Andrew Sherman a Panelist for Strafford Webinar "Environmental, Social, and Governance Considerations in M&A: Mitigating ESG Risks, Maximizing ESG Benefit"

Andrew Sherman, partner in Seyfarth's Corporate department, will serve as a panelist for the Strafford webinar "Environmental, Social, and Governance Considerations in M&A: Mitigating ESG Risks, Maximizing ESG Benefit" on December 17, 2020.

Description

ESG concerns are becoming increasingly important in M&A transactions. There is increased focus for deal counsel to understand and address key ESG risks and their potential impact on the target and the acquiring company's long-term value. ESG risks can include environmental, health and safety, and human capital management practices, regulatory noncompliance, shareholder activism or litigation, and reputational harm.

ESG is increasingly becoming a key component of M&A due diligence. Boards are now tasked with overseeing climate change and other environmental risks, employee health and safety, pay equity, diversity, data security and customer privacy, consumer and product safety standards, disaster recovery and crisis management, corporate governance, and the ethical operation of the target's supply chain.

To mitigate against ESG risks, buyers should require ESG-specific representations and warranties in the acquisition agreement. These can range from customary representations and warranties on matters such as legal and regulatory compliance, accuracy of securities filings, employee matters, and so-called "Weinstein clauses" regarding sexual harassment. Buyers should also consider procedures for integrating ESG standards and protocols post-closing.

The panel will discusses the new focus on ESG risks in corporate acquisitions and how to address these issues in due diligence and M&A and other documentation.

The panel will review these and other key issues:

• Rising significance of ESG in M&A: relationship to long-term valuation
• New regulatory risks associated ESG
• Due diligence including evaluation of ESG governance and management policies and practices, the relevance of ESG factors to the target's industry and operations, and identifying current ESG risks, including shareholder actions or third-party claims
• Reps and warranties and other contractual approaches to mitigating ESG risks, maximizing ESG benefits
• Assessing ESG "fit" between acquirer and target; post-closing integration and governance