As ESG issues take a front seat in business decision-making across Asia, law firms play a crucial role advising companies on how to navigate increasingly complex compliance requirements and mitigating emerging risks. As regulatory landscapes around ESG evolve rapidly, ALB recognises 15 law firms that are delivering outstanding legal counsel in this area.

Click below to read Q&As with two of the ranked firms:

• Allen & Gledhill
• ARMA LAW

From regulations on carbon emissions and supply chain integrity to ensuring fair treatment of workers and communities impacted by operations, ESG considerations on almost all aspects of businesses as stakeholders demand greater accountability and transparency.

No single practice area holds the issues and governance cut across traditional legal silos. Companies now require holistic legal guidance to integrate sustainability into core strategies while complying with changing regulations.

This year, ALB once again spotlights 15 firms that excel in this space. Firms walk the talk by setting ambitious sustainability targets and community initiatives.

Singaporean law firm Allen & Gledhill, for example, undertook a seven-month-long audit to reduce its carbon footprint and was Southeast Asia’s first law firm admitted to the United Nations Global Compact in 2022.

“We are keenly monitoring the development globally around ESG due diligence obligations, such as the EU Corporate Sustainability Due Diligence Directive, the German Supply Chain Due Diligence Act and the French Corporate Duty of Vigilance Law,” says Elsa Chen, co-head of Allen & Gledhill’s ESG & Public Policy Practice and regional co-head of its Competition and Foreign Investment Review Practice. “Such directives generally impose obligations on in-scope companies to assess and address the adverse impacts of their activities on people and the planet.”

“We also consider it critical to develop more thought leadership in the region, which is tailored to, and takes into account, the local context as ESG is multi-faceted and can take many dimensions,” Chen adds.

The exact nature of the challenges can vary from one jurisdiction to another. In Indonesia, for instance, the absence of comprehensive rules on carbon trading, carbon tax and other initiatives makes monetizing sustainability efforts inconsistent, but there are promising opportunities on the horizon.

“Many financing mechanisms now incorporate ESG factors into their criteria and businesses integrating ESG have benefited from improved reputations,” says Kirana D Sastrawijaya, senior partner at UMBRA – Strategic Legal Solutions in Indonesia, another of the ranked firms.

The regulatory gaps mean businesses require all-around legal guidance to meet compliance requirements.

“We are proud to have a dedicated team focused exclusively on handling ESG-related legal matters,” says Sastrawijaya, adding that her firm “collaborates with ESG technical consultants to provide comprehensive training on ESG strategy development and disclosure frameworks.”

Among its ESG highlights, UMBRA provided input to the Ministry of Energy and Mineral Resources, the Ministry of Environment and Forestry and PLN (the sole national electricity off-taker) on developing Indonesia’s carbon trading regulatory framework.

A prime case involved advising state-owned company PT Semen Indonesia on a landmark 5.85-trillion-rupiah ($398 million) rights issue transaction in 2022.

In addition to streamlining operations, the rights issue proceeds will fund PT Semen Indonesia’s sustainability initiatives. UMBRA’s leading work on this deal, which also advances Indonesia’s green transition, earned it the prestigious ESG-Advisory Law Firm of the Year award at the ALB Indonesia Law Awards 2023. UMBRA is also advising clients on pursuing carbon credits and renewable energy certificate programmes. It has guided several high-profile renewable energy and infrastructure projects that received industry recognition. Looking ahead, Sastrawijaya predicts that “requirements for ESG-related financing, incentives for ESG initiatives and more comprehensive regulations supporting ESG monetization efforts will significantly drive sustainable development in Indonesia.”