Deals of the YEar awards
As sustainable and ESG financings have proliferated across Latin America and the Caribbean, issuers have relied increasingly on their advisors to help chart the course through the constantly evolving landscape. This is especially so when it comes to the legal, regulatory and compliance challenges posed by sustainable financings – whether green instruments, social bonds or other ESG-themed products.
While ESG capability is fast becoming a mainstay of the legal industry, one firm has stood out this past year not just for the breadth and depth of its practice but also for having advised on a number of the standout ESG-related transactions in the region during the awards period: Shearman & Sterling, which wins the award for Sustainable Finance Law Firm of the Year.
Noting the “enormous growth” in sustainable finance across the region, Shearman & Sterling partner Roberta Cherman says the firm wants to be "at the frontline of this trend of doing business in a way that is both profitable and sustainable.”
During the awards period, the firm advised sovereigns, financial institutions and corporates in over a dozen of the region's most important sustainable financings spanning eight jurisdictions: Barbados, Belize, Brazil, Chile, the Dominican Republic, Guatemala, Mexico and Peru.
It advised corporations including Brazil’s Grupo Globo and the Dominican Republic’s EGE Haina on their inaugural sustainable issuances. The firm also worked on the $1.1 sustainability-linked bond placed by the Central America Bottling Corporation (CBC) in January 2022, a deal which won the award for Corporate ESG Deal of the Year.
The firm has also notably assisted the Central American Bank for Economic Integration (CABEI) in its bid to become a regional leader in ESG and green bond financings, advising on five offerings over the last three years
Shearman was also an advisor on the debt-for-nature swap for Belize, whose ground-breaking blue bond in November 2021 marked the first time a country in the Americas completed a debt conversion that aims to fund ocean conservation. That deal, which won the award for Sovereign Restructuring of the Year, also represented the world’s largest blue bond to date, at $364 million.
“It became the blueprint for a number of similar transactions for conservation that we are seeing and doing worldwide,” Cherman says, noting the firm’s involvement in subsequent nature-focused transactions, including in Barbados.
ESG-related advice extends well beyond the issuance of securities itself. Although the incorporation of ESG components is not a hard and fast requirement of issuers, failure to make good on ESG commitments, on the other hand, can create liabilities for firms. In addition, the collection and reporting ESG data also creates fresh demands for companies, especially at a time when environmental litigation is on the rise.
“Before and after the transaction, issuers have to think about the targets they want, how they will collect the data, and how to manage it in an ongoing basis,” says partner Jonathan Lewis – all of which creates more work for ESG-focused transaction lawyers. LF