Sustainable Finance

Law Firm in the Netherlands specialised in Sustainable Finance

Back to ESG - Environmental, Social & Governance

Sustainable finance is about including environmental, social and governance (ESG) considerations in investment and finance decisions. In recent years, we have seen that more and more investors and lenders, including banks, are considering ESG factors when making investment decisions. With the aim to support economic growth while reducing pressures on the environment and taking social and governance aspects into account.

Sustainable Finance tools

The past years various sustainable financing products have been developed. For loans, two particular main products have became popular. First, the financing of ‘green’ projects such as for the development of renewable energy sources, called Green Loans. And secondly, providing Sustainability Linked Loans for companies in order to improve its sustainability profile measured by predetermined targets. Once these targets have been met, the company will receive a discount on its loan.

Multidisciplinary and market leading practice

CMS is a Thought Leader and has a market leading Sustainable Finance practice. Our knowledge and experience is based on the work we have been doing for years for almost all market leading players in this area. Within the practice area group ESG we specialise in helping clients implement sustainable business practices. Therefore, at CMS we have developed a multidisciplinary sustainable finance approach, where specialists in the fields of regulation, financing, corporate law and energy work together.

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Sustainability KPIs in finance transactions
Sus­tain­ab­il­ity-linked financing is still in its infancy, but it is already an integral part of today's financing landscape and looks set to remain into the future. Plenty of data and information exists, particularly on the KPIs of sus­tain­ab­il­ity-linked financings, but it is scattered. In this guide we have compiled, analysed and commented on all aspects of sus­tain­ab­il­ity-linked financing to give you access to everything you need to know.
A Growing focus on sustainability in the financial sector
With this E-Book we explore the concept of sustainable finance


Sustainability KPIs in finance transactions
Sus­tain­ab­il­ity-linked financing is still in its infancy, but it is already an integral part of today's financing landscape and looks set to remain into the future. Plenty of data and information exists, particularly on the KPIs of sus­tain­ab­il­ity-linked financings, but it is scattered. In this guide we have compiled, analysed and commented on all aspects of sus­tain­ab­il­ity-linked financing to give you access to everything you need to know.
Bart-Adriaan de Ruijter: Future-proof companies make ESG top priority
ESG has become a strategic priority in the boardroom in recent years, says Bart-Adriaan de Ruijter, member of the ESG task force at CMS, in an interview with FD De Wereld in 2023. Companies pay attention...
Sustainable Financing
ESG: Environmental, Social & Governance
ESG e-guide
Over a relatively short period of time, the implementation of ESG (environmental, social and governance) aspects in commerce has grown to become a strategic priority at management level. While the substance of ESG is likely to evolve in the coming years, the underlying impulse for businesses to make a social contribution, and not just an economic one, is here to stay. In essence, it is about maintaining and reinforcing the social licence of a business to operate in a rapidly changing world. As a result, ESG goes to the heart of every business. Future-looking companies Not all aspects of E, S and G are priorities for all companies. Companies will carefully have to weigh which ESG aspects they want to focus on. For that reason, it is instructive to observe organisations that approach ESG in a rigorous, strategy-driven, socially attuned way. McKinsey calls these organisations ‘for­ward-look­ing companies’. They make ESG intrinsic to their strategy by deliberately applying those ESG aspects that connect to the core of their business. Forward-looking companies also promote competition by standing out and using good corporate citizenship to contribute to finding solutions to existential challenges, such as climate change. Distinguishing role Whatever your company's ambition, you will always need to comply with the ESG regulations, including those on environmental legislation, labour-law issues and governance. But forward-looking companies take it one step further, and usually raise the bar by focusing on certain aspects of ESG in which they can play a leading or distinguishing role. Ideally, this will also motivate similar companies to take a comparable route when it comes to ESG. Roadmap to social profit This ESG special publication provides company lawyers a concise overview of the most important ESG regulations, as well as concrete tools to give managers better advice in the field of ESG. Various aspects and elements of a company will be discussed: from the distribution chain to commercial property, from sustainable financing issues to the desired level of diversity and inclusivity within the population, and from governance to ESG litigation.
CMS Next
What’s next? In a world of ever-ac­cel­er­at­ing change, staying ahead of the curve and knowing what’s next for your business or sector is essential. At CMS, we see ourselves not only as your legal advisers but also as your business partners. We work together with you to not only resolve current issues but to anticipate future challenges and innovate to meet them. With our latest publication, CMS Next, our experts will regularly offer you insights into and fresh perspectives on a range of issues that businesses have to deal with – from ESG agendas to restructuring after the pandemic or facing the digital transformation. We will also share with you more about the work that we are doing for our clients, helping them innovate, grow and mitigate risk. To be able to provide you with the best support, we immerse ourselves in your world to understand your legal needs and challenges. However, it is equally important that you know who we are and how we can work with you. So, we invite you to meet our experts and catch a glimpse of what is happening inside CMS. Enjoy reading this publication, which we will update regularly with new content. CMS Executive Team
Carbon markets and COP26
After six years of negotiation, COP26 resolved one of the outstanding issues of the Paris Rulebook when it reached a consensus on a global carbon market mechanism. Article 6 of the Paris Agreement set...
A role for coal?
The Glasgow Climate Pact is the first COP decision to mention coal. This has been widely viewed as a real achievement. Even campaigners who slam the wording of the Pact tend to see the inclusion of coal...
Financing COP 26 outcomes
It was a watershed moment, according to Mark Carney. The UN Special Envoy for Climate Action and Finance was introducing the Glasgow Financial Alliance for Net Zero (Gfanz): over 450 banks, asset managers...
Greenhouse gas removals: new technologies and new markets
“Keep 1.5 degrees alive” was a common slogan at COP26. The Glasgow Climate Pact which concluded the conference reaffirmed the goal, set in the Paris Agreement, to “pursue efforts to limit the temperature...
The European Commission launches second call for large-scale project proposals...
The European Commission has launched on 26 October 2021 a second call for proposals of large-scale projects in the context of the Innovation Fund, with a budget of EUR 1.5 billion. Innovative clean energy...
The ceremonial opening of COP 26
Sunday morning saw the opening of COP26 in Glasgow. For the next two weeks, global heads of state, climate experts, and civil society will participate in a series of talks, negotiations, and events, all...
Climate Risk report
At COP26 institution after institution came forward to make stronger commitments to what is now broadly seen in most countries as a common goal: to reduce global carbon dioxide emissions. In particular, the private sector stepped up to the plate. For example, the Glas­gow Fin­an­cial Alliance for Net Zero posited a potential USD 130tn of private capital to accelerate the green trans­ition. COP26 also escalated the role of climate disclosures in achieving net zero. To achieve global comparability, the In­ter­na­tion­alSus­tain­ab­il­ity Standards Board (ISSB) is to deliver a global baseline that gives investors in­form­a­tion about the climate and sustainability risks in relation to companies they (may) invest in. Further, the UK introduced requirements for all listed companies to produce net-zero transition plans by 2023. These are seen as drivers for achieving climate-positive investing. International commercial lawyers have a crucial role to play in navigating and implementing the frameworks that emerge from COP26. Being guardians of the rule of law and facilitators of business and trade, lawyers will be at the centre of discussions on what our clients are required to do, and also on what they should do in light of wider societal and reputational considerations. It is in our clients’ interests that we guide them toward outcomes in line with wider societal ambitions. To do oth­er­wise would, among other things, risk placing them at a competitive disadvantage as the world pivots toward a clearer climate mitigation agenda. Climate Risk is a broad term and covers a multitude of concepts. This report focuses on three legal risks. First, of financial institutions holding corporates to account over perceived climate risks. Second, the risk to corporates on what they do and say about the impact on their business from (or from their business on) climate change. Finally, risk of litigation against corporates relating to climate change. As lawyers, what we see is broadly a great desire among our clients to be part of the solution on climate change. Almost all major corporate clients that we speak to wish to take positive steps that are in line with the desire for climate action, and also to capitalise on the op­por­tun­it­ies presen­ted as we transition to a net zero economy. We find that, among the investment community, vast capital is ready and available to be deployed on in­fra­struc­ture and other projects that will push the agenda forward. The question is whether there is sufficient clarity on the agenda, the rules and the risks involved. As this report shows, a key driver of Climate Risk for corporates revolves around information. Both quan­ti­fi­able in­form­a­tion about the potential direct impacts of climate change on particular sectors and businesses. And also con­sist­ent, comparable and reliable information about the companies themselves. Companies are pro­du­cing re­ports that are deluging investors on how they are measuring and managing their impact on and from climate change. However, there is some distance to go before investors can compare the information across the economy to make informed de­cisions. Or­gan­isa­tions such as Baringa, who have kindly con­trib­uted to this report, support the same clients from a parallel perspective. They help investors and corporates to assess climate risk exposure by using Baringa’s Climate Change Scenario Modelling. Tools such as these are invaluable for making the best decisions from the information available on risks to companies and the credibility of their adaptation and transition plans. On climate litigation, this is a direct and growing risk to corporates who fall under the spotlight of a variety of potential claims against an increasing number of po­ten­tial claimants. It is prudent to actively manage this risk through dispute avoidance strategies, having plans in place to deal quickly and effectively with the situation where a claim is brought, and understanding the key features that are typically at play in such litigation. Corporates are well aware that climate risks are an integral feature of their business planning. What some oc­ca­sion­ally criticise is the lack of long term cer­tainty. Mak­ing knee jerk decisions based on woolly polit­ic­al sen­ti­ments that could change tomorrow rarely makes good business sense. Clearer long term policy statements from governments and inter-gov­ern­ment­al in­sti­tu­tions can help on this, as well as clearer policies on how governments see the shape of the future zero carbon economy, and the pathways to it. Quite apart from the outcomes of COP26, with the private sector committing en masse to the climate agenda and the ability to scrutinise the private sector’s re­sponse through climate disclosures, net zero plans and other actions they take, we anticipate that the issue of Climate Risk will continue to rise up boardroom agendas.