33 ASIAN LEGAL BUSINESS CHINA • 亚洲法律杂志-中国版 WWW.LEGALBUSINESSONLINE.COM/CHINA has a more holistic understanding of what “development” is, and the Yangtze Belt accordingly places special emphasis on the coordination of ecological and environmental protection and economic and social development. According to Wang Lei, managing partner of Fadedongheng Law Firm headquartered in Nanjing, a city along the lower reaches of the Yangtze River: “The Yangtze Belt strategy emphasizes green development and ecological and environmental protection. This requires a large volume of ESG and environmental protection-related legal services.” Therefore, firms can actively “develop legal services in the fields of environmental impact assessment, cleaner production, pollution discharge permits, etc. to meet the needs of governments and businesses.” Sunshine Law Firm is based in Zhejiang, an important province through which the Yangtze River flows. Jane Chen, the firm’s director, similarly observes that “the Yangtze Belt strategy has brought about a promising market and development opportunities for ESG and environmental protection-related legal services. Law firms can use their professional services to focus on helping State-owned enterprises and listed companies achieve sustainable development goals and promoting green, quality development of the Yangtze Belt.” According to Chen, lawyers can serve all aspects of ESG and environmental protection, from compliance, “For example, as the Yangtze Belt strategy progresses, companies and projects need to assess and manage their possible environmental impact. Firms can provide such services, especially for companies that are subject to emission discharge controls or have been punished previously, to help them identify and assess potential environmental risks and develop corresponding management plans and solutions.” Relatedly, in terms of building environmental compliance systems, “with rising standards and tightening regulation, firms can help clients establish environmental compliance management systems, roll out greener production methods, improve supply chain management and ensure compliance with national and local environmental protection regulations.” In addition, the “Yangtze Belt strategy encourages green finance and investment in sustainable development. With the innovation and development of financial products related to green credit, green bonds, carbon trading, etc., financial institutions and enterprises are paying more attention to the ESG performance of projects in investment and financing activities. Law firms can provide green finance and ESG investment advisory services to help clients identify and manage ESG risks,” says Chen. Wang further explains that the equal emphasis the Yangtze Belt places on economic and social development as well as environmental protection creates ample opportunities for lawyers to “try innovative service models and provide more professional and efficient services, such as by adopting the ‘lawyer + technology + finance’ model, to offer enterprises with a full range of legal services for ESG and environmental protection.” When it comes to beefing up the ESG capabilities of companies along the Yangtze River, Chen says that Sunshine Law Firm has already worked on many successful deals. For example, the firm has advised the Jiangxi Regional Company of the Yangtze Ecology and Environmental Co., “providing legal services for multiple PPP projects such as those for water treatment and urban and rural sewage pipelines to effectively support the company in implementing concrete projects for its Yangtze River protection strategy.” In addition, Sunshine Law Firm has also assisted enterprises in exploring many innovative ESG deals. For example, in the first carbon offset iron ore deal on China’s iron and steel industry jointly completed by Nanjing Iron and Steel Company, Rio Tinto and China International Capital Corporation, Nanjing Iron and Steel Company used high-quality carbon credits purchased from a forestry project to offset the carbon emissions generated by Rio Tinto in iron ore mining, transportation and other processes in Western Australia. In this process, the firm provided Rio Tinto with comprehensive advice on the feasibility, legal risks and risk control of its carbon offset and trading plan under Chinese laws, policies and practices. In another groundbreaking green trust project, Shanghai-based Zhonghai Trust used the Chinese Certified Emission Reduction (CCER) held by a certain company as the underlying trust assets for fund-raising. Sunshine Law Firm, leveraging its rich ESG practice experience, helped all parties to the trust clarify the legal attributes of CCER and carbon quotas, and provided innovative solutions for transaction structuring, asset management, etc. Apart from boosting the ESG capabilities of companies, lawyers can also more directly participate in the protection of the Yangtze River environment through litigation, pro-bono services, etc. Wang shares that Fadedongheng has recently acted in such a public interest administrative lawsuit. In this case, a county-level environmental protection bureau failed to take effective measures to urge relevant companies to prevent and control environmental violations of directly discharging manure from sewage collection tanks into the Yangtze River, resulting in continuous infringement on REGIONAL REPORT Jane Chen 陈臻 Wang Lei 王磊 Tang Yuzhou 唐昱州
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