ESG

Globally, the market for impact investing, sustainable business and environmental, social and governance (ESG) investing exceeds USD 100 trillion. More than half of institutional investors across the world have integrated responsible investment principles into their investment approaches. In South Africa, there has been marked growth in impact, sustainability and ESG transactions in the past five years, and this trend is expected to gain momentum across the continent.

Legislation and regulation are beginning to change accordingly. Simultaneously, rising shareholder and civil society activism is driving heightened public awareness of the value of responsible investment.

Our multidisciplinary, multijurisdictional teams of specialists advise clients across Sub-Saharan Africa on the legal aspects of impact, sustainability and ESG topics, and have facilitated some of the first transactions of their kind in the region.

In the M&A space, we represent asset managers, fund managers, lenders and borrowers on transactions across asset classes and sectors, advising on every stage of the investment process, from design and formation to measurement and exit. We are also equipped to advise industry bodies, regulators and governments on partnering for impact, which has significant potential to drive sustainable development on the African continent. 

Our lawyers have contributed towards frameworks such as the Principles for Responsible Investment (PRI), UNEP FI and The Generation Foundation’s research on legal frameworks for investing. We work closely with the Grunin Centre for Law and Social Entrepreneurship at New York University School of Law and the Bertha Centre for Social Innovation and Entrepreneurship at the University of Cape Town.

Our clients include banks, impact investors, asset managers, fund managers, industry bodies, regulators and governments.

Our impact, sustainability and ESG service offering includes:

• Bank financing
• Debt capital markets
• Due diligence
• Governance
• Impact investment structuring and fund formation
• Impact measurement and management (IMM)
• Impact M&A
• Organisational form
• Regulatory
• Sector-specific expertise
• Stewardship

We have advised

• Lendable Inc., an impact debt fund based in Nairobi that provides funding to fintech alternative lenders and certain non-fintech entities, on a finance transaction to advance a syndicated secured term loan facility (USD 2 million to USD 10.5 million) to Solar Panda Kenya Ltd.

• Motus Holdings Ltd on the first sustainability-linked syndicated lending loan financing transaction in South Africa. The transaction was led by BNP Paribas and Sumitomo Mitsui Banking Corporation, with BNP Paribas also acting as sustainability co-ordinator on the transaction.

• Old Mutual Alternative Investments (OMAI) on its Schools and Education Investment Impact Fund of South Africa (SEIIFSA), funded by Old Mutual Life Assurance Company of South Africa (OMLACSA), the Government Employees Pension Fund and the Eskom Pension and Provident Fund. The fund aims to create access to affordable independent schools, and finances infrastructure and education-related requirements of schools with the dual objective of delivering quality education and commercially acceptable return.

• Netcare in partnership with The Standard Bank of South Africa Ltd on the listing of Africa’s first sustainability-linked bond on the Johannesburg Stock Exchange. Funds raised through the bond will enable Netcare to fulfil its sustainability objectives of reducing its carbon footprint and improving water efficiency, among other things.

• Royal Bafokeng Resources (Pty) Ltd and Royal Bafokeng Resources Properties (Pty) Ltd (RBRP) on the ZAR 2.1 billion financing by the Unemployment Insurance Fund (represented by its agent, the Public Investment Corporation SOC Ltd) of RBRP’s employee housing project in line with its aspirational creed to engage in ‘More than Mining’. The project is primarily aimed at providing affordable and cost-effective housing for all staff from the company’s Styldrift and Royal Bafokeng Rasimone Platinum mine complex, located in close proximity to the mines, thereby alleviating costly travel expenses for staff. The company has also sought to provide community members with the skills and resources needed to build a better life – a key element of its poverty alleviation and job creation programmes. A critical factor of the scheme ensures that the ownership and value of houses are not negatively impacted by the end-of-life of the associated mine.

• United Nations Green Climate Fund with regard to its ZAR 165 million environmental impact investment into a South African private equity fund (to be managed by the Development Bank of South Africa). The Fund will focus on grants to small-to-medium-sized enterprises implementing renewable energy projects.