Social Responsibility Risk

By:

Nacim Bounouara (FP&R Partner, London) and Robert Cockburn (FP&R Senior Associate, Leeds) published a chapter entitled “Social Responsibility Risk” in the Third Edition of The Project Finance Law Review.

Environmental, social and governance (ESG) considerations are at the forefront of companies’ agendas across the globe. Companies are under increased pressure to develop sustainable and responsible business models – Project Finance stakeholders are no different.

This Chapter covers ESG issues arising in the context of Project Finance. Nacim and Robert discuss the social function of Project Finance, including the relevance of legal land compliance frameworks in which projects operate generally as well as from a geographic and sector perspective. They also look at the environmental and social impact which projects confront, with risks which arise at different stages of a project, the laws and regulations that affect them and the various voluntary standards developed to promote ESG considerations (e.g. the Equator Principles). The human impact is similarly argued to be of importance, especially considering labour, HSE law and regulation as well as concerns around local communities, indigenous people and human rights more broadly. With each project, project finance stakeholders look to mitigate the risk of social responsibility by undergoing ESG assessment and due diligence as well as including drafting in the finance and project documentation.

To read the full Chapter, you can access the link

This article was originally published in The Project Finance Law Review, June 2021 and is reproduced with permission from the publisher