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ESG – Environmental, social and governance

Environmental, social and governance (ESG) criteria are at the forefront of corporate strategies, due to investor, customer and regulator expectations. The topic has been gaining momentum and is expected to accelerate in the coming years.

ESG is broadening its scope of influence to cover all economic and policy sectors now. From energy, finance and urban planning to tax – these are just a few of the areas that are being impacted.

We advise clients – from multinationals to start ups – in all sectors and areas of ESG-related law, including future mobility, climate change strategies (decarbonisation, renewables, energy efficiency), ESG due diligence and risk assessments, corporate digital responsibility, sustainable supply chains, whistleblowing, waste management, ESG funds and green infrastructure and real estate finance.

 Our approach is integrated and multidisciplinary – this enables us to anticipate and understand the issues in the rapidly evolving ESG landscape which in turn allows us to develop innovative solutions for and with our clients.

With their in-depth expertise in these areas, our teams of lawyers around the world identify risks and threats while seizing opportunities arising from the increasing focus on ESG for our clients.

Our aim is to help our clients successfully meet the demands of climate change, technological disruption, urbanisation and social concerns.

We have extensive experience in supporting international investment projects for renewables in Russia.

Our firm provides a full range of legal and tax services to the Russian renewable energy market, including:

  • comprehensive advice on project structuring and Russian market entry, including localisation issues;
  • joint venture and other corporate assistance;
  • legal support in cooperation with state authorities;
  • tax optimisation and other tax related advice;
  • drafting and negotiating investment agreements, delivery, installation and service agreements for generating equipment, construction agreements and EPC contracts;
  • comprehensive legal support throughout project implementation.

Wind power in Russia

We are member of the Russian Association of Wind Power Industry (RAWI), an independent organisation uniting all the major market players and cultivating the wind energy market. 

We have extensive expertise in providing legal advice to wind power industry. For example, we have advised Vestas, a leading global manufacturer of wind turbines, on cooperation with Rusnano and Fortum in implementing a construction project for Russia’s largest wind park in the Ulyanovsk Region.

Hydrogen in Russia

Russia is witnessing a growing interest at governmental and industry sector levels in the development of the hydrogen industry. In October 2020, Russia adopted and published the Plan of Action “Development of Hydrogen Energy in the Russian Federation to 2024”, which has become the first official document on the development of hydrogen energy in the country.

We have a dedicated team of lawyers advising on the emerging regulation in the hydrogen industry. Please see below our recent contributions to the development of the hydrogen industry and regulation in Russia.

Waste management in Russia

Since 2019, Russia has been implementing a “waste reform” programme to radically change its municipal waste management system across the country. Many of the scheduled preparation and organisational arrangements have already been implemented or are in the pipeline. Our experts are monitoring the reform and reporting on the challenges and opportunities of this reform for investors.  Please see our latest articles below.
 


Please contact any of our ESG lawyers to explore solutions to your needs.

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Clean Energy, Environment & Climate Change
With more than 450 lawyers in 75 offices across the globe, our Energy & Climate Change Group is one of the largest of its kind.It was founded on groun
Governance, Risk & Compliance - GRC International
Companies across all sectors and of all sizes are facing increasing pressure from investors, customers and regulators to comply with environmental, so
Social / Human rights
Environmental, social, and governance (ESG) strategies often concentrate more on environmental issues. However, social factors are increasingly import
Sustainable Finance
Environmental, social and governance (ESG) considerations are integral parts of sustainable economic development and play an increasingly important ro

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15/06/2022
The former Mo­scow of­fice of CMS to con­tin­ue work­ing as an in­de­pend­ent law...
On 15 June 2022, the former Mo­scow of­fice of the in­ter­na­tion­al law firm CMS an­nounces the start of work as an in­de­pend­ent law firm un­der the new brand name SEAM­LESS Leg­al.Over 80 col­leagues of the Mo­scow of­fice con­tin­ue work­ing as one team, led by Man­aging Part­ner Jean-Fran­cois Mar­quaire and Seni­or Part­ner Le­onid Zubar­ev.We keep ad­vising our cli­ents across all 23 prac­tices and sec­tors: We lean on 30 years of ex­pert­ise and an im­pec­cable repu­ta­tion as part of an in­ter­na­tion­al law firm. We have al­ways abided by strict pro­fes­sion­al stand­ards and will con­tin­ue provid­ing ser­vices of the highest qual­ity. Jean-Fran­cois Mar­quaire, Man­aging Part­ner: “We are proud of hav­ing been able to cre­ate and pre­serve a united team with a friendly cor­por­ate cul­ture and re­spons­ible at­ti­tude to our busi­ness.”Le­onid Zubar­ev, Seni­or Part­ner: “Our new brand SEAM­LESS Leg­al most ac­cur­ately re­flects the ap­proach to work that has de­veloped over the years in our firm – in­teg­rity and co­her­ence, im­pec­cab­il­ity, con­tinu­ity and un­in­ter­rup­ted sup­port to our cli­ents at any time."
01/06/2022
Sakhal­in car­bon ex­per­i­ment law to come in­to force on 1 Septem­ber 2022
The leg­al frame­work for the pos­sible mod­el of car­bon reg­u­la­tion in Rus­sia has been es­tab­lished in a Fed­er­al Law* ad­op­ted on 6 March 2022 (the “Law”). This mod­el will be tested dur­ing the ex­per­i­ment in the Sakhal­in Re­gion from 1 Septem­ber 2022 to 31 Decem­ber 2028.The main goal of the ex­per­i­ment is to achieve car­bon neut­ral­ity in Sakhal­in by the end of 2025.The ap­proved car­bon man­age­ment mod­el will likely be ex­ten­ded to oth­er re­gions of the Rus­si­an Fed­er­a­tion if the ex­per­i­ment proves suc­cess­ful.Main pro­vi­sions of the LawThe Law in­tro­duces quotas for green­house gas emis­sions as a new in­stru­ment for car­bon reg­u­la­tion and as the basis of the ex­per­i­ment.A quota is defined as a cer­tain amount of al­low­able green­house gas emis­sions an­nu­ally set by the com­pet­ent body for reg­u­lated com­pan­ies, based on an ap­proved meth­od­o­logy, to achieve car­bon neut­ral­ity. The re­gion­al gov­ern­ment will ap­prove the list of such com­pan­ies.If a com­pany ex­ceeds the es­tab­lished quota, it will be charged at rates that the Rus­si­an gov­ern­ment will ap­prove. On the con­trary, if the quota for the ac­count­ing year is met, units of ful­fil­ment of the quota in an amount cor­res­pond­ing to the dif­fer­ence between the es­tab­lished quota and the ac­tu­al mass of green­house gas emis­sions will be cred­ited to the ac­count of the or­gan­isa­tion in a spe­cial re­gister.Sub­sequently, the com­pany may cred­it such im­ple­ment­a­tion units to its ac­count in the re­gister to meet its as­signed quota or the com­pany may trans­fer them to an­oth­er en­tity for which they are ne­ces­sary to meet its own quota. In this way, the pre­requis­ites for the emer­gence of a mar­ket for trad­ing in quota im­ple­ment­a­tion units are cre­ated.In ad­di­tion to quotas, the Law en­vis­ages oth­er mech­an­isms to reg­u­late emis­sions and ab­sorp­tion of green­house gases:• An in­vent­ory of emis­sions will be made once a year at the re­gion­al level.• Reg­u­lated or­gan­isa­tions will have to con­duct man­dat­ory car­bon re­port­ing.• Eco­nom­ic and fin­an­cial mech­an­isms that stim­u­late emis­sion re­duc­tions will be es­tab­lished. They may be real­ised in the form of tax cred­its for reg­u­lated or­gan­isa­tions or sub­sidies for the re­im­burse­ment of pro­duc­tion costs.Com­mentsIn con­trast to the pre­vi­ously ad­op­ted fed­er­al law on lim­it­ing green­house gas emis­sions (which we re­por­ted on earli­er), the Law stip­u­lates stricter reg­u­la­tion of green­house gas emis­sions and ab­sorp­tion in the ex­per­i­ment­al area through quotas.Even though im­ple­ment­ing reg­u­la­tions provided for by the Law in fur­ther­ance of its pro­vi­sions have yet to be en­acted, the rules the Law cre­ates are already a bold step for­ward in the cli­mate-change agenda.However, in the cur­rent cir­cum­stances, the suc­cess­ful im­ple­ment­a­tion of the ex­per­i­ment with­in the an­nounced time­frame raises le­git­im­ate con­cerns. It is very likely that, by the time the Law comes in­to force in Septem­ber 2022, the plans for the ex­per­i­ment will have to be sub­stan­tially re­vised due to the need to real­loc­ate budget­ary re­sources for oth­er needs.* In Rus­si­anCo-au­thored by Elena Foteeva, Paralegal in Real Es­tate.
08/04/2022
Bill in­tro­duced in Rus­si­an State Duma al­low­ing sus­pen­sion and ter­min­a­tion...
On 22 March 2022, Pavel Krashe­n­in­nikov, Head of the State-build­ing and Le­gis­la­tion Com­mit­tee of the Rus­si­an State Duma, sub­mit­ted a bill*, which makes it pos­sible to ter­min­ate and sus­pend ob­lig­a­tions due to sanc­tions im­posed on Rus­sia. The bill also es­tab­lishes the pos­sib­il­ity for parties to be re­leased from li­ab­il­ity for breach of con­tract.The fol­low­ing de­scribes this le­gis­lat­ive ini­ti­at­ive in more de­tail:Ter­min­a­tion of ob­lig­a­tion­sAc­cord­ing to the bill, an ob­lig­a­tion is ter­min­ated in full or in part if its per­form­ance “ob­ject­ively be­comes defin­it­ively im­possible” “in the con­text of ‘un­friendly’ ac­tions of for­eign states and in­ter­na­tion­al or­gan­isa­tions as­so­ci­ated with the im­pos­i­tion of re­strict­ive meas­ures” against Rus­si­an in­di­vidu­als and com­pan­ies (i.e. for­eign sanc­tions).Ex­emp­tion of li­ab­il­ity for breach of ob­lig­a­tion­sThe bill provides an ex­emp­tion from li­ab­il­ity for a breach of ob­lig­a­tion for a per­son who proves that prop­er per­form­ance has “ob­ject­ively proved to be tem­por­ar­ily im­possible” in the con­text of for­eign sanc­tions. In this case, the ob­lig­a­tions se­cur­ing the de­faul­ted trans­ac­tion are also un­en­force­able un­less the parties agree oth­er­wise after the bill comes in­to force.Ter­min­a­tion of con­tractThe bill in­tro­duces the right to uni­lat­er­ally ter­min­ate a con­tract if the oth­er party to the con­tract has not per­formed, or per­formed im­prop­erly, its ob­lig­a­tion be­cause such per­form­ance is tem­por­ar­ily im­possible in the con­text of sanc­tions. The party au­thor­ised to do so must give a ter­min­a­tion no­tice to the oth­er party with­in a reas­on­able time. The col­lat­er­al se­cur­ing the ob­lig­a­tions of the parties, which shall sur­vive the uni­lat­er­al ter­min­a­tion of the con­tract or are con­nec­ted with the ter­min­a­tion, shall con­tin­ue to ex­ist, un­less oth­er­wise provided for by law or the con­tract.Se­cur­ity de­positThe bill sub­stan­tially mod­i­fies the treat­ment of se­cur­ity pay­ments.  Un­der this draft law, after 23 Feb­ru­ary 2022, the parties may enter in­to an agree­ment for a se­cur­ity pay­ment to se­cure oth­er ob­lig­a­tions. The pay­ment could con­sist of the de­pos­it of shares, bonds, oth­er se­cur­it­ies or gen­er­ic items.Re­pay­ment by Rus­si­an joint-stock com­pan­ies of loans is­sued by their for­eign con­trolling per­son­sThe bill en­titles Rus­si­an joint-stock com­pan­ies, in­stead of re­pay­ing a loan to lenders who are for­eign con­trolling per­sons of such com­pan­ies, to place ad­di­tion­al shares of a cer­tain cat­egory or type in fa­vour of such lenders. At the same time, joint-stock com­pan­ies are al­lowed to is­sue pref­er­en­tial shares whose nom­in­al value may ex­ceed 25% of the share cap­it­al.The bill does not re­quire proof of a caus­al link between the im­pos­i­tion of sanc­tions and the de­cision to place ad­di­tion­al shares in fa­vour of a lender in­stead of re­pay­ing the loan and pay­ing in­terest on it.Pro­tec­tion not for al­lAc­cord­ing to the bill, the above sup­port meas­ures do not ap­ply to per­sons who “con­trib­uted to the ‘un­friendly’ ac­tions of for­eign states and in­ter­na­tion­al or­gan­isa­tions re­lated to the im­pos­i­tion of re­strict­ive meas­ures” against Rus­si­an in­di­vidu­als and or­gan­isa­tions. The bill does not cla­ri­fy ex­actly what is meant by “con­trib­ut­ing”.Let­ter from the Cham­ber of Com­merce and In­dustry of the Rus­si­an Fed­er­a­tion­In con­nec­tion with the bill, the Cham­ber of Com­merce and In­dustry of the Rus­si­an Fed­er­a­tion has sus­pen­ded its re­view of ap­plic­a­tions for the is­su­ance of find­ings of force ma­jeure un­der con­tracts that were con­cluded with­in the frame­work of do­mest­ic eco­nom­ic activ­ity in con­nec­tion with sanc­tions on for­eign com­pon­ents and equip­ment (Let­ter No. PR/0181* of the Cham­ber of Com­merce and In­dustry of the Rus­si­an Fed­er­a­tion dated 22 March 2022).* In Rus­si­an
14/03/2022
The Mo­scow of­fice of CMS to con­tin­ue as an in­de­pend­ent law firm
Dear FriendsWe have been through a lot dur­ing 30 years in Rus­sia. Now a dif­fi­cult de­cision has been taken by CMS to leave the Rus­si­an mar­ket. We are grate­ful to our in­ter­na­tion­al col­leagues for their...
28/01/2022
Leg­al de­vel­op­ments that may af­fect your busi­ness in 2022
CMS Rus­sia ex­perts have pre­pared their an­nu­al se­lec­tion of the most sig­ni­fic­ant leg­al de­vel­op­ments that may af­fect your busi­ness in Rus­sia in 2022.
03/11/2021
CMS Rus­sia at the con­fer­ence ded­ic­ated to ESG in Rus­sia and France
On Oc­to­ber 26, 2021 the Franco-Rus­si­an Cham­ber of Com­merce and In­dustry (CCI France Russie), Nor­nick­el and the Na­tion­al Coun­cil on Cor­por­ate Gov­ernance with the sup­port of the French Em­bassy in Rus­sia held an ESG con­fer­ence. French and Rus­si­an reg­u­lat­ors, fin­an­cial in­sti­tu­tions and in­dus­tri­al cor­por­a­tions dis­cussed the pro­spects and chal­lenges of the new ESG real­ity. The event brought to­geth­er ex­perts from high-pro­file com­pan­ies and or­gan­isa­tions in­clud­ing France Dip­lo­matie, the Bank of Rus­sia, VEB.RF, Mo­scow Ex­change, Ros­bank, Gazprom­bank, Boiron, Schneider Elec­tric, La­farge­Holcim, Saint-Gobain, etc.Olga Odint­sova, Coun­sel and Head of New Busi­nesses and Product De­vel­op­ment at CMS Rus­sia, mod­er­ated a ses­sion on en­vir­on­ment­al re­spons­ib­il­ity and busi­ness ef­fi­ciency and a ses­sion on ESG rank­ings in Rus­sia and France.The En­vir­on­ment­al, So­cial & Cor­por­ate Gov­ernance agenda has firmly rooted in the glob­al eco­nomy to elim­in­ate in­equal­ity and en­sure ef­fi­cient use of nat­ur­al re­sources. Green com­pan­ies that com­ply with ESG cri­ter­ia get easi­er ac­cess to in­ter­na­tion­al in­vest­ments, while busi­nesses not com­mit­ted to ESG prin­ciples are find­ing it in­creas­ingly dif­fi­cult to get ac­cess to such in­vest­ments. Read the full event re­port on the web­site of the Franco-Rus­si­an Cham­ber of Com­merce and In­dustry. 
01/11/2021
Do­ing busi­ness in Rus­sia
This is the new edi­tion of the CMS Do­ing busi­ness in Rus­sia guide. 
19/08/2021
The Re­new­able En­ergy Law Re­view 2021
After years of be­ing con­sidered an 'oil-and-gas coun­try', Rus­sia now has an ex­pand­ing re­new­able en­ergy sec­tor fol­low­ing a re­cent spate of for­eign in­vest­ment and the in­stall­a­tion and con­struc­tion of sev­er­al re­new­able en­ergy pro­jects.Read the Rus­sia chapter if the Re­new­able En­ergy Law Re­view 2021, pre­pared by Thomas Heidemann, Part­ner at CMS Rus­sia, and Dmitry Bog­dan­ov, Seni­or As­so­ci­ate at CMS Rus­sia. The chapter provides an over­view of the Rus­si­an reg­u­la­tions in the re­new­able en­ergy in­dustry.This art­icle was pre­pared for and first pub­lished by The Law Re­views in Au­gust 2021.
03/08/2021
The En­ergy Reg­u­la­tion and Mar­kets Re­view 2021
Rus­sia’s vast geo­graphy is an im­port­ant de­term­in­ant of its eco­nom­ic activ­ity. It has the world’s largest proven nat­ur­al gas re­serves and acts as the largest ex­port­er of nat­ur­al gas. It is also the second-largest ex­port­er of pet­ro­leum. Enorm­ous en­ergy re­sources en­able pro­du­cers to gen­er­ate elec­tri­city in thermal, hy­dro and nuc­le­ar power plants and by us­ing gas, oil and coal.Read the Rus­sia Chapter of the En­ergy Reg­u­la­tion and Mar­kets Re­view 2021, pre­pared by Thomas Heidemann, Part­ner at CMS Rus­sia, and Dmitry Bog­dan­ov, Seni­or As­so­ci­ate at CMS Rus­sia. The chapter provides an over­view of the Rus­si­an reg­u­la­tions in the en­ergy in­dustry, in­clud­ing elec­tri­city sec­tor, oil and gas sec­tor, re­new­able en­ergy and en­ergy ef­fi­ciency.This art­icle was pre­pared for and first pub­lished by The Law Re­views in June 2021.
16/06/2021
CMS In­fra­struc­ture In­dex: Ac­cel­er­at­ing trans­form­a­tion
The in­fra­struc­ture mar­ket has re­mained re­si­li­ent in the face of COV­ID-19. The CMS In­fra­struc­ture In­dex has ranked 50 coun­tries by their at­tract­ive­ness for in­fra­struc­ture in­vest­ment and it paints a very pos­it­ive pic­ture. Singa­pore tops the lead­er board, bolstered by the un­veil­ing of its Green Plan 2030 which aims to ad­vance sus­tain­able de­vel­op­ment and re­duce the coun­try’s car­bon foot­print. There are big spend­ing plans in every re­gion as gov­ern­ments seek to close in­fra­struc­ture gaps, re­cov­er from the pan­dem­ic and stim­u­late their eco­nom­ies.   Please click through the re­port or down­load the pdf ver­sion at the bot­tom of this page.
15/06/2021
CMS ad­vises PJSC URALKALI on its de­but $1.25bn sus­tain­ab­il­ity-linked pre-ex­port...
CMS has ad­vised PJSC Uralkali on its de­but $1.25bn sus­tain­ab­il­ity-linked pre-ex­port fin­ance fa­cil­ity ar­ranged by, among oth­ers, COM­MERZBANK CRÉDIT AG­RI­COLE COR­POR­ATE & IN­VEST­MENT BANK, ING BANK, SO­CI­ETE...
22/04/2021
En­vir­on­ment, en­ergy ef­fi­ciency and re­new­ables
In this chapter of Do­ing busi­ness in Rus­sia, we dis­cuss the fol­low­ing as­pects of cli­mate change is­sues in the coun­try: en­vir­on­ment­al reg­u­la­tions, en­ergy ef­fi­ciency re­quire­ments and the re­new­ables sec­tor.