Last May, global law firms Shearman & Sterling and Allen & Overy concluded a merger that not only created one of the largest transatlantic powerhouses with estimated revenues of $3.5 billion, but also reinforced the capability of its regional practices, including Latin America.
This was also true of its prowess in the realm of sustainable finance – both pre-merger firms having previously been recognized for their exemplary work advising on green, social and sustainability transactions. So it’s little surprise that the merged entity, which wins Sustainable Finance Law Firm of the Year, would have redoubled clout in the arena.
The list of sustainable deals the firm participated in during the awards period is testimony enough: it included advising the governments of Chile and Guatemala on the issuance of green and social bonds; supporting Banco do Brasil’s efforts to raise $750 million for environmental and social financing; and, working with the IFC, IDB Invest and BancoEstado to structure the $344 million financing of an electric bus project in Santiago, among other deals.
“In some ways, this is not something new for us. We have been working with the multilaterals and other government agencies, and they have always imposed really high and strict standards for ESG as a baseline for obtaining financing,” says partner Sami Nir. “What we are seeing now is a shift for ESG goals as a basic financing requirement that is becoming more mainstream.”
He notes that, right now, commercial banks are keener to provide green loans and other kinds of sustainable financing, and capital markets are evolving towards more sophisticated structures to address a broader range of goals in different areas. One example is the range of debt-for-nature deals such as blue bonds that have emerged in countries including Belize and Brazil.
“Our clients are curious about whether sustainable deals expand their abilities to finance their projects,” partner Manuel Orillac says. “But it is not just about finance, it is also about advancing other objectives. We see this as a positive movement for society in general.”
And if companies and governments are responding to societal pressure for more sustainable financing arrangements, investors also need to play their role for the market to continue to develop at a fast pace.
“Those deals marry the need to finance projects and a recognition, and a desire to address the big issues, whether they are rooted in discrimination, on climate change or other policy objectives,” Orillac points out. “And perhaps a promise, which I do not think is yet borne out by the data, that at some point investors will reward projects.”