S. Environmental / ESG Issues in Business Transactions and Corporate Decision-Making

Environmental laws have far-reaching consequences in the business world. Corporations incur enormous costs complying with environmental requirements, remediating contaminated properties and defending "toxic tort" litigation. Complying with environmental requirements frequently affects the ability of corporations to operate effectively and profitably, expand or modify operations and meet financial projections. During the past several years, corporations and financial institutions have widened their focus beyond pure “environmental” risk to consider a wide range of sustainability, climate, forced labor, and other “Environmental, Social, and Governance” (or ESG) issues that are in many ways redefining how we assess and measure corporate performance, “purpose,” and value. ESG concerns, risks, and opportunities can affect stock value, access to capital, and institutional reputations, and are increasingly a key boardroom priority impacting corporate decision-making.

This seminar explores how ESG concerns affect a variety of business transactions, including mergers and acquisitions, securities offerings, lending and secured transactions and real estate development (involving virtually every industry, from heavy manufacturing to internet commerce). It will also examine how corporates and financial institutions are grappling with a myriad of ESG-related challenges, including among other things disclosure and reporting, data collection and verification, and investor and other stakeholder engagement. Students will have the opportunity to reflect upon the relative effectiveness of governments and capital markets as regulators of environmental and other ESG concerns.

During the semester, students will have an opportunity to review, and negotiate, operative contracts (e.g., asset and stock purchase agreements, credit agreements and lease agreements) derived from actual transactions, as well as securities offering disclosure language that complies (or fails to comply) with applicable SEC reporting rules. This seminar will also present students with a hypothetical transaction and other real-life business scenarios – students will analyze, discuss, and prepare client advice notes regarding related tactics and strategies for addressing related environmental and other ESG risks and concerns. At the end of the semester, students will participate in a mock negotiation exercise at the offices of Cravath, Swaine & Moore LLP to finalize the terms of the deal. There also will be occasional guest speakers on relevant topics.

Course grades will be based on homework assignments (10%); class participation, including class exercises and the mock transaction (30%); and an 8-hour take-home exam (60%).

The textbook for this class is "Environmental Aspects of Real Estate and Commercial Transactions: From Brownfields to Green Buildings, Fourth Edition," edited by James B. Witkin, ISBN 978-1-61632-911-2. Weekly readings from the textbook and other sources are assigned below. Discussion questions will accompany textbook readings and, for each class, pre-assigned students should be prepared to discuss them in class. The textbook will be supplemented by additional readings. All assignments should be handed in (hard copy or, preferably, electronic copy) prior to the start of class in which the assignment is due.