Environmental, Social 
& Governance Law 2021
A practical cross-border insight into ESG law
First Edition
Featuring contributions from:
BAHR
Bowmans
Brown Rudnick LLP
Galicia Abogados, S.C.
Grimaldi Studio Legale
Haynes and Boone, LLP
Herbert Smith Freehills
Herbert Smith Freehills LLP
Herzog Fox & Neeman
Macfarlanes LLP
Mannheimer Swartling 
Advokatbyrå
Maples Group
Nagashima Ohno & 
Tsunematsu
Schellenberg Wittmer Ltd
Stikeman Elliott LLP
SustainAdvisory
Travers Smith LLP
Wachtell, Lipton, Rosen & Katz
Wolf Theiss

Table of Contents
Q&A Chapters
34
Australia
Herbert Smith Freehills: Heidi Asten, Timothy Stutt 
& Jacqueline Wootton
43
Austria
Wolf Theiss: Sarah Wared, Florian Kusznier &  
Claus Schneider
48
Canada
Stikeman Elliott LLP: Vanessa Coiteux, Ramandeep 
K. Grewal & Catherine Grygar
57
79
Israel
Herzog Fox & Neeman: Janet Levy Pahima, 
Liat Maidler & Daniel Kaczelnik
71
Italy
Grimaldi Studio Legale: Riccardo Sallustio
SustainAdvisory: Francesca Fraulo
63
Ireland
Maples Group: Peter Stapleton, Ronan Cremin & 
Jennifer Dobbyn
Japan
Nagashima Ohno & Tsunematsu: Kiyoshi Honda
92
97
Norway
BAHR: Svein Gerhard Simonnæs, Asle Aarbakke & 
Lene E. Nygård
104
Poland
Wolf Theiss: Marcin Rudnik & Joanna Gąsowski
112
South Africa
Bowmans: Ezra Davids & Ryan Kitcat
119
Sweden
Mannheimer Swartling Advokatbyrå: 
Patrik Marcelius, Cecilia Björkwall & Joel Palm
126
Switzerland
Schellenberg Wittmer Ltd: Christoph Vonlanthen, 
Lorenzo Olgiati, Fabio Elsener & Giulia Marchettini
Expert Chapters
1
7
16
Moving Forward With ESG: Considerations for Boards and Management
David M. Silk & Carmen X. W. Lu, Wachtell, Lipton, Rosen & Katz
Incorporating Sustainability into Debt and Equity Financing
Emma Russell, Emily Fuller & Deborah Low, Haynes and Boone, LLP
ESG and Litigation: The Outlook for Shareholders and Listed Companies
Ravi Nayer, Razzaq Ahmed & Tom McDonnell, Brown Rudnick LLP
12
28
ESG and UK Pension Schemes: Challenges and Opportunities
Andy Lewis & Jonathan Gilmour, Travers Smith LLP
ESG and Corporate Strategy: A Cross-Sectoral View
Rebecca Perlman, Silke Goldberg & Iria Calviño, Herbert Smith Freehills LLP
136
United Kingdom
Macfarlanes LLP: Tom Rose & Olivia Seeley
USA
Wachtell, Lipton, Rosen & Katz: David M. Silk & 
Carmen X. W. Lu
85
Mexico
Galicia Abogados, S.C.: Mariana Herrero, Maurice 
Berkman, Carlos Escoto & Lorena Kiehnle Barocio

Environmental, Social & Governance Law 2021
Chapter 19
126
United Kingdom
Macfarlanes LLP
Olivia Seeley
Tom Rose
United Kingdom
1.2	
What are the main ESG disclosure regulations?
The UK’s main ESG disclosure regulations are set out in the 
Companies Act, the UKCGC and the DTRs.
In particular, section 172 of the Companies Act requires direc-
tors of UK companies to have regard (in discharging their duties) 
to, among other things, the interests of the company’s employees, 
the need to foster business relationships, the impact of the 
company’s operations on the community, the environment and 
its reputation for high standards of business conduct.  However, 
while these matters must be considered when undertaking the 
director’s primary duty, which is to promote the success of 
the company for the benefit of its shareholders, they are effec-
tively secondary to that primary duty.  In other words, the UK 
is currently a jurisdiction that effectively mandates shareholder 
primacy in directors’ discharge of their duties, albeit in parallel 
with a need to consider other stakeholders at the same time.
The Companies Act requires large and medium-sized compa-
nies (measured by reference to turnover, balance sheet total and 
number of employees) to publish an annual strategic report.  The 
report must set out information on various ESG-related items, 
such as the impact of the business on the environment, disclo-
sures around the company’s employees, social, community and 
human rights issues, and the company’s policies in relation to 
each of those matters.  If the company’s securities are traded 
on a particular securities exchange (for example, the Main 
Market of the London Stock Exchange plc (the “LSE”)) or if 
it is a “public interest entity”, the Companies Act requires the 
report to contain a “non-financial information statement”.  This 
overlaps considerably with the content requirements already 
described, but additionally covers respect for human rights, and 
anti-corruption and anti-bribery matters.  Finally, the legisla-
tion requires large companies to include a separate statement in 
their report explaining how, in the financial year in question, the 
directors took the matters described above into account when 
fulfilling their duties under section 172 of the Companies Act.
In addition, all companies (except the very smallest) must 
prepare an annual directors’ report.  Large companies must include 
information in their directors’ report on how, during the financial 
year in question, the directors had regard to the need to foster the 
company’s business relationships with suppliers, customers and 
others and, if the company had more than 250 UK employees in 
the year, how the directors engaged with those employees.  Large 
companies must typically also include information in their direc-
tors’ report on the company’s greenhouse gas emissions and energy 
consumption during the financial year in question.
Companies with a premium listing of equity shares (on the 
Main Market) are required by the Listing Rules to comply with 
the UKCGC or explain in what respects they have diverged from 
it (known as the “comply or explain” regime).  In particular, 
12
Setting the Scene – Sources and 
Overview
1.1	
What are the main substantive ESG-related 
regulations?
There is no single, overarching piece of ESG legislation or regu-
lation in the UK.  Rather, the UK’s ESG regime comprises a 
somewhat disparate array of domestic and EU-derived laws and 
regulations, many of which are not solely ESG-focused.  The 
main legislative sources are the UK Corporate Governance 
Code 2018 (the “UKCGC”), the directors’ duties set out in the 
Companies Act 2006 (the “Companies Act”), the Listing Rules, 
the Disclosure Guidance and Transparency Rules (the “DTRs”), 
the UK Stewardship Code 2020 (the “UKSC”), the Large and 
Medium-sized Companies and Groups (Accounts and Reports) 
Regulations 2008, the Climate Change Act 2008 (the “CCA 
2008”), the Bribery Act 2010, the Corporate Manslaughter and 
Corporate Homicide Act 2007 (the “CMCHA”), the Equality 
Act 2010, and the Modern Slavery Act 2015 (the “MSA 2015”). 
The UK’s ESG legal landscape is therefore fragmented (perhaps 
reflecting the incomplete overlap between the E, the S and the 
G), with a wide range of different laws and regulations for all 
businesses (big and small) to be aware of and comply with.
The CCA 2008, which is the UK’s principal climate change 
statute, has set a revised target of at least a 100% reduction of UK 
greenhouse gas emissions by 2050 compared with 1990 levels.  
The bulk of the obligations under the statute are placed on the 
UK government rather than individual organisations, and the 
statute also provides for carbon trading for larger organisations.
The UKCGC and the UKSC are both key parts of the UK’s 
corporate governance regime, and are administered by the 
UK’s Financial Reporting Council (the “FRC”).  Generally, 
the UKCGC applies to listed companies, and the UKSC applies 
to institutional investors.  The FRC is due to be replaced in 
2021 by a new administrative body called the Audit, Reporting 
and Governance Authority (“ARGA”), which will have wider 
powers than the FRC and is expected, among other things, to 
scrutinise audit practices more closely, following several recent 
scandals where companies had been given a clean audit shortly 
before significant financial difficulties became public.
Pension funds are also subject to additional requirements under 
pension legislation, including the Occupational Pension Schemes 
(Investment) Regulations 2005 and the Occupational and Personal 
Pension Schemes (Disclosure of Information) Regulations 2013 
(the “Pensions Regulations”).  There are multiple sources of 
guidelines that supplement the Pensions Regulations, including 
guidance issued by the Pensions Regulator and organisations such 
as the Pensions and Lifetime Savings Association.

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Provision 5 of the UKCGC requires companies to describe in their 
annual report how their interests and the directors’ duties factors 
have been considered in board discussions and decision making.
The UKCGC also requires a company:
■ 
to employ one or a combination of the following methods 
to engage with its workforce:
■ a director appointed from the workforce;
■ a formal workforce advisory panel; or
■ a designated non-executive director; or
■ 
to explain what alternative arrangements it put in place and 
why it considers that they are effective.
Although other publicly traded companies (for example, those 
traded on AIM, formerly known as the Alternative Investment 
Market) are not subject to the Listing Rules, the rules of the secu-
rities exchange to which they are admitted will likely contain a 
requirement to report against a recognised corporate govern-
ance code.  Similarly, very large, non-publicly traded companies 
(again, measured by reference to turnover, balance sheet total 
and number of employees) must include a similar “corporate 
governance statement” in their annual report.
The UKSC sets out good practice for asset owners and 
managers when engaging with investee companies.  In particular, 
Principle 4 sets out guidelines on how investors should engage 
on (among other things) environmental risks (if they think the 
company’s own approach is not adequate).
Similar reporting requirements to those for companies apply 
to UK Limited Liability Partnerships (“LLPs”).
The MSA 2015 consolidates previous slavery and trafficking 
legislation and aims to combat modern slavery in the UK and in 
UK businesses’ supply chains.  It requires certain organisations 
with an annual turnover over £36m to publish (and display on 
a website) an annual statement setting out the steps taken in the 
previous year to ensure no slavery or human trafficking is taking 
place in the company’s business or supply chains.  There is no 
deadline for publication, so the potential for enforcement action 
is low, with (as is common in the UK’s ESG legislative landscape 
for now) the main driver to publish being the risk of reputational 
damage.  However, the UK government has recently taken a 
proactive role in encouraging companies to publish statements, 
has announced its intention to legislate for a publication deadline, 
and is reportedly looking at introducing new enforcement powers.
The CCA 2008 requires organisations to describe how direc-
tors have had regard to the Companies Act directors’ duties 
listed above in the context of climate change matters.  It also 
makes provision for other ESG-focused measures, such as the 
use of energy performance certificates on properties, stream-
lined energy and carbon reporting (“SECR”), and minimum 
energy efficiency standards.
Pension scheme trustees are required to exercise their powers 
for the proper purpose of the trust.  When it comes to pension 
scheme investment, this usually means acting in the benefi-
ciaries’ best financial interests (in similar vein to company direc-
tors’ primary duties, as described above).  The meaning of best 
financial interests is, however, open to some interpretation.  
As in the company context, ESG factors, if financially mate-
rial, ought to be considered by pension scheme trustees in their 
investment decision making. 
Under the Pensions Regulations, since October 2019, trus-
tees of most occupational pension schemes have been required 
to ensure that their statement of investment principles (“SIPs”) 
sets out their policies on how financially material considerations 
(including ESG factors) are taken into account in their invest-
ment decision making.  From October 2020, most occupational 
pension schemes will also be required to publish their SIPs on a 
publicly available website in order to increase transparency in this 
area.  Furthermore, under rules published by the UK’s Financial 
Conduct Authority (the “FCA”), firms that operate workplace 
personal pension schemes are required to establish and maintain 
Independent Governance Committees (“IGCs”), which requires 
them, among other things, to report on their firm’s ESG policies.
Notwithstanding the comment above regarding shareholder 
primacy, the UK’s ESG framework (in particular the Companies 
Act directors’ duties, the UKCGC and UKSC) is often cited in 
other jurisdictions as a good example of legislation that has 
“moved with the times” regarding corporate governance, stew-
ardship and engagement principles. 
1.3	
What voluntary ESG disclosures, beyond those 
required by law or regulation, are customary?
In addition to the UK’s laws and regulations, various ESG- 
related guidelines apply to (or are applied by) UK organisa-
tions, including the recommendations of the Task Force on 
Climate-related Financial Disclosures (the “TCFD”), the 
UN’s Sustainable Development Goals (the “SDGs”), and the 
Principles for Responsible Investment (the “PRIs”).
The LSE has issued guidance that adopts the TCFD recom-
mendations in identifying eight priorities related to climate risk 
reporting, explaining which ESG issues they see as the most 
material to the business and explaining how ESG issues may 
affect their business.  The guidance encourages smaller issuers 
to follow the prescribed criteria, saying “it is better to start reporting 
and to improve systems over time than not to report at all”.
UK funds and companies often describe their ESG creden-
tials by reference to the SDGs.  The SDGs are a UN initiative 
that lists 17 development goals that countries can use as a blue-
print to “end poverty, protect the planet and ensure that all people enjoy 
peace and prosperity by 2030”.  The SDGs also refer to 169 associ-
ated targets, which are to be measured using 232 indicators of 
achievement. 
In addition, a number of UK investors have signed up to the 
PRIs, with the bulk of these signatories (72%) being investment 
managers.  The PRIs are six overarching principles to incorpo-
rate ESG issues into investment, including at decision-making 
process level, by disclosing appropriately and by incorporating 
them into any portfolio companies.  The PRIs are described as 
voluntary and aspirational, offering a menu of possible actions 
for incorporating ESG issues.  The PRIs also explain to organ-
isations how to write a responsible investment policy to assist 
with improving ESG integration, and organisations are asked 
to provide evidence of how the policy is being complied with.
UK asset managers, asset owners and service providers can 
also sign up to the UKSC, the latest version of which was intro-
duced by the FRC in 2020.  Organisations must submit a final 
Stewardship Report to the FRC by 31 March 2021 if they wish 
to be included in the first list of signatories to the UKSC.  The 
UKSC, which is aimed at asset owners and asset managers, as 
well as “service providers” (investment consultants, proxy advi-
sors, accountants, actuaries, and data and research providers), 
sets out various principles and reporting guidelines, which differ 
depending on the category of organisation.  FCA-authorised 
asset managers are required (under the FCA’s Conduct of 
Business Rules) to “comply or explain” against the UKSC.  The 
Pensions Regulator also encourages adherence to the UKSC.
1.4	
Are there significant laws or regulations currently 
in the proposal process?
The Markets in Financial Instruments Directive II (“MiFID 
II”) is due to be amended in 2021 to require financial

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In addition, the UK Investment Association has devised a 
Responsible Investment Framework (the “RIF”) which was 
launched in November 2019.  The RIF categorises and provides 
standard definitions for the different components of responsible 
investment.  Investment managers have been encouraged to 
adopt the RIF to help highlight “the UK’s role as a global leader 
within the [areas of] sustainability and responsible investment”.
The UK Sustainable Investment and Finance Association 
(the “UKSIF”) is a membership organisation for firms in the 
finance industry.  UKSIF describes its role as informing, influ-
encing and connecting UK finance, policymakers and the public 
to achieve a vision of a fair, inclusive and sustainable financial 
system that works for the benefit of society and the environment.
Climate Action 100+ is a five-year initiative (from 2018) led 
by investors to engage larger greenhouse gas emitters and other 
companies worldwide that have significant opportunities to 
drive the transition to cleaner energy and to help achieve the 
goals of the UN 2015 Paris Agreement on climate change.
22
Principal Sources of ESG Pressure
2.1	
What are the views and perspectives of investors 
and asset managers toward ESG, and how do they exert 
influence in support of those views?
Investors and asset managers in the UK are focusing increas-
ingly on ESG, which in recent years has become very much a 
“hot topic” in the UK.  Historically, many larger investors would 
often state (both publicly and privately) that ESG-focused 
investments would come at a financial cost.
However, that perception appears to have been displaced in 
the UK, with a majority of ESG funds reporting parity with or 
outperformance of the wider market over one-, three-, five- and 
10-year periods.  Historically, a lack of data on ESG-focused 
funds’ performance has previously made many investors nervous, 
but there are now multiple reports indicating that ESG funds 
may have outperformed their non-ESG peers, leading to a signif-
icant recent increase in the number of ESG funds in the UK.  For 
example, “responsible investment” has grown over 40% from 
2014–2020 and this figure seems set to continue to increase.
The Pensions Regulations described in 1.1 above for pension 
schemes, which have considerable influence as major investors 
in the UK markets, have led to an increased provision of more 
ESG-friendly investments, as fund managers are put under 
pressure by pension funds to invest in more ESG-conscious 
investments.
There has been noticeable growth in the UK of entire firms 
that invest only in ESG or on “impact grounds”, as well as 
specific “sustainable” funds within wider financial institutions.  
Asset managers are now being trained on how to invest in a 
more ESG-conscious way and on the upcoming regulations (see 
1.4 above) that will apply to them.
2.2	 What are the views of other stakeholders toward 
ESG, and how do they exert influence in support of those 
views?
While it is clearly an over-simplification to divide ESG 
consciousness purely on grounds of age, the general percep-
tion is that younger, “millennial” (and even “Gen Z”) inves-
tors, consumers and stakeholders are more ESG-conscious than 
their “baby boomer” and other forebears, and have generated 
a greater demand for responsible investment.  These younger 
generations of investors and other stakeholders have tended to 
place greater importance on, for example, climate change, global 
advisers to incorporate ESG considerations within their suit-
ability requirements for investments.  This change will also 
be integrated into the Alternative Investment Fund Managers 
Directive (the “AIFMD”) and into the regulatory framework 
for “Undertakings for the Collective Investment in Transferable 
Securities” (“UCITS”) funds.  Under these amendments, firms 
will need to take account of their clients’ ESG preferences in 
assessing their investment objectives as part of their suitability 
assessment, which includes the risk of fluctuation in the value 
of an investment due to ESG factors.  Given that EU laws and 
regulations will cease to apply in the UK following Brexit, the 
FCA has indicated that it will seek to mirror these EU directives.
The FCA has proposed new requirements for premium-listed 
Main Market companies to state in their annual report whether 
they comply with TCFD-aligned disclosures, and to explain any 
non-compliance.
The pending Environment Bill (expected to become law by 
the end of 2020) will provide the UK government with powers to 
create new regulations on air quality, water usage, waste disposal 
and resource management, biodiversity, and environmental risk 
from chemical contamination.  It will create a new, non-depart-
mental public body (the Office for Environmental Protection) to 
act as an environment watchdog.  The Bill has, however, already 
been criticised for failing to make the watchdog sufficiently inde-
pendent of government and for a lack of enforcement powers.
In October 2020, new rules will come into force that place 
more onus on trustees of occupational pension schemes to 
disclose their engagement activities with asset managers.
The Agriculture Bill, which is designed to replace the EU’s 
Common Agriculture Policy for UK farmers following Brexit, 
has proposed a new land management system for UK farmers 
aimed at maximising the potential of land for producing high-
quality food in a more sustainable way.
The EU Taxonomy report from the Technical Expert Group 
on Sustainable Finance (the “Taxonomy Report”) is expected 
to come into force by the end of 2020.  The report provides 
performance thresholds for identifying environmentally 
sustainable economic activities and has been heralded by the EU 
Commission’s vice-president as “the single most important piece 
of legislation” aimed at the markets that can help governments 
meet emission targets.
To qualify, a project or business activity must (1) make a 
substantial contribution towards one of six climate change and 
environmental goals, (2) avoid significant harm to other envi-
ronmental objectives, and (3) meet certain social and govern-
ance safeguards related to responsible business practices.
The report’s terms of reference provide examples of each of the 
three components of ESG, which are likely to be used as a refer-
ence point for other regulations and ESG reporting, including: 
■ 
Environmental: “climate change mitigation, climate 
change adaption, the sustainable use and protection of 
water and marine resources, the transition to a circular 
economy, waste prevention and recycling, pollution 
prevention and the protection of healthy ecosystems.”
■ 
Social: “investments that contribute to tackling inequality, 
that foster social cohesion, social integration and labour 
relations or investments in human capital or economically 
or socially disadvantaged communities.”
■ 
Governance: “companies with sound management, 
employee relations and tax compliance.”
1.5	
What significant private sector initiatives relating 
to ESG are there?
The private sector initiatives relating to ESG are largely those 
described at 1.3 above, namely using the PRIs or SDGs to report 
on ESG in investments.

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rather than “comply or face sanctions”.  There have not been 
many material enforcements to date.  As more section 172 state-
ments (described in 1.2 above) are published and as new regu-
lations come into force, we may see increased regulator action 
(and abilities to impose sanctions) in relation to non-compliance.
The Environmental Regulators are the most active of the 
UK’s ESG regulators, and have issued a total of 746 penal-
ties since 2010 totalling £110.5m.  The largest penalty issued 
to date was in March 2017: a £20.36m fine to Thames Water 
for repeated raw sewage pollution into the River Thames.  
However, the typical average penalty size is under £18,000.  The 
Environmental Regulators are also able to issue fines in connec-
tion with climate change issues, which often relate to failure to 
comply with the greenhouse gas emissions trading scheme.
Under the CMCHA, organisations can be found guilty of 
corporate manslaughter – a criminal offence that results from 
serious management failures amounting to a gross breach of 
duty of care.  While the suitability of the legislation has recently 
been questioned as convictions have been relatively rare (there 
have been fewer than 30 since the regime was introduced 
in 2007), the criminal sanctions for breach (and the associ-
ated reputational damage) mean that organisations are invari-
ably focused on ensuring that adequate measures are in place to 
ensure compliance with associated health and safety legislation 
as well as to avoid any possible breach of the CMCHA.
Whilst there has been no material enforcement to date, under 
the MSA 2015, the UK Home Office has been writing to organ-
isations that have failed to publish their modern slavery state-
ment on time, threatening action.  Again, potential reputational 
damage is currently a greater risk here than legal ramifica-
tions.  We have encountered companies that have either failed 
to publish their statement on time and have then been given a 
grace period within which to publish their statement, or that 
have been able to explain to the Home Office why the rules are 
not applicable to them (for example, if the turnover threshold 
is not met). 
The UK Advertising Standards Authority (the “ASA”) has 
banned multiple adverts in the UK, often for being misleading 
in relation to environmental claims.  Whilst not a direct ESG 
enforcement action, this is often described in the media as a 
“greenwashing” attempt by the company in question (i.e. 
misleading information being disseminated by an organisation 
so as to present an (inaccurately) environmentally responsible 
public image).  Again, a ban by the ASA usually leads to nega-
tive press and associated investor issues.  Examples of busi-
nesses that have had adverts banned by the ASA in recent years 
include Ancol Pet Products, BMW, Fischer Future Heat, Ryanair 
and Shell. 
The UKSIF has recently issued a report analysing pension 
ESG issues, following the introduction of the increased disclo-
sure requirements under the Pensions Regulations (described in 
1.1 above), which found “an appallingly poor rate of compli-
ance with the ESG regulations”.  Of the SIPs they were able 
to review, “policies were thin, non-committal and suggest 
that [pension] trustees are not adequately interrogating their 
investment manager’s approaches to financially material ESG 
factors”.  They also flagged that a significant number of pension 
schemes have failed to comply with their obligations and have 
not published their SIPs.
Given the lack of major enforcement actions to date, some 
critics argue that ESG-related litigation, including against 
governments and public bodies (such as the regulators) for 
failing to act, as well as against companies to claim damages, 
may prove in future to be a more effective way of holding busi-
nesses to account and forcing them to change their practices. 
warming, social justice and other non-financial imperatives than 
their predecessors.  Given the inevitability of wealth transfer to 
these generations over time (as well as a desire to move – and be 
seen to move – with the times), organisations have been driven 
to act competitively in demonstrating their ESG credentials.
The younger, more ESG-conscious generations are also 
making up an increasing proportion of the workforce in large 
UK corporates, often encouraging (or forcing) organisations 
to strengthen their internal ESG measures, such as increased 
employee engagement, better employee benefits (for example, 
maternity and paternity leave), improving waste reduction, and 
more extensive recycling.  It is also noteworthy that the “older” 
generations within (and, generally, at the top of) UK businesses 
appear, for the most part, to have embraced ESG initiatives and 
to be willing to adapt their organisations and business practices 
accordingly.
Providers of debt finance have also begun to place a greater 
emphasis on ESG investments, again particularly in those 
seeking to reduce or reverse climate change.
2.3	 What are the principal regulators with respect to 
ESG issues, and what issues are being pressed by those 
regulators?
In the UK, the principal ESG regulators are the FCA, the 
European Commission (for EU financial services such as 
MiFID II, the AIFMD and the UCITS Directive), the UK 
government, the FRC (to be replaced by ARGA as described in 
1.1 above), regulators of securities exchanges (for example, the 
LSE), the Registrar of Companies (Companies House), and the 
Pensions Regulator.
The UK’s environmental regulators are the Environment 
Agency, the Scottish Environment Protection Agency, and 
Natural Resources Wales (the “Environmental Regulators”). 
The Environmental Regulators are able to issue fines for failure 
to comply with environmental laws and regulations such as water 
treatment and discharge, waste disposal, packaging regulations, 
oil discharge and the management of environmental permits.
In March 2020, the FCA released a Consultation Paper 
to enhance climate-related disclosures by listed issuers (on a 
“comply or explain” basis) consistent with the TCFD recom-
mendations.  Under the proposal, all commercial companies 
with a UK premium listing (i.e. Main Market companies subject 
to the UK’s highest regulation and corporate governance stand-
ards) would be required to include a statement in their annual 
financial report setting out (1) whether they have made disclo-
sures consistent with the TCFD recommendations, (2) instances 
where they have not followed the TCFD recommendations (and 
why), (3) instances where they have included disclosures in a 
document other than their annual financial report (and why), 
and (4) where in their annual report (or other relevant docu-
ments) the various disclosures can be found.  The FCA places 
particular emphasis on the TCFD’s recommended disclosures 
on risk management and governance, stating that only “on an 
exceptional basis” should companies not disclose these items.  
After the consultation period, these new requirements are likely 
to take effect for accounting periods beginning on or after 1 
January 2021, with the first reports published in compliance of 
the rule being published in 2022.
2.4	 Have there been material enforcement actions with 
respect to ESG issues? 
Much of the UK’s regulation in relation to ESG compliance is 
relatively new, and many of the regimes are “comply or explain”

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fact of a claim (rather than damages stemming from one) may 
be damaging to a company’s reputation, so businesses will need 
to continue to tread carefully in this area.
2.6	 What are current key issues of concern for the 
proponents of ESG?
A key issue for ESG proponents is inconsistency.  As a basic 
example, there is no universally agreed definition for the under-
lying elements of each component of “E-S-G”, which continues 
to hinder effective ESG legislation and enforcement both in the 
UK and more widely.  While efforts are being made to improve 
this situation (see, for example, the Taxonomy Report at 1.4 
above), the varied requirements under the legislative framework 
(which, as noted in 1.1 above, is fragmented), and the differing 
guidance suggestions on reporting and disclosures, there is 
often a lack of consistency across companies’ ESG disclosures.  
This can in turn lead to investors inadvertently excluding or 
even including issuers on the basis of their ESG reporting (espe-
cially if an algorithm or program is being used to review ESG 
disclosures).
Another major concern for proponents of ESG is “green-
washing”.  Given the lack of consistency across regulations and 
guidelines and the currently limited number of enforcement 
actions (and shareholder claims) with respect to ESG disclosure 
matters, there is a clear risk that many companies may have over-
stated their ESG efforts.  Historically, media reports have largely 
focused on “greenwashed” products or lines rather than entire 
companies (as described at 2.4 above in relation to ASA bans).  
This may change, however, as larger and less ESG-conscious 
companies are required to disclose how they take ESG factors 
into account.  In addition, fund managers are using the UN’s 
SDGs to describe some investments as “sustainable” or 
“ESG-conscious” without providing clear evidence of the posi-
tive impact they have generated.  Certain funds are described as 
“ESG funds”, yet they simply exclude certain types of invest-
ments, such as tobacco and arms (with very few excluding fossil 
fuel investments), rather than actually analysing investments’ 
specific “E-S-and-G” credentials.  The nuanced differences 
between “sustainable investing”, “impact investing” and “ESG 
investing” can also lead to confusion for investors.
The difficulties for investors in assessing an issuer’s ESG 
credentials in detail can hinder effective ESG investment. 
Technological advances have begun to assist analysts in this area, 
for example, by including certain global ESG issues as require-
ments in investments (such as access to clean water, or align-
ment with the Paris Agreement on climate change).  A significant 
amount of capital in UK so-called “sustainable investments” is 
in fact invested in passive tracker funds, which follow the move-
ments of a particular index such as the FTSE 100, a significant 
proportion of which is made up of oil and gas companies.  The 
result is that passive, sustainable investment funds are (at present) 
unlikely to make a significant impact on specific ESG goals for 
investors, and can arguably be used by funds to overstate their 
ESG credentials.  Some investors would argue that a fund that is 
invested in finite natural resources (such as oil and gas) could not 
be an ESG investment, whilst others might claim that, as many 
traditional fossil fuel companies look to diversify their offerings 
and become more sustainable, investing in these companies is 
actually helping this process of change and so is the very defini-
tion of an ESG-conscious investment.  Again, the inconsistency 
is not helpful to those seeking to promote ESG issues.  The FCA 
is currently consulting on how to tackle greenwashing and reduce 
the overly broad application of “green” investment labels.
2.5	 What are the principal ESG-related litigation risks, 
and has there been material litigation with respect to 
ESG issues, other than enforcement actions?
ESG litigation has not yet taken off in the UK in the same way 
as in the US (and is currently very rare), though this could be set 
to change in the near future.
Investors are increasingly reviewing the ESG credentials of 
publicly listed companies as part of their decision to invest.  
This has led to ESG-related disclosures in annual reports and 
prospectuses of these entities being put under greater scrutiny, 
and an increased risk of investor and activist claims if disclo-
sures are inaccurate. 
We envisage that there will be an increase in large class actions 
from investors against companies that inaccurately describe 
their ESG credentials.  Shareholder activism has increased, 
particularly in the oil and gas and, increasingly, finance sectors.  
Activist investor groups (such as ShareAction) have given indi-
vidual or smaller ESG-conscious investors a greater voice 
and held various firms to account by proposing resolutions, 
publishing articles on issuer non-compliance with ESG regula-
tions and guidance, and providing rankings for both countries 
and organisations (such as banks).
For example, at BP’s 2019 AGM, two special resolutions in 
relation to climate change issues were requisitioned by share-
holder groups organised by Climate Action 100+ and Follow 
This.  One of these resolutions proposed that BP include, in its 
annual report from 2019 onwards, a progress report describing 
how its business strategy is consistent with the objectives of 
the Paris Agreement on climate change, supported by informa-
tion relating to relevant capital expenditure, metrics and targets.  
This resolution was passed at the AGM with the support of 99% 
of shareholders, evidencing the importance to investors of ESG 
credentials and their disclosures to the public.  Other examples 
of companies whose shareholders have requisitioned resolutions 
with respect to environmental matters include Barclays, BHP 
Group and Royal Dutch Shell.
A further risk associated with litigation or regulatory enforce-
ment is the effects of such an intervention, in particular for 
listed companies given the potential for it to cause a rapid drop 
in the company’s share price, in turn prompting shareholders to 
bring action against the company to recover the losses suffered 
as a result of the decline in value of the stock.  Such “securi-
ties litigation” originated in the US but has been on the rise in 
the UK in recent years, partly due to the increase in third-party 
litigation funding and insurance, as well as active claimant law 
firms and claims management companies seeking out these 
types of claims.
Such claims can be made under section 90A of the Financial 
Services Markets Act 2000 (“FSMA”), which states that, if an 
issuer makes an untrue or misleading statement or a dishonest 
omission in published information (other than listing particu-
lars or prospectuses) – such as in its annual report and accounts 
– it can be liable to investors who need to prove that they 
acquired, continued to hold, or disposed of shares in reliance 
on the relevant statement or omission.  As at the date of writing, 
this section is largely untested in the UK courts in relation to 
ESG matters, and there are some doubts as to how easy it would 
be to prove reliance (other than by reference to a sustainable 
investment’s fund or other ESG-conscious investor’s docu-
mented ESG goals or principles) and then accurately quantify 
the loss suffered by the investor.  Once again, however, the very

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Environmental, Social & Governance Law 2021
Board committees are often used – particularly audit and risk 
committees – to consider specific ESG matters.  In addition, 
some entities will establish a dedicated sustainability, ESG or 
health and safety committee to provide oversight of all ESG 
matters and report to the board on these issues.  Such dedi-
cated committees provide for the ability to have an allocated 
budget and, perhaps more helpfully, to set or alter the compa-
ny’s agenda to align with changing ESG trends or requirements 
and to recommend changes to the board.  There is, however, 
currently no requirement in the UK to have an ESG committee.  
As described above, many companies will already have a CSR 
committee, which may well address some of the ESG aims of 
an organisation. 
3.3	 What compensation or remuneration approaches 
are used to align incentives with respect to ESG?
Under section 430 of the Companies Act, directors of certain 
listed companies must prepare a directors’ remuneration 
report for each financial year of the company.  This contains 
a retrospective overview of the director’s remuneration for the 
previous financial year (the “DRR”), together with a forward-
looking policy which sets out the framework and limitations for 
future remuneration for directors (the “DRP”).  The DRR is 
subject to a non-binding shareholder vote each year, whilst the 
DRP must be put to a binding vote of the shareholders at least 
every three years.
There is currently no legal requirement to link remuner-
ation or incentives to ESG metrics, but it is likely that more 
ESG-conscious organisations may decide to go beyond their 
legal obligations in this regard, and we are beginning to see 
organisations creating links between achievement of certain 
ESG outcomes and remuneration.
The PRIs (see 1.3 above) explain how to link ESG factors 
to remuneration to ensure that executive management can be 
held to account for the delivery of sustainable business goals.  
It is more difficult in some sectors than others to recognise 
which ESG factors affect long-term financial performance.  For 
example, in industries typified by high energy usage, it is easier 
to see that reducing greenhouse gas emissions leads to reduced 
energy usage and reduced costs; whereas measuring consumer 
satisfaction or workforce engagement is much more compli-
cated, and companies will need to be clear on any metrics or 
methodologies used in such areas.
The UKSC obliges signatories to consider, among other 
things, “diversity, remuneration and workforce integration”.  
Given the recent implementation of this code, it is likely that 
ESG-linked remuneration will become more prevalent in the 
future, especially as a result of the increasing public importance 
being placed on the “S” factors in ESG during the COVID-19 
pandemic, as further described at 6.1 below.
3.4	 What are some common examples of how 
companies have integrated ESG into their day-to-day 
operations?
Various funds publicly committed to integrating ESG into their 
daily operations and investment processes by becoming signa-
tories to the PRIs and publishing statements setting out their 
approach; for example, by providing detail on the board over-
sight and committee structure (as described in 3.2 above) and 
explaining how ESG is integrated into the investment process. 
Investment managers who integrate ESG into their systems 
and processes tend to publicise this, but an internal cultural 
acceptance of ESG investing is harder to evidence or quantify. 
32
Integration of ESG Into Business 
Operations and Planning
3.1	
Who has principal responsibility for addressing 
ESG issues? What is the role of the management body in 
setting and changing the strategy of the corporate entity 
with respect to these issues?
The responsibility for ESG issues varies depending on the size 
and type of the organisation, but largely the responsibility will 
fall to the board of directors of a company, and to the managers 
within a fund.  As explained in 1.2 above, the Companies Act 
places requirements on the directors of a company to promote 
the success of the company for the benefit of its shareholders, 
including the requirement to have regard to various ESG-related 
factors, and larger companies are required to disclose how these 
factors were taken into account in the decision-making process.
The responsibility for addressing ESG issues is often dele-
gated to specific individuals or committees with greater ESG 
expertise, key operations executives, and those within the 
organisation’s legal, regulatory and compliance responsibilities 
(such as the general counsel or members of the in-house legal 
team).  Organisations may also outsource the work to consult-
ants to help develop the strategy and plan for implementation in 
the first instance. 
ESG strategies were often previously called CR (corporate 
responsibility) or CSR (corporate social responsibility) strate-
gies.  Some organisations may still have a CSR committee, which 
is likely to be tasked with ensuring compliance with the busi-
ness’s ESG obligations and objectives.
The role of the management body in setting and changing the 
strategy of an entity in relation to ESG issues is key, in particular 
so that others involved in implementing the strategy appreciate 
its importance and understand the key drivers behind it.  As 
noted in 2.2 above, while ESG issues are often perceived as 
being driven by younger generations of stakeholders, typically 
those at the top of an organisation are (at present) not “millen-
nials”, so the buy-in of business leaders and managers is crucial 
for the success of ESG initiatives.
3.2	 What governance mechanisms are in place to 
supervise management of ESG issues? What is the role 
of the board and board committees?
As discussed in 1.2 above, directors have an obligation under 
the Companies Act to “have regard” to various stakeholder 
constituencies (for example, employees), albeit in the context of 
discharging their primary duty to promote the success of the 
company for the benefit of its shareholders.
Investors are placing a growing importance on workforce 
engagement, often seen as the key component of the “S” in 
ESG, meaning that the interests and concerns of companies’ 
employees are being considered more and more in boards’ deci-
sion-making processes.
Recent amendments to the UKCGC require listed compa-
nies to adopt one of three workforce engagement methods (as 
explained in 1.2 above).  It is open to a board not to adopt any 
of these measures and instead to choose its own arrangements 
and explain why they are effective.  The majority of FTSE 350 
companies have opted to appoint a non-executive director.  
The reference to “workforce”, rather than employees, in the 
UKCGC ensures that part-time and flexible employees and 
agency workers are included within this engagement framework.

132
United Kingdom
Environmental, Social & Governance Law 2021
known as the “Green Bond Principles”, which are published by 
an executive committee of investors, issuers and underwriters 
with the International Capital Market Association (“ICMA”) as 
secretariat and are internationally accepted norms.  These also 
form the basis of the Green Loan Principles published by the 
UK Loan Market Association (“LMA”) in 2018. 
The LSE set up a dedicated “Green Bond Segment” in 2015 
and has a dedicated Sustainable Bond Market which aims at 
championing “innovative issuers in sustainable finance and 
improves access, flexibility and transparency for investors”.
Green bonds are playing an increasing role in the market 
and, although they and sustainability-linked bonds do not yet 
form a significant part of the market (as described in 4.3 below), 
this seems likely to change in the coming years.  Unlike other 
European governments, the UK government has not yet said 
that it will issue a sovereign green bond (and has been criticised 
for this), but the UK government’s 2019 Green Finance Strategy 
includes objectives such as “greening finance” and “financing 
green”, so this may change in future.
4.3	 Do sustainability-linked bonds play a significant 
role in the market?
The use of sustainability-linked bonds has yet to become main-
stream in the UK market (particularly when compared to other 
European countries that have historically been more proactive 
in addressing climate change in the debt markets in particular), 
but their use is gradually increasing, from 2.8% of the total bond 
market in the first quarter of 2020 to 4% at the time of writing 
(according to UK credit rating company Moody’s).  These bonds 
appear to be producing similar returns to more traditional 
bonds and are likely to continue to be used more widely as the 
UK economy attempts to recover from the economic and other 
effects of the COVID-19 pandemic (as further discussed at 5.1 
and 6.1 below).
The main differences between sustainability-linked bonds 
and traditional bonds are the disclosure and marketing require-
ments for the issuer, plus the economics of the bond being 
linked to a specific set of key performance indicators that are 
known as sustainability performance targets (“SPTs”). 
In the ICMA’s Sustainability-Linked Bond Principles, 
sustainability-linked bonds are described as focusing on incenti-
vising the issuer’s efforts on improving its sustainability profile 
by aligning the bond terms to the issuer’s performance against 
mutually agreed, material and ambitious, predetermined SPTs.  
The use of proceeds (i.e. purpose of the bond) is not a key deter-
minant for these bonds in the same way as it is in green bonds.
Whilst sustainability-linked bonds have yet to emerge as a 
product of choice for issuers, we envisage their use may become 
more prevalent in the near future.
4.4	 What are the major factors impacting the use of 
these types of financial instruments?
The lack of a centralised database and standardisation of ESG 
data in the EU and the UK creates the same problems for issuers 
of these bonds as for equity finance providers and other market 
participants.
The UK’s Green Finance Strategy is aimed at addressing these 
problems by outlining some key actions, including working with 
the British Standards Institution to develop sustainable finance 
standards.  It seems likely in the UK that investor pressure and 
regulation will increase, pushing market participants towards 
the use of ESG financial products.  We therefore anticipate that 
the use of these financial instruments will continue to accelerate.
ESG reporting has become more of the norm for fund 
managers, with the majority signed up to PRI reporting.  It has 
been reported that it takes managers on average between two 
and four weeks to report in accordance with the PRIs.
42
Finance
4.1	
To what extent do providers of debt and equity 
finance rely on internally or externally developed ESG 
ratings?
In the public markets in particular, providers of equity and debt 
finance are relying increasingly on both externally and internally 
developed ESG ratings.  There has been accelerated growth 
in recent years of ESG rating agencies (such as FTSE ESG, 
Sustainalytics, Refinitiv and MSCI), which assess and rate global 
companies based on their ESG performance.  This can involve 
reviewing issuer’s annual accounts and reports for ESG-related 
topics.
As described in 2.6 above, the lack of consistency on reporting 
and levels of description in these disclosures can inadvertently 
hinder (or even bolster) a company’s ESG rating.  The lack of 
consistency in rating methodologies also leads to unreliability 
and a lack of comparability in the market (with the same company 
sometimes being seen as both ESG-friendly by some ratings 
agencies and harmful to ESG by others), which impairs debt 
and equity finance providers’ ability to make accurate compar-
isons.  Given the difficulty in quantifying or giving a score to 
many ESG factors due to their intangible nature (in particular, 
in relation to social and, perhaps surprisingly, governance goals), 
the use of third-party agencies and automated programs has 
been criticised for not digging deeply enough into what precisely 
companies are actually doing (as distinct from what they say they 
are doing) to improve their impact on ESG issues. 
In the private markets, in which investors typically invest 
in businesses that are not otherwise rated, market participants 
are largely relying on internally developed policies and proce-
dures that are largely informed by the codes, policies and reports 
mentioned above.  Additionally, they are seeking support from 
external ESG consultants and advisors to inform investment 
decisions, rather than publicly available ratings.
4.2	 Do green bonds or social bonds play a significant 
role in the market?
Green bonds are bonds issued by companies or governments 
to fund green, social or sustainability projects.  They include a 
variety of financial products, most commonly the green infra-
structure bond, a bond issued to refinance built and operating 
low-carbon infrastructure, such as offshore wind turbines and 
grid connections.  The bonds help access the large volumes 
of capital that are (and will be) required for the transition to a 
low(er)-carbon future.
There are different types of green bonds, including main-
stream green bonds (issued in relation to environmentally 
friendly business activities), social bonds (for issuers with activ-
ities designed to achieve social outcomes), sustainability bonds 
(combining environmental and social aims – not to be confused 
with sustainability-linked bonds, as explained in 4.3 below), SDG 
bonds (for business activities that promote the SDGs), and the 
more niche blue bonds, forestry bonds and climate bonds.
These bonds can be issued by financial institutions, govern-
ments and, more commonly, companies to finance or refinance 
green projects.  Green bonds tend to follow disclosure norms

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Environmental, Social & Governance Law 2021
way include a specific government fund dedicated to reskilling 
citizens for work in the renewable energy, clean tech, and built 
environment sectors, as well as further government investment 
in these areas. 
The government has reportedly asked local authorities to 
submit, as a matter of urgency, “shovel-ready” infrastructure 
ideas that will both “[support] green recovery” and “[drive] up 
economic growth and jobs”.  The roundtable on green recovery 
is likely to discuss these issues.
62
Trends
6.1	
What are the material trends related to ESG?
As described at 2.2 above, there has been a significant surge in 
the UK in recent years in increasing ESG efforts, both from the 
general public, investors and the UK government itself.
That said, Brexit is likely to affect the UK’s legal framework 
in relation to ESG, as the UK has recently delayed committing 
to implement the EU’s green finance rules (per the Taxonomy 
Report discussed at 1.4 above).  These rules would create a 
world-first “green gold standard” and are aimed at preventing 
greenwashing.  Whether the UK chooses to implement similar 
or identical rules or standards remains to be seen.
The UK government has expressed a wish to create 2 million 
“green collar” jobs in the UK by 2030.  The UK chancellor, 
Rishi Sunak, is reportedly planning measures to create a “green 
industrial revolution”, which (as described at 5.1 above) could 
potentially include a government fund dedicated to reskilling 
workers to work in cleaner industries. 
More organisations (including universities and business 
schools, as well as larger financial institutions) are increasing 
training modules on ESG.  Furthermore, the increasing weight 
organisations are placing on ESG and the time needed to 
comply with regulations and principles has led to an increase in 
ESG-specific jobs, most of which tend to be taken by “millen-
nials” who (as discussed at 2.2 above) have tended to exhibit a 
greater interest in this area than the generations before them 
(although, as noted above, one’s age is of course by no means 
a hard and fast determinant of commitment, or lack thereof, to 
ESG).
Both investors and media outlets are placing a greater 
emphasis on the social part of ESG, as “human capital” stories 
have increased throughout the COVID-19 pandemic, with 
significantly more media attention than before being placed on 
how companies are treating their staff and judging more gener-
ally how they perform throughout the crisis.
In conjunction with the resurgence of the US (and global) 
Black Lives Matter movement, the UK has seen in 2020 
increased protests against racial injustice, which (among other 
factors) have led various companies and firms of differing sizes 
to reconsider their internal diversity and inclusion efforts (within 
the “S” of ESG), and to look closely at whether employees are 
being adequately supported specifically during the pandemic 
and, more generally, in the longer term.  Various companies 
have made public statements about their efforts in this regard, 
including by signing up to charters or commitments to increase 
diversity.
Notwithstanding the above, however, there have also been 
reports that, in April 2020, around 27% of organisations had put 
all or most of their diversity initiatives on hold as a result of the 
COVID-19 pandemic, including sponsorship of external events 
and programmes.  This appears at odds with the increased 
focus on ESG initiatives, and it is to be hoped that businesses 
continue to prioritise diversity initiatives at least as much after 
the pandemic (if not more) than was the case before.
4.5	 What is the assurance and verification process 
for green bonds? To what extent are these processes 
regulated?
The Green Bond Principles (referred to in 4.2) published by 
ICMA set out certain procedural standards that are largely 
consistent across the sustainability-linked bond sphere.  These 
voluntary standards are aimed at encouraging the issuer of the 
bond to:
■ 
disclose the type of projects that the bond will be used 
for, which should only be limited to a list of eligible green 
projects;
■ 
describe the process of determining which projects will 
receive allocations;
■ 
describe how proceeds from the financing will be managed 
(including any reinvestment); and
■ 
report on how the proceeds were allocated and on key 
performance indicators of the issuer’s selected investments.
It is also recommended (but not compulsory) that an issuer 
obtains a third-party opinion or certification on the sustaina-
bility of its bond offering.
As described above, these processes are not currently regu-
lated in the UK by the government or any other regulator any 
more (or less) stringently than a traditional bond, and there are 
no specific laws or regulatory frameworks in the UK mandating 
the sustainability credentials of issuers.  Most sustainabili-
ty-linked bonds are issued largely for reputational reasons. 
However, ironically, the greatest risks associated with these 
bonds can be reputational.  This is in part due to increased 
public and media interest in these bonds, and the scrutiny 
placed on them and the underlying projects, to ensure they are 
not being used by either the bond holder or the issuer to green-
wash their ESG credentials (as discussed in 2.4 and 2.6 above).
52
Impact of COVID-19
5.1	
Has COVID-19 had a significant impact on ESG 
practices?
Yes.  COVID-19 has undoubtedly led to a significant increase 
in the importance investors and firms are now placing on ESG 
practices in the UK.  While the pandemic has already changed 
the world in many ways, its impact on ESG may be one of the 
most important changes for those UK businesses that are able to 
make it through the inevitable economic turbulence.
In particular, the “S” in ESG has been propelled forward (as 
discussed in 6.1 below), partly due to the detailed level of press 
coverage of businesses’ ESG practices during the pandemic and 
partly due to the need for a greater private sector response in 
assisting with these measures.
It has recently been argued that the reason for the outper-
formance of corporate bonds and equities with high ESG 
ratings during the COVID-19 crisis has been better governance 
within these entities, including a greater emphasis on external 
factors and stakeholders, which has in turn prepared these types 
of investments better for shocks such as COVID-19.  While it 
is too early to say whether this is a correct assessment of those 
businesses’ performance, the trend does appear to be striking.
The UK government acknowledged in August that “much 
has changed” due to the impact of COVID-19 on the economy 
and stated “now is the time to ask whether the government can 
seize the opportunity presented by the crisis to further green the 
economy to achieve net-zero by 2050”. 
Suggested (although as yet unconfirmed) policies to assist 
with the recovery of the UK economy in a more ESG-conscious

134
United Kingdom
Environmental, Social & Governance Law 2021
are not met).  COVID-19 is generally being viewed in the UK as 
a long-term catalyst for ESG, as it has increased awareness, both 
within the UK and globally, of worker health and safety, income 
inequality and wider social issues. 
On the whole, we believe it is likely that there will continue 
to be a greater emphasis in the UK on ESG in the longer term 
(for those businesses that survive the pandemic) – in particular, 
an acceleration of the emphasis on “social” issues as a result 
of COVID-19.  How businesses treat their employees and all 
other stakeholders (for example, their supply chain and busi-
ness partners) seems likely to become ever more important, and 
public disclosures and metrics (which will be ever more closely 
analysed) are likely to become the norm.
6.2	 What will be the longer-term impact of COVID-19 on 
ESG?
Much remains to be seen as, at the time of writing, the UK 
government is beginning to re-strengthen restrictions and the 
worst of the pandemic may not be over.  The inevitable economic 
downturn is likely to have both negative and positive effects on 
ESG.  Organisations may have less time and funds available to 
dedicate to ESG matters, and may (not unreasonably) be more 
focused on survival in the short term.  However, as discussed 
above, greater public and media interest may prompt organisa-
tions to ensure they do not fall short in ESG areas, given the 
possibility of adverse publicity (and therefore adverse financial 
effects, such as investors pulling investments if ESG measures

135
Macfarlanes LLP 
Environmental, Social & Governance Law 2021
Tom Rose is a partner in Macfarlanes’ corporate and M&A team.  He advises clients on a wide range of corporate matters, including public 
and private M&A, equity capital markets and private equity transactions, with particular experience in international cross-border work.  Tom’s 
practice covers a variety of sectors and geographies, often involving transactions across multiple jurisdictions.  He is a member of the 
International Bar Association.
Macfarlanes LLP 
20 Cursitor Street
London EC4A 1LT
United Kingdom
Tel:	
+44 20 7831 9222
Email:	
tom.rose@macfarlanes.com  
URL:	
www.macfarlanes.com 
Olivia Seeley is a solicitor in Macfarlanes’ corporate and M&A team.  She undertakes a broad range of corporate work, including in the areas 
of private equity, cross-border M&A and general corporate advisory.  Olivia acts for a wide range of clients including private equity houses, 
management teams and large corporates.  She has advised corporate clients on matters including mergers, acquisitions and disposals.
Macfarlanes LLP 
20 Cursitor Street
London EC4A 1LT
United Kingdom
Tel:	
+44 20 7831 9222
Email:	
olivia.seeley@macfarlanes.com 
URL:	
www.macfarlanes.com 
Macfarlanes is a distinctive, London-based law firm, focused on our clients 
and on delivering excellence in the international legal market.  The firm 
has made a deliberate choice to remain smaller than many of its peers, 
believing that clients benefit from close-knit teams who work together on 
a regular basis.  The firm has decided against growth at the expense of 
quality, or size at the expense of efficiency and agility.  So, whilst the firm 
is large enough to advise on the most complex legal matters, it is also 
small enough to ensure the provision of consistently high-quality advice 
to its clients.
www.macfarlanes.com

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