Environmental sustainability is everyone's business

A&O reached a watershed moment in 2023 when the firm published its carbon emissions data as part of the worldwide Carbon Disclosure Project (CDP).

Only by operating in a sustainable way can we reduce our impact, play our part in the global decarbonisation effort and contribute to our clients’ environmental goals and obligations. Signing up to the CDP is a clear sign that we take our environmental responsibilities seriously and are committed to making progress.

That progress includes reaching our own science-based target of halving our carbon emissions by 2030 and in so doing, as part of our clients’ supply chains, helping them decarbonise in line with the Paris Agreement framework to limit global warming.

It also shows we’re listening to our clients, says Jakub. “Joining the CDP is something our clients have asked us to do. Our targets have been official and in the public domain since 2021. Now we have reinforced this message.”

The CDP runs the global environmental disclosure system. It’s a portal where thousands of companies, cities, states and regions input their carbon emissions and other environmental data to help them measure and manage their risks and opportunities on climate change, water security and deforestation. Since 2010, when the project started, more than 18,700 companies have reported on it, including more than 60% of our clients by revenue.

“From the data we publish on the CDP, our clients can see how much of their carbon footprint we and our supply chain are responsible for. This insight is invaluable on their journey to achieving net zero,” says Jakub.

Measurement is key

The Paris Agreement, which sets out a global framework to limit global warming in this century to well below 2°C above pre-industrial levels, and preferably limit the increase to 1.5 °C, placed obligations on businesses to decarbonise their supply chains. That includes us as a supplier of legal services. For our part, we’ve committed to halving our carbon emissions by 2030, from a 2019 baseline and we have strong governance in place to ensure we stay on track.

Jakub, who is leading the charge on behalf of the firm, says the key to reaching this science-based target is measurement, and that’s why being part of initiatives such as the CDP is vital.

“We can’t improve what we can’t measure,” says Jakub. “Our role in the Environmental Sustainability team, before we even think of the actual strategy, is to measure and mitigate the firm’s impact on the environment.

“We’re currently collecting carbon emissions data from offices across our global network, from our suppliers and all our activities, to further identify which are contributing the most to our environmental impact. We can then drive focused action to reduce them.”

Turning data into action

Our environmental data shows the most significant part of our carbon footprint – 87% of it – is in our own supply chain: in the goods, services and products we purchase. Our Procurement team is now running a three-stage project, already engaging our most material suppliers to improve their performance.

Another objective is to procure all our electricity from renewable sources by April 2024. Currently, about 80% of our global electricity consumption is supplied from renewable sources, so we’re making good progress.

The other area of focus for Jakub’s team is controlling our own emissions – those that stem from our buildings, our equipment, the waste we produce and our business travel – where individual actions and decision of our people can make the most difference.

In London, we’re moving into a new office during the winter of 2026-27, which is being built with sustainability at its heart. This will also significantly reduce emissions.

Small changes make a big difference

“Reducing our emissions by half isn’t something members of the Environmental Sustainability team can do on their own,” says Jakub. “It will take a firm-wide effort. Don’t lose sight of the fact that any small changes you can make, every seemingly irrelevant decision, will add up across a global network the size of ours.”

Market insights: A&O’s sustainability campaign

A&O has launched a multichannel campaign exploring the net zero transition from a variety of angles. Here are some of the highlights:

Financing the gap explores the dynamics shaping global energy markets and the challenges of transitioning to a low-carbon economy. Featuring the thoughts of partners across A&O, the project identifies a number of ways to accelerate decarbonisation.

Decarbonisation disputes takes a deep-dive into how net zero will drive future litigation. Through a series of Q&As, our partners explore the risks and how to mitigate them.

Better climate finance data enables investors and policymakers to make better decisions. In partnership with the Climate Policy Initiative, we have conducted a landmark study to assess the scale of the financing needed to achieve the energy transition across a range of technologies. You can see the results in our Net Zero Financing Tracker.

We have hosted a number of high-profile events in Europe and the U.S. over the year. In March we welcomed Patricia Espinosa, former executive secretary of the UN Framework Convention on Climate Change, to our London office, and in September we were joined by Avinash Persaud, architect of the Bridgetown Initiative, in New York.

Finally, during the COP28 conference in Dubai between 30 November and 12 December, we took an emerging markets perspective on net zero to reflect the conference’s agenda.

Supporting clients: case studies

A&O’s involvement across the spectrum of energy transition industries has increased exponentially. The team of more than 250 energy transition specialists has advised on projects in over 35 jurisdictions, involving clients from diverse sectors such as power, shipping, aviation, automotive and manufacturing.

The Equator Principles Association

The financial industry uses a benchmark called the Equator Principles (EP) to determine, assess and manage environmental and social risk in project finance and related transactions. The EP Association (EPA), representing EP Financial Institutions (EPFIs), was set up in 2010 to manage, administer and develop the EP.

A multi-jurisdictional team of A&O lawyers, led from London, has worked closely with the EPA Steering Committee and Secretariat to prepare the official loan documentation guidance for the fourth edition of the EP.

A&O has also been assisting the EPA with updating its Governance Rules to ensure they are fit for purpose and can support the development and promotion of the EP. This involves a wholesale restructure of the EPA itself and its rules to prepare the organisation for the next two decades. This will be a critical part of the EPA’s ability to respond to regulatory and market changes as sustainability and the adoption of environmental standards to lending activities becomes more mainstream.

Lead partners

Stephen Mathews, partner, London

Matthew Townsend, partner, London

Summit Carbon Solutions

A&O is advising Summit Carbon Solutions, a vertically integrated carbon capture company, in connection with the structuring and financing of a USD5.3 billion operation, the biggest to date in the world.

The project will consist of carbon capture technology, midstream carbon pipelines and sequestration facilities, and vertically integrating the full carbon capture, usage and storage (CCUS) value chain.

Major incentives driving the deal structure include U.S. federal tax credits for carbon sequestration and clean fuels, California Low Carbon Fuel Standard credits, and voluntary carbon offsets, which combined generate billions of dollars for the project.

A&O is advising on the fund structure, debt and equity raise, project documents, financing documents, overall structure, and accessing a series of federal and state incentives specific to CCUS.

Lead partner

Kent Rowey, partner, Los Angeles

FREYR battery gigafactory

A&O is advising the lenders on the development and financing for the FREYR battery gigafactory project in Norway on the full range of project documents (construction/ project development, revenue, feedstock, process licensing, equity) and finance documents.

The project is being constructed under a multi-contracting construction model; A&O has been advising across all construction, equipment supply and process licensing arrangements and approaches to mitigating interface risks arising under this model compared to a turnkey solution.

A&O has also advised on the multifeedstock/ raw material arrangements and the committed offtake arrangements, including inputting on the offtake strategy for short-term offtake commitments. A&O has also continued to advise on the financing and equity arrangements.

Lead partner

Lorraine Bayliss, partner, London