23 ASIAN LEGAL BUSINESS CHINA • 亚洲法律杂志-中国版 WWW.LEGALBUSINESSONLINE.COM/CHINA scrutiny over issues such as anti-unfair competition, brand reputation, data privacy, and more.” Shi Lin and Wang Xiaodong, partners at Shihui Partners with a focus on ESG services, have observed that as ESG concepts and practices continue to evolve, the approaches to ESG taken by various industries are diverging to reflect their unique development characteristics. Consequently, Shihui Partners tailors its ESG legal services to suit the specific sector in which a client operates. For instance, in the Internet and high-tech industries, where data is a core asset, the demand for ESG legal services primarily revolves around data security and user privacy. These industries also prioritize ESG practices in corporate governance, supply chain management, labor, and employment. To meet these needs, Shihui Partners offers customized services, including the construction of compliance systems, training, investigations, and data compliance demonstrations for innovative business models. State-owned enterprises (SOEs) represent another client group with distinct requirements. In recent years, the government has rolled out numerous policies encouraging SOEs to adopt and implement ESG principles. A significant portion of Shihui Partners’ ESG clientele consists of SOEs, for which the firm provides services such as the development of compliance systems, training programs, and investigations. HIGHLIGHTING INNOVATION In the evolving field of ESG legal services, lawyers acknowledge that they frequently assist clients with pioneering “market-first” projects or deals. These ventures test their skills but also add to the excitement of delivering ESG advisory services. In 2023, China reactivated its voluntary carbon emission reduction market following a six-year pause, introducing a raft of new regulations in quick succession. The Chinese Certified Emission Reduction (CCER) project has once again captured market interest. Jiang reflects on a past hurdle his team helped clients navigate during the market’s suspension. “When the National Development and Reform Commission halted CCER approvals in 2017, many domestic developers pivoted to working with international standards like the Verified Carbon Standard (VCS) and the Gold Standard (GS). We adapted to market needs by addressing issues arising from these various standards and jurisdictions.” Early in 2023, the management body of the VCS unexpectedly discontinued the rice methodology, halting the issuance of credits for rice projects and causing a cascade of project defaults. At the time, China hosted a large number of VCS rice projects, with primary buyers being energy or chemical conglomerates from leading developed countries. “The transaction documents for these rice projects were varied and subject to different legal frameworks. We employed a multi-jurisdictional analysis model, typically used in cross-border transactions, to deliver as comprehensive and commercially sound an analysis as possible in a brief timeframe. This involved examining the legal characterization of the same fact across different jurisdictions and thoroughly addressing enforceability and the potential invocation of force majeure clauses,” recounts Jiang. “When facing such intricate issues that lack market precedent and span multiple jurisdictions, our ability to truly assist clients hinges on understanding their commercial objectives and presenting our services as a polished legal product,” Jiang concludes. When discussing the newly relaunched CCER market, Wan explains that he and his team are at the forefront of pertinent transactions. They have recently been aiding a carbon technology firm in their CCER investments. Wan elaborates, “We assist our client in determining if the project they’ve invested in is part of the initial group of the four methodologies that have been released. We also ensure the project’s compliance, check for any defects in project ownership, and safeguard the client’s investment, especially when thirdparty guarantees are involved. Many of these issues were groundbreaking.” Ren points out that ESG legal services are exceptionally comprehensive, representing a significant innovation. Tian Yuan Law Firm, according to Ren, has offered a complete range of ESG compliance services to clients across various sectors—construction, energy, automotive, finance, and the internet— amassing extensive experience in fullprocess ESG services. Ren continues to detail the breadth of ESG services, which encompass at least nine key areas: “Firstly, lawyers help clients craft ESG strategic plans and establish internal compliance management systems. Secondly, they ensure clients meet ESG information disclosure requirements. Thirdly, they conduct ESG due diligence, particularly during mergers, acquisitions, and supply chain management, to mitigate ESG risks.” “Fourthly, we provide resolution services for ESG-related disputes. Fifth, we conduct ESG compliance reviews and risk assessments. Sixth, we offer comprehensive legal services for clients to implement improvement measures. Seventh, we collaborate with other professionals to help clients prepare ESG reports and respond to CDP ESG
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