Translator：Xiong Yajie

At 14:00 on November 24, 2023, Lawyer Guoliang He, senior partner of Beijing Jincheng Tongda (Shanghai) Law Firm, visited Shanghai Landing Law Office to hold a special lecture on "Stay Involved or Stay Out of the Matter? - From Three Perspectives on Discussing the Practice and Exploration of ESG Legal Services". Libo Wang, a lawyer in the Corporate and M&A Department of Shanghai Landing Law Office and head of Landing ESG business, hosted this lecture.

Lawyer Guoliang He introduced the current status of ESG third-party service practice that has become popular in recent years from the perspective of "Why should lawyers pay attention to ESG? Should lawyers stay involved or stay out of the matter?" and pointed out that in the field of ESG services, lawyers are more qualified credibility, but the participation of the lawyer industry in the ESG field is generally not high. Lawyers who are concerned about this field will first solve the following three legal difficulties.

The first difficulty in understanding is the relationship between moral evaluation and legal evaluation. How to conduct legal evaluation of ESG derived from ethics and morality? ESG originates from ethics. In June 2004, the United Nations first proposed the concept of ESG in "Who Cares Wins". It is proposed that the three elements of E, S, and G should be introduced into financial analysis, asset management, and securities transactions, and it is advocated that the corporate world/business community should fulfill broad social responsibilities while developing the economy. As a result, ESG changes from a moral level to an investment level evaluation standard. In 2006, the United Nations Principles of Responsible Investments (UNPRI) proposed the "Principles of Responsible Investment" (PRI), recommending that investors incorporate ESG factors into the investment decision-making process. PRI lists 6 principles and 34 suggested feasibility solutions are closely related to legal issues.

The second difficulty in understanding is the relationship between technological progress and legal progress. How can ESG, which is highly dependent on technological progress, be legally regulated? At present, the carbon field has the highest technological content. The capture, quantification and treatment of carbon are mainly technical issues. However, technological progress itself does not exclude legal intervention. In addition, carbon finance and other matters are the direct business of lawyers. Many aspects of legal business are also inseparable from technical knowledge, and legal businesses with technical thresholds are more competitive.

The third difficulty in understanding is the relationship between financial information and legal information. That is, how can ESG, which emphasizes qualitative information, be combined with qualitative legal information? Take IPO due diligence as an example. If a lawyer only relies on the data provided by the accounting firm and fails to verify the authenticity of major client transactions, he will bear corresponding responsibilities. Therefore, from three perspectives: ethics, technology, and finance, ESG does not break away from the scope of legal services.

The second part of Lawyer He’s lecture is the fulcrum of ESG legal services. The ESG system has three key links, namely ESG disclosure, ESG evaluation and ESG investment. Lawyer He explained in detail the basic methods for lawyers to master and understand ESG information disclosure, and specifically guided lawyers on how to learn from the six dimensions of ESG international standards, domestic standards and policies and regulations, exchange rules, group standards, state-owned assets guidelines, and regulatory department regulations to understand ESG-related standards, policies and regulations.

The third part of the lecture focused on determining the key points of ESG legal services. Based on his rich practical experience and professional skills, Lawyer He explained in a simple way the key points that lawyers should pay attention to when disclosing ESG information. He then provided specific business guidances on how to choose due diligence standards and formed a due diligence checklist and provided due diligence services based on the industry in which the client is located from the perspective of ESG.

Finally, lawyer Guoliang He sent a message to lawyers who are interested in engaging in ESG legal services: treat hot topics calmly, consider situations as opportunities, and be pragmatic and provide practical services. And he hope to have good interactions with Landing Law offices in ESG professionalism and business cooperation in the future.

This lecture was held simultaneously online and offline. More than 750 people attended the lecture online and offline, and the interaction was lively both onsite and online.