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Excluding modern slavery from the supply chain

Matheson is advising clients to identify and, where necessary, prevent, end or mitigate any adverse impacts of their activities on human rights and on the environment

Garret Farrelly is Matheson partner and head of its energy and natural resources group, projects and infrastructure group, as well as the head of the Matheson ESG Advisory Group. As such he is well placed to both advise and comment on the achievements in sustainability in his client base.

“We have enhanced our ESG offering by bringing it into one combined advisory platform, with the result that Matheson’s ESG Group provides an integrated approach to supporting our clients in responding to legislative and regulatory change; delivering on their own ESG goals; and meeting the challenges and opportunities in doing so,” says Farrelly.

Matheson’s renewable energy practice also advises in relation to many of the key mandates which underpin renewable energy development in Ireland, including project development, project financing and M&A. Indeed, Matheson has advised on more corporate PPAs (Power Purchase Agreements) executed in the Irish market than any other Irish law firm.

“Through our ESG Advisory Group, we provide the integrated approach required to support our clients in responding to legislative and regulatory change, delivering on their own ESG goals and identifying the challenges and opportunities in doing so,” he says.

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Matheson is increasingly advising its clients on their supply chain management with respect to sustainability.

“For example, we recently advised a global technology company on bespoke (and first of their kind for the Irish market) supply chain management provisions for their purchasing contracts which seek to ensure that modern slavery is excluded from their supply chain. Supply chain management will be further regulated once the Corporate Sustainability and Due Diligence Directive is implemented,” says Farrelly.

Another issue that members of Matheson’s ESG Advisory Group focus on is supply chain management from an ESG perspective.

The European Commission published a proposal for a directive on corporate sustainability due diligence in February 2022.

Once implemented, companies will be required to identify and, where necessary, prevent, end or mitigate any adverse impacts of their activities on human rights and on the environment.

One way to achieve one of the requirements of this proposed directive around, for example, modern slavery would be for a company to include provisions, such as Ayshe’s Clause, in their contracts with their supply chain and established business relationships.

Matheson has worked on this clause with The Chancery Lane Project through its pro bono initiative. This provision will oblige stakeholders in renewable energy technology supply chains to lower their carbon emissions, minimise their environmental impact and safeguard against modern slavery.

“Another area where companies can make a very big impact on their environmental sustainability goals (and reduce their emissions significantly) is through a renewable energy procurement programme.

“In this regard, we have seen a huge increase in the Irish market in the procurement of CPPA (Corporate Power Purchase Agreements). Under a CPPA, energy-intensive private businesses undertake to purchase electricity from a renewable source (such as from a wind or solar farm) at a fixed price for an agreed term.

“This provides a hedge for companies as to their electricity costs for that term, while also incentivising the build-out of new renewable energy generation. As at the end of August 2022, there were approximately 500MW of contracted CPPAs in Ireland,” he says.

Internal ESG goals in Matheson have achieved recycling rates of 97 per cent over the past three years, reducing the amount of printing by 4 million pages per annum or 20 tonnes of waste or 16.02 tonnes of CO2 emissions and removing plastics spoons resulting in savings of 900kg of waste going to a landfill.

Jillian Godsil

Jillian Godsil is a contributor to The Irish Times