Brazil

Brazilian full-service firm Pinheiro Neto Advogados has integrated its ESG services across its practice groups in an inter-disciplinary approach and, as a UN Global Compact signatory, also implements internal best practices concerning conscious consumption and waste management via its Sustainable PNA project, engaging its lawyers in the process. Through a combination of emission reductions and offsetting emissions by promoting restoration of the Atlantic Forest, the firm has been carbon neutral since 2007. The results of these reforestation efforts were noted at the São Paulo Climate Protocol and COP21.

Werner Grau Neto and André Vivan de Souza have wide-ranging experience in advising clients such as Radicle on REDD projects, as well as assisting clients such as the Brazilian Federation of Banks FEBRABAN with issues concerning the implementation of ESG regulation in the financial sector. Ricardo Simões Russo and Tiago A. D. Themudo Lessa possess particular expertise in the field of finance in green agribusiness; Lessa advised Combio Energia on the public offering of CPR-Financeira-backed Agribusiness Receivables Certificates to support the generation of biomass-derived energy, and assisted AGBI Ativos Reais with the structuring of AGBI III CARBON FUNDO DE INVESTIMENTO NAS CADEIAS PRODUTIVAS AGROINDUSTRIAIS, an investment fund with the main purpose of investing in rural lands and generating carbon credits.

The firm also provides pro bono legal advice to Casa Rio on a range of issues including environmental conservation, and similarly advises Blue Keepers across its work combating plastic pollution in rivers.

Has your firm established a dedicated ESG/climate change/sustainability practice, team or task force? 

We have a highly qualified multidisciplinary team to advise and support clients of all industries to keep up with ESG growing trends around the world. Combining the structure of a full-service law firm with the expertise of our ESG attorneys, we provide legal strategies drawing on a wide and integrated approach with the goal of enhancing our client businesses.  

In the field of social responsibility, we use the same ESG expertise to support projects related to ESG/climate change/sustainability, sharing such experience with social responsibility projects. 

What type of work do you handle in connection with “green change”?

(E) Environmental aspects 

Environmental principles, standards or factors are gauged by a company’s ability to contribute toward a sustainable development. They embrace a variety of environmental actions including, among others, reduction in carbon emissions, control of atmospheric emissions, use and management of natural resources and assets, management of waste and effluents, energy policies, and effective adoption of the best environmental practices. 

We offer advisory and litigation services drawing on the in-depth and extensive experience of our lawyers with unrivalled expertise in the most complex environmental matters, including advisory in carbon and sustainable credits, such as projects associated to reforestation, carbon offset, carbon capture and storage, green areas tokenization, projects associated to payment of environmental services, green bonds and potential impacts of ESG polices on M&A and capital market transactions. We represent clients in green financing and issuances, socioenvironmental banking policy matters, environmental due diligence, while assisting clients in their decision-making processes and fostering sustainability in their business, in strict compliance with applicable laws.  

Historically, we have contributed to the issuance of sustainable rules and policies. We are watching closely national and international trends and their business impacts, which enables us to continuously offer innovative and contemporary solutions to our clients.  

(S) Social Aspects 

ESG social criteria includes a company’s ability to comply with labour, occupational health and safety laws, principles and guidelines on human rights, employee relationship development, training and engagement, while keeping and putting in place diversity and inclusion, privacy and data protection policies. The criteria also consider an ethical and transparent relationship with consumers. 

The control and monitoring of social practices in the marketplace and their effectiveness have changed significantly in recent years, gaining momentum and guiding the future of business relations. New rules and disputes, alongside alternative dispute resolution mechanisms involving human rights, have emerged and became even more frequent. In this sense, there has been a growing demand for corporate transparency and privacy, aligned with recent regulations on these matters.  

Our lawyers offer a breadth of expertise in advisory and litigation work and due diligence involving social issues. We advise our clients on a wide array of projects and demands assisting them implement their social policies, including for their production chain in line with ESG standards.   

(G) Governance aspects 

A company’s level of governance is defined by the structure and effectiveness of its reporting procedures, ethics and transparency, mechanisms facilitating stockholder voting rights, especially those of minority stockholders, board independence and diversity and, along with a variety of other practices and policies, tax oversight, rules of conduct, and implementation of audits to track its actions. 

Our team of specialists provides services related to the implementation and monitoring of corporate governance structures of both publicly held companies and closely-held companies. We advise clients on compliance with a broad range of governance rules imposed by competent regulatory and self-regulatory agencies in diverse industries. This includes making appropriate market disclosures, implementing internal policies and rules, managing conflicts of interest, and screening related-party transactions, management composition and remuneration method, and protection of stockholder rights.  

We conduct strategic pre- and post-investment assessments, including, among others, mapping of ESG practices and potential risks (negative screening, positive screening, best-in-class, impact investment, integration, etc.), due diligence, assessment of environmental and regulatory risks, inclusion and negotiation of representations and warranties in contracts, mitigation of specific risks, considering the specifics of each industry, standardization of investee practices and reports, KPIs, design and tracking of risk incident notification and neutralization policies, all under an ESG perspective. 

Our lawyers have a strong breadth and depth of experience in implementing and tracking compliance programs, as well as in conducting internal investigations into potential irregularities.  

Has your firm implemented any internal best practices?

Since its inception, Pinheiro Neto Advogados has endeavoured to return to society what the firm has received from it. As a market leader and a reference to many other Brazilian and international law firms, the firm has the professional responsibility to lead a sustainable corporate environment.  

The firm has strong governance and social policies, it is committed to learning new methodologies, identifying internal concerns, tackling internal issues, and offering a more welcoming environment. 

As an example, the firm is a signatory to the UN Free & Equal campaign launched by the Office of the United Nations High Commissioner for Human Rights (OHCHR), an unprecedented global UN public information campaign aimed at promoting equal rights and fair treatment of LGBTQIAP+ people. By embracing different expressions of gender, sexuality and affectivity, the prejudice barrier can be overcome and society can promote a greater exchange of experiences and joint growth. We are also signatories to the Letter of Support to Diversity, Respect and Inclusion of LGBTQIAP+ people in the Workplace in Brazil. 

Pinheiro Neto is made of people. Built on a strong culture and values, we develop long-term relationships with our members and, with a low turnover, they stay with us for decades throughout their entire careers.  We believe in people, invest in people and support people. We view people as every single human being in all their beautiful uniqueness. That is why it is our job to create a welcoming environment with opportunities to everyone. 

As per the main issue of the guide – green initiatives, Pinheiro Neto has established environmental sustainability as one of its key goals. As part of these efforts, one of the firm’s main accomplishments was the Carbon Free achievement. Pinheiro Neto is the first Brazilian law firm to offset its entire carbon footprint, achieving NetZero status in 2007. It became an internal perennial ESG strategy action, consisting of the management and continuous improvement of greenhouse gas emissions generated by the firm’s activities, as well as the compensation of annual emissions through restoration of native forests in degraded areas of the Atlantic Forest Biome, in a process of economic, social and environmental valorisation of small rural producers by Associação de Preservação do Meio Ambiente e da Vida (Apremavi), a non-profit organisation incorporated as a civil society of public interest (OSCIP). 

Our investment resulted in the forest restoration of more than 80 hectares through planting, maintenance and monitoring of more than 127,000 native trees. Through the longevity and coherence of this initiative, it was possible to build the main research and environmental education centre in native forests of the Atlantic Forest in the south of the country, a global reference, which was only accomplished due to their own economic savings from the compensation projects that were directed to bettering the organisation’s research and development centre. It received recognition from the São Paulo Climate Protocol at the 2015 United Nations Climate Change Conference (COP21) in Paris. 

Recently, the firm has reached the unprecedented mark of 15 years of offsetting its carbon footprint, which has led to approximately 25,525 tCO2 of carbon offset. 

Regarding legal advancements, Pinheiro Neto’s team has been over the years involved in a number of innovative and challenging green and/or sustainable transactions, being currently considered as one of the leading firms in net-zero transition matters.  

Has your firm joined any external ESG-related projects, networks or initiatives?

Since 2010, we have been associated with GIFE – Grupo de Institutos, Fundações e Empresas, a network of more than 160 members who, together, contributed BRL 5.3 billion in social investment in 2020. GIFE is the main association for social investors in Brazil and aims to diversify and expand the field of social investments in Brazil, and to contribute to the full exercise of citizenship and the promotion of social development in the country. 

We are also part of the Positive Governance Agenda of the Brazilian Institute of Corporate Governance (IBGC). The purpose of the project is to contribute to the construction of a better society, through the dissemination of principles and good practices of corporate governance and to suggest measures to be taken by leaders. 

The most recent initiative is the participation, as a pro bono supporter and sponsor, of the “Novo Rio Pinheiros Project”, conceived by the Government of the State of São Paulo. Through this project, our firm provides all the legal support necessary for all social responsibility initiatives linked to the depollution of the “Rio Pinheiros”, one of the two main important rivers in the city of São Paulo, in line with what has been done with rivers in different parts of the world, such as Paris and London.  

What are your firm’s ESG-related goals?

In 2021, we joined the The United Nations Global Compact. As signatories, we reaffirm our management practices associated with the Ten Principles universally accepted in the areas of Human Rights, Labour, Environment and Anti-Corruption, as well as the Sustainable Development Goals (SDGs). We believe that this is a way of institutionalizing practices already valued by the firm and which, from now on, are also part of our strategy, culture and operations. 

More than being a member and actively participating in associations, we seek partners (NGOs) in the most diverse places in Brazil to share our knowledge about ESG and, in return, learn about the needs of each of these places. 

Is your firm involved in any relevant pro bono work?

Pinheiro Neto partners with ECOPATAS, an animal rights organisation which collects and sells plastic lids and aluminium seals from bottles and cans to fund gratuitous castration of abandoned animals. During the last year, ECOPATAS correctly disposed of around 90 tons of caps and seals, which converted into more than 2,500 castrations of animals. The firm contributed with 360kg of disposable materials to ECOPATAS, even though the firm was still largely on a working from home basis.  

Another initiative that is worth mentioning is our pro bono assistance to Instituto Onça Pintada – IOP, a non-profit organisation incorporated as a civil society of public interest (OSCIP), which dates back to 2016 when we were engaged to assist it in becoming a certifying body for farms, cattle ranches, mining and agricultural properties that adopt sustainable practices, notably as regards the conservation of Brazilian apex predator, such as the jaguar (Panthera onca), as well as of all its prey, that is, individuals of various species that are included in its dietary needs. The certification is a voluntary process, which may be pursued by individuals or legal entities that are willing to contribute to a more effective and successful conservation of the Brazilian jaguar as well as of the biomes where individuals of said species have historically occurred. The innovative process of certification of farms is led by highly-renowned conservation biologists, and encompasses a series of inspections and technical analyses that precede the certification of a rural property which adopts sustainable practices towards wildlife conservation. Our multidisciplinary team worked on the drafting of contracts to be entered into by any interested parties that own/occupy rural areas where the jaguar still exists. These contractual instruments contain a series of annexes with legal and biological content, thus specifying the do’s and don’ts of the relevant players. We also procured the registration of the trademarks of Instituto Onça Pintada – IOP, including the certification seal to be granted to the certified properties. Currently, the certification programme covers more than 350,000 hectares of productive area in the central and northern regions of Brazil. Further, we are assisting them in the negotiation of a potential partnership to publish a children’s book collection illustrating the lives of individual animals that are under the care and protection of the IOP, spreading the word as to the importance of wildlife conservation to younger generations. 

Further, Pinheiro Neto advised Regenerative Agriculture Investor’s Network – RAIN, on a pro bono basis, an organisation designed to increase education, community, and sharing of opportunities within the regenerative agriculture and food space, on establishing the NGO’s Brazilian branch. The organisation’s main goal is to increase shared literacy, understanding of deal flow, and investment opportunities in the regenerative agriculture space and promote networking opportunities among people all over the world. RAIN’s coordinating partners are LIFT Economy, a consulting firm for social and environmental initiatives and Provenance Capital Group, a financial services firm focused on regenerative natural resources, both based in the San Francisco area. Its worldwide community is already comprised of over 200 like-minded investors and philanthropic leaders across the globe. 

Pinheiro Neto’s multidisciplinary team provided pro bono legal advice to Casa Rio, a non-profit institution that since 2014 has been operating in the BR 319 region, in the State of Amazonas, with initiatives that contribute to human and territorial development through education support, entrepreneurship guidance, and agroecology projects. Its initiatives also include the promotion of youth protagonism, development of capabilities, formation of collective and productive groups, gender equality, value chains, guarantee of rights, leadership programmes, and conservation of biodiversity. We advise Casa Rio on the review of contracts, statutory review, and trademark registration. One permanent concern in our pro bono programme is the possibility of empowering civil organisations that work to preserve the Amazon Biome and support the leading role of native people. Therefore, we are very proud to be one of Casa Rio’s supporters and help them continue to promote sustainability of our ecosystems and conservation of the environment. 

We advised TNC – The Nature Conservancy, on a pro bono basis, in the transfer of the Agroideal platform to Embrapa – Brazilian Agricultural Research Corporation. TNC is a global environmental non-profit organisation dedicated to creating a world where people and nature can thrive. It is the largest environmental NGO in the Americas. They developed the Agroideal platform, a free online territorial intelligence system to territorially assess socio-environmental risks and support decision-making on investments in the soy and livestock sectors. The platform brings numerous maps, which provide a good view of the agronomic, social and environmental situation in the Cerrado and Amazon Biomes, along with the latest risk indicators defined by groups of specialists in a single database. Based on the investor’s business plan, the user is able to select a region, a relevant spatial scare for analysis, the most relevant economic opportunity and socio-environmental risk indicators, tolerance thresholds and impacts of each of these factors in order to generate a risk exposure map for that region of interest. The challenge was to cross this database in order to create unprecedented indicators that would generate territorial intelligence for the sector. Agroideal will help companies meet this demand with the least environmental and social impacts. The project was a huge success, and has matured in such a way that TNC planned an exit strategy to allow the platform to move forward under the guidance of Empresa Brasileira de Pesquisa Agropecuária – EMBRAPA, a public research company linked to the Brazilian Ministry of Agriculture, Livestock and Supply, which will add value to public information produced by it. Our pro bono assistance included carrying out the transfer of the platform to Embrapa, which involved our intellectual property team in the preparation of a license agreement for Agroideal brands and filings with INPI, as well as construction of the domain transfer agreement.  

Additionally, as a pro bono work, Pinheiro Neto advised Rede Brasil, part of the UN Global Compact in the Blue Keepers project. The Global Compact is an initiative of the United Nations that aims to mobilize the corporate community to promote, in their business practices, fundamental and international values in the areas of human rights, labour relations, environment and anti-corruption, including extortion and bribery. Rede Brasil answers to the headquarters of the Global Compact, in New York, and chairs the Council of Local Networks in Latin America. It is currently the third largest network in the world, with over 1,100 members. Since 2020, we have attended to its most diverse legal demands, providing them with legal advice and endorsing their initiatives. The Blue Keepers project is an initiative developed to combat plastic pollution in rivers and oceans, promoting small local actions aiming at national impact. The project supports municipalities combatting pollution caused by plastic. Our work consisted of reviewing contracts with potential sponsors, developing the project’s governance system and promoting local actions together with the municipalities.  

Altogether, Pinheiro Neto is happy to have accomplished relevant goals regarding its own operations, and to advocate the promotion of sustainable practices in the Brazilian market.  

Have there been any recent non-confidential stand-out matters that were particularly innovative, pioneering or complex?

Regarding legal advancements, Pinheiro Neto’s team has been over the years involved in a number of innovative and challenging green and/or sustainable transactions, being currently considered as one of the leading firms in net-zero transition matters. Over the past recent years, Pinheiro Neto advised underwriters in the first green bonds offering by a local state-owned bank (BNDES USD 1 billion green bonds offering), whose proceeds were used for renewable energy projects financed by the bank. Our team was also involved in the largest green offering in the local capital markets implemented by Neoenergia (green project debentures in the amount of BRL 2.89 billion). Recently, we also advised a large water and sewage corporation (Igua Saneamento), in the first offering in the local capital markets of newly created “sustainable” debt securities in the amount of BRL 620million. In a leading case for railway sector in Brazil, the firm also advised underwriters in the first-ever offering in the infrastructure sector of green bonds, implemented by Rumo in the amount of USD 500 million.  

In 2021, we were involved in a new trend of offerings involving net-zero transition matters, in which entities of different sectors started to issue debt securities with commitments to comply with sustainable requirements – an example was the offering of sustainable debt securities issued by one of the largest retail corporations in Brazil (ViaVarejo) concluded last May, in the amount of BRL 1 billion. 

From 2020 on, we have also been involved in new green projects complying a new look at the carbon credits market and credits arising from payment of environmental services, as carbon capture and storage projects, relevant reforestation projects in Amazon, Cerrado and Mata Atlântica Biome, verification and validation of credits arising from such projects, tokenization of areas and green bonds linked to sustainable credits.  

We have also been assisting Brazilian companies in projects arising from the European Green Deal actions, mainly associated to the carbon offset and prohibition of deforestation for exportation purposes. 

In additional, we have been assisting companies to develop and implement their own ESG polices, carrying out legal due diligences to confirm adherence of companies to ESG guidelines and international trends.  

Historically, we have always contributed to the issuance of sustainable rules and policies, and we continue to watch closely national and international trends and their business impacts, which enables us to continuously offer innovative and contemporary solutions to our clients.  

When did ESG, climate change and/or sustainability become an area of focus at your firm?

The environmental practice of Pinheiro Neto Advogados has more than 35 years, it was a pioneer in the national market and in the national market of full services firms. We assisted clients in the first public civil action filed in the country since its beginning and, from then on, in several demands of national relevance and naturally complex. 

The firm’s first sustainability cases emerged in the 1990s and in the over 2000s, there were large cases of climate change, which recently increased, mainly after the Paris Agreement. 

The firm has been working since its inception in environmental, human rights, social and governance demands with specialised attorneys who work as a team developing legal strategies to support our client’s business.    

Where do you see the future of ESG/sustainability in the legal community (both in terms of legal offerings and firms’ best practices)?

We expect works to expand in the “ESG area” due to the clients constantly increasing demand and our interest in creating and disseminating knowledge. 

The demand for qualified work and for institutional principles and guidelines seems to be irreversibly growing. The matter is not restricted to the environmental level, and in a country like Brazil, addressing social issues, notably those linked to human rights and adequacy of corporate and office governance to a comprehensive view, is a point that will certainly be at the top of the guidelines in the following years. 

Topics such as infrastructure optimization, protection, conservation, restoration of forests, carbon offset, capture and storage, combined with efficiency gains in agribusiness and industrial activities, and attention to working conditions, diversity and dignity of workers will certainly be items of special attention, demanding that the firms adapt their structures so that they meet and practice the values inherent to these themes. 

Following our tradition of avant-garde and leadership, our role is to optimize the standards adopted in our activities, so that we may be an example of ethical commitment and positive achievements.