some of New Zealand’s most groundbreaking human rights cases. We have experience acting for both individual claimants and corporate defendants, at all stages and levels of the judicial system, including the High Court and Court of Appeal. We are uniquely equipped to assist clients when challenges arise.

Modern slavery

While recent proposals to introduce modern slavery in New Zealand are not currently being advanced, we provide advice across the supply chain on responsibilities and best practice relating to modern slavery and supply chain due diligence.   

Te ao Māori

Our specialist practitioners from across our firm provide clients operating in te ao Māori with meaningful solutions regarding corporate and commercial matters, environment and resource management matters, trusts, iwi governance, tax, digital and technology, and public law, as well as delivering passionate advocacy in courts at all levels.
 

Experience

Our cross-practice team advises clients across the spectrum of continually evolving areas, including in relation to:

Reporting, compliance and policy

•      The full range of legal issues relating to New Zealand's mandatory climate-related disclosures regime, including in relation to: the application of the regime to different entity structures; engagement with the regulator, including on exemptions; and, structuring appropriate due diligence processes, director liability, materiality, climate-related record-keeping, climate scenario analysis, greenwashing risk and corporate and director liability.

• Assisting with climate statements and other ESG reporting standards, including: under the NZX’s Corporate Governance Code; the NZX Environmental, Social and Governance Guidance Note; continuous disclosure obligations; and, voluntary reporting standards.
• Compliance under the Emissions Trading Scheme, including in respect of reporting obligations and emissions liabilities, along with regulatory reform in this complex area.
• Compliance obligations in relation to hazardous and ozone-depleting substances.
• The application of competition law to collaboration in the sustainability context, including by advising market participants on how to collaborate on sector-wide initiatives for decarbonisation.
• Commerce Commission and Financial Markets Authority scrutiny in the ESG area, including in relation to carbon reduction or neutrality claims and ‘greenwashing’ advertising representations, and acting on greenwashing-related litigation (e.g. Godfrey Hirst v Cavalier Bremworth).
• Commercial contracting, structuring and M&A in the context of climate-related projects, including facilitating the integration of ESG metrics within legal and project frameworks.
• Assisting clients with Government engagement and legislative reform, including submissions on a wide range of climate-related reform, relevant regulations, the Climate Change Commission’s advice and resource management reform. 

•          Advising the Climate Change Commission in connection with international law and its application in the context of the Commission's review of the 2050 target under the Climate Change Response Act 2002.

• Advising clients in relation to climate change adaptation, including in the context of recent Select Committee inquiries, national adaptation plans and the proposed introduction of managed retreat legislation. 

• Insurance-related matters in the climate change context. 

• Advising clients in the construction sector on sector-specific proposals relating to climate change and ESG, including previously proposed change to the Building Act 2004. 

• ESG implications of previously proposed reforms to the resource management framework, and the current role of climate change under the Resource Management Act, particularly in relation to large scale development projects.

Sustainable Finance

•          Advising leading organisations and banks on sustainable financing, including advising on New Zealand’s first, and biggest sustainability-linked loans, and on the issue of New Zealand’s first sustainability-linked bond.

• KiwiRail on the world-first green loan certification shipping loan, which won ‘Project Finance Deal of the Year’ at the 2022 New Zealand Law Awards. 

• The Local Government Funding Authority (LGFA) on matters of New Zealand law regarding their inaugural issue of unsecured, unsubordinated fixed rate sustainable financing bonds (NZ$1.1 billion). The first of its kind globally. 

• Summerset on a loan facility refinance for approximately NZ$1.2 billion, incorporating a NZ$700 million sustainability-linked loan component.

• ANZ and NAB as joint Sustainability Coordinators for Kathmandu's A$300 million debt facility refinancing, which included the establishment of a syndicated A$100 million sustainability-linked loan facility.

• ASB Bank and Trevelyan's NZ$65 million sustainability-linked loans partnership.

• Meridian Energy on its issue of NZ$200 million of NZDX listed green bonds

• Kiwi Property on the establishment of its sustainable finance framework and green bond programme.

• Kiwi Property on its issues of NZDX listed secured green bonds.

• Goodman Property Trust, New Zealand's largest listed property investor, on its NZ$150 million green bond issuance.

• Argosy Property on the first green bond issuance by a New Zealand corporate.

• Kathmandu (KMD Brands Limited) NZ$310 million sustainability-linked debt refinance, representing KMD's second sustainability-linked loan and first sustainability-linked guarantee. 

• A leading publicly listed electricity generation and retailing company on its issuance of NZ$285 million 30-year unsecured, subordinated NZX listed green capital bonds. 

Human Rights & Modern Slavery

• Advising clients in connection with prior proposals relating to the introduction of modern slavery legislation, and best practice in light of international regimes.
• Acting for BNZ in Court proceedings challenging the termination of BNZ's banking relationships with the commercial and charitable entities forming the Gloriavale Christian Community, on account of those entities' engagement in forced child labour.