Studio Legale Lauro > Naples, Italy > Firm Profile

Studio Legale Lauro > Firm Profile

The firm: 

Initially in the Shipping and Logistics Industry – where this is usual – but along the time also in other industries areas, SLL has developed a special attitude to deal with a variety of cross-border Corporate and M&A deals in a very flexible and informal manner, keeping the agreements wordings and documents brief and as easily manageable as possible, with huge benefits in terms of speed and costs. The M&A transaction sector is in fact full of cases where huge due diligence activities, neverending negotiations on long agreement wording, have produced unnecessary delay and costs and often the deal to vanish due to a change in the circumstances of the intervention of another party or opportunity. Instructing SLL will not lead to this type of results since the firm makes of its understanding of the business goals of the clients, the firm’s main feature!

The firm favour for contractual structures, of simple or complex deals, in this case requiring a high degree of sophistication, has revealed to be important also in a few cases when these deals have necessitated a dispute resolution. In fact, SLL clients had generally the advantage of being assisted by SLL very successfully!

As a boutique firm, SLL is also accustomed to work in association with other firms and legal experts worldwide in a team and cooperation spirit.

Studio Legale Lauro
Address: 80134 Napoli, Via Cardinale Guglielmo Sanfelice, 8
00186 Roma, via dei Coronari, 222
Tel: +39 081 5800199 – +39 081 5800195
Email: info@studiolegalelauro.it
Website: www.studiolegalelauro.it
Twitter: https://twitter.com/studiolauro
Facebook : https://www.facebook.com/studiolauro/
Linkedin : https://www.linkedin.com/company/studio-legale-lauro

Shipping and the law
Instagram: https://www.instagram.com/shippinglauro/
Twitter: https://twitter.com/shippinglauro
Facebook: https://www.facebook.com/shippingandthelaw/
Website: www.shippingandthelaw.org

Lawyer Profiles

Photo	Name	Position	Profile
	Ernesto Ardia	Founding Partner	View Profile
	Francesco Bentivegna	Of Counsel	View Profile
	Arturo Capasso	Of Counsel	View Profile
	Mark Clough	Of Counsel	View Profile
	Roderick Cordara	Of Counsel	View Profile
	Aniello Cuomo	Of Counsel	View Profile
	Giuseppe De Santo	Lawyer	View Profile
	Michele Di Fiore	Of Counsel	View Profile
	Giannicola Forte	Lawyer	View Profile
	Biagio Grasso	Of Counsel	View Profile
	Mans Jacobsson	Of Counsel	View Profile
	Vittorio La Sala	Lawyer / Project Manager	View Profile
	Francesco S. Lauro	Founder & Managing Partner	View Profile
	Giulio Maggiore	Of Counsel	View Profile
	Valentina Tremante	Trainee Lawyer	View Profile
	Nicola Tremante	Of Counsel	View Profile
	Maria Elisabetta Varrone	Chief Marketing Officer and Strategist	View Profile
	Anna Vernillo	Lawyer	View Profile
	Yugui Wang	Of Counsel	View Profile

Focus On

The growing importance of ESG considerations and the new challenges for the M&A industry

Contributed by:

Mr. Bruno Castellini, Professor of Markets and Companies Law at Bergamo State University,  in collaboration with Mr. Francesco S. Lauro, Managing Partners Studio Legale Laur

It is widespread perception in the corporate and M&A environment that the importance of ESG considerations and factors are rapidly becoming matters of primary concern for regulators, investors, customers and employees and, likewise, for corporate boards and executives. As ESG gains in relevance in the eyes of decision makers in corporate organizations, it is at the same time the object of increased and more pervasive regulation.

Recent surveys suggest that ESG positive factors are increasingly associated with business quality and that many corporations are inclined to view a properly structured ESG strategy as an indicator for long-term revenue growth.

Some M&A executives indicate that they already extensively assess environmental, social, and corporate governance elements in the deal-making process they run while a significantly higher proportion of them expect the current degree of focus on ESG aspects to increase. There exists a general view that the ability to demonstrate to corporate stakeholders an appropriate level of understanding and management of ESG matters is likely to generate a competitive advantage in pursuing value creation opportunities.

Such considerations are also impacting positively on the focus of corporate executives regarding the quality and reliability of the ESG data that their companies are able to generate, also looking at new technologies, making communication with respect to ESG a critical element for a successful external relations strategy.

ESG (Environmental, Social, and Governance) considerations have gained, and continue to increasingly gain, significant importance in the recent years and, while they have broadly acquired a high rank position in the agenda of corporate policy makers, they have also introduced new challenges for the M&A industry. Among other considerations, recent studies and reports have highlighted the growing importance of ESG, and the associated challenges for M&A, in several areas including:

1. ESG Integration: companies are increasingly recognizing the need to integrate ESG factors into their business strategies. This includes addressing environmental impacts, social responsibility, and governance practices. As a result, ESG considerations have become crucial in M&A transactions as they can affect a company’s long-term sustainability, reputation, and financial performance.
2. Regulatory Environment: governments and regulatory bodies are implementing stricter ESG-related regulations, compliance with these regulations becomes a critical factor during M&A due diligence, as non-compliance can lead to legal and financial risks.
3. Investor Demand: institutional investors and asset managers are increasingly considering ESG factors when making investment decisions. In the context of M&A, investors may scrutinize target companies’ ESG performance and alignment with their own ESG goals, influencing deal valuations and investment decisions.
4. Reputation and Brand Risk: poor ESG performance or controversies can significantly impact a company’s reputation and brand value. M&A deals can expose acquirers to potential risks associated with the target company’s ESG practices, including environmental liabilities, labor disputes, or governance issues. Assessing and managing these risks is vital to protecting the acquirer’s brand and maintaining stakeholder trust.
5. Due Diligence Challenges: ESG due diligence has become more complex in M&A transactions. Traditional financial due diligence now needs to incorporate a comprehensive assessment of ESG risks and opportunities. This requires gathering and analyzing large volumes of data related to environmental impact, social practices, supply chain management, and governance structures. Acquirers need to have specialized expertise and tools to evaluate ESG factors effectively.
6. Post-Merger Integration: after completing a merger or acquisition, integrating ESG practices across the combined entity becomes critical. Merging companies may have different ESG cultures, policies, and systems, requiring careful planning and execution to align them. Failure to effectively integrate ESG considerations can lead to cultural clashes, employee disengagement, and negative impacts on business performance.
7. Value Creation Opportunities: despite the challenges, ESG considerations also offer opportunities for value creation in M&A deals. Acquirers can identify synergies and operational efficiencies by integrating sustainable practices. For example, incorporating energy-efficient technologies or responsible supply chain management can lead to cost savings and improved performance.

To navigate the growing importance of ESG considerations, the M&A industry must adapt by enhancing expertise in ESG analysis, leveraging data-driven tools, and integrating sustainability into deal strategies. Successful M&A transactions will increasingly require a comprehensive understanding of the target company’s ESG risks and opportunities, as well as effective planning for post-merger integration to realize the full potential of ESG-related value creation.

It is widespread perception in the corporate and M&A environment that the importance of ESG considerations and factors are rapidly becoming matters of primary concern for regulators, investors, customers and employees and, likewise, for corporate boards and executives. As ESG gains in relevance in the eyes of decision makers in corporate organizations, it is at the same time the object of increased and more pervasive regulation.

This trend can be attributed to several factors. First, there is growing awareness and concern about the long-term sustainability and impact of business operations on the environment and society. Climate change, resource scarcity, social inequality, and other ESG-related issues have gained prominence in public discourse, prompting stakeholders to demand more responsible corporate behavior.

Second, investors have recognized that ESG factors can significantly impact a company’s financial performance and risk profile. Incorporating ESG considerations into investment decisions has become a way to manage risks, identify opportunities, and enhance long-term value creation. Consequently, institutional investors and asset managers are increasingly integrating ESG criteria into their investment strategies and engaging with companies on these matters.

Third, regulators and policymakers are responding to public pressure and investor demand by introducing more stringent regulations and reporting requirements related to ESG issues. Governments around the world are setting targets for reducing carbon emissions, promoting sustainable practices, and addressing social issues. Regulatory bodies are also introducing mandatory disclosure requirements, encouraging companies to report on their ESG performance and impact.

As a result, companies are facing a more pervasive regulatory landscape when it comes to ESG. They are expected to assess and manage their environmental and social risks, demonstrate good governance practices, and provide transparent reporting on their ESG performance. Non-compliance with ESG regulations can lead to reputational damage, legal consequences and financial penalties. This context is therefore impacting the responsibility profile of corporate decision makers and their accountability in connection with their ability to manage ESG related matters. Also, the width and peculiarities of the areas impacted by ESG factors require a variety and depth of expertise that need to be reflected in corporate organization and management.

Further, recent surveys suggest that ESG positive factors are increasingly associated with business quality and that many corporations are inclined to view a properly structured ESG strategy as an indicator for long-term revenue growth. Such surveys and studies have indicated a positive correlation between ESG performance and financial performance. These findings have prompted many corporations to view a well-structured ESG strategy as an indicator of long-term revenue growth. Among other aspects, reasons why ESG is increasingly associated with business quality and viewed as a driver of growth include:

1. Enhanced reputation and stakeholder trust: companies that prioritize ESG factors tend to develop stronger relationships with their stakeholders, including customers, employees, investors, and communities. By demonstrating a commitment to sustainable practices, social responsibility, and ethical governance, companies can enhance their reputation and build trust, leading to increased customer loyalty, investor confidence, and employee satisfaction.
2. Risk management: integrating ESG considerations into business strategies can help companies identify and mitigate potential risks. By addressing environmental risks, such as climate change and resource scarcity, and social risks, such as labor practices and community impact, companies can minimize potential disruptions to their operations, supply chains, and brand image. Effective risk management is vital for long-term business stability and growth.
3. Access to capital: investors are increasingly incorporating ESG criteria into their investment decisions. Companies with strong ESG performance are often seen as more attractive investments, and they may have better access to capital, lower borrowing costs, and improved credit ratings. Furthermore, sustainable investment funds and ESG-focused investors are growing in number, indicating a rising demand for companies that align with ESG principles.
4. Innovation and operational efficiency: adopting sustainable practices can drive innovation and operational efficiency. Companies that prioritize ESG factors are often motivated to find innovative solutions that reduce environmental impact, improve energy efficiency, and optimize resource usage. These efforts can lead to cost savings, increased productivity, and a competitive advantage in the market.
5. Regulatory compliance and legal risks: governments and regulatory bodies are increasingly implementing stricter regulations and reporting requirements related to ESG issues. Companies that proactively address ESG factors are better positioned to comply with evolving regulations and reduce legal risks associated with non-compliance. By staying ahead of the regulatory curve, companies can avoid penalties, reputational damage, and potential legal issues.

In summary, the association between ESG positive factors and business quality, as well as the perception of ESG strategies as indicators for long-term revenue growth, stems from the potential benefits of enhanced reputation, risk management, access to capital, innovation, operational efficiency, and regulatory compliance. As sustainability and responsible business practices continue to gain importance, integrating ESG considerations into corporate strategies is becoming a key driver of success in the business world.

Some M&A executives indicate that they already extensively assess environmental, social, and corporate governance elements in the deal-making process they run while a significantly higher proportion of them expect the current degree of focus on ESG aspects to increase. There exists a general view that the ability to demonstrate to corporate stakeholders an appropriate level of understanding and management of ESG matters is likely to generate a competitive advantage in pursuing value creation opportunities.

When evaluating potential mergers, acquisitions, or other deals, considering ESG factors has become more than just a box-ticking exercise. It is seen as a crucial component of due diligence, risk management, and value creation. By integrating ESG considerations, executives can identify risks, uncover new opportunities, and drive operational efficiencies.

Additionally, stakeholders, including investors, customers, employees, and regulators, increasingly prioritize companies that demonstrate a commitment to ESG principles. Incorporating ESG into the deal-making process allows companies to showcase their responsible business practices, strengthen stakeholder relationships, and enhance their reputation. This, in turn, can lead to improved access to capital, increased market share, and enhanced brand value. Overall, the trend towards considering ESG elements in the M&A process is expected to continue and potentially intensify. Companies that proactively address ESG issues and can effectively communicate their commitment to stakeholders are likely to gain a competitive edge in pursuing value creation opportunities.

Besides ESG considerations are impacting on the focus of corporate executives regarding the quality and reliability of the ESG data that their companies are able to generate, also looking at new technologies, making communication with respect to ESG a critical element for a successful external relations strategy.

As stakeholders, including investors, customers, and regulators, demand more transparency and accountability regarding ESG performance, companies are recognizing the need to collect, analyze, and report accurate and comprehensive ESG data. To meet these requirements, companies are adopting new technologies and tools to improve their data collection and reporting processes. This may include implementing advanced data analytics, automation, and digital platforms that facilitate data aggregation and reporting. By leveraging these technologies, companies can enhance the accuracy, timeliness, and consistency of their ESG data.

However, generating reliable ESG data is only part of the equation. Effectively communicating this information is equally critical for a successful external relations strategy. Companies need to articulate their ESG initiatives, progress, and performance in a transparent and compelling manner to engage with stakeholders effectively.

Clear and concise communication about ESG efforts helps build trust and credibility with investors, customers, employees, and the broader public. It enables companies to showcase their commitment to sustainable practices, demonstrate the value they create beyond financial metrics, and align with the expectations and values of their stakeholders.

Moreover, companies that effectively communicate their ESG strategies and performance can differentiate themselves from their peers, attract investment capital, and strengthen their reputation. It becomes an essential component of building positive relationships with stakeholders and maintaining a social license to operate.

To sum up, as ESG considerations increasingly impact corporate decision-making, the focus on generating reliable ESG data and effectively communicating it becomes a critical element of a company’s external relations strategy. By ensuring data quality and employing new technologies, companies can meet the growing demands for transparency. Simultaneously, clear and transparent communication of ESG efforts helps foster trust, build reputation, and gain a competitive advantage in the market.

Interviews

Francesco S. Lauro, Managing Partner

Managing Partner, Francesco S. Lauro explains how the firm is adapting to clients’ changing needs

What do you see as the main points that differentiate Studio Legale Lauro from its competitors?

There is a phrase which expresses the way we act: “Less is more”. In other words, we always tend towards efficiency and precision. Our clients are generally big companies and very busy people who do not have the time to read very long advices full of caveats or long engagement letters. Our aim is to achieve the best interests for our clients, full stop! We are not interested at all in billing a lot of hours and consider that the legal cost of cases should never be disproportioned in respect of the benefits granted by the legal assistance. If we can close a deal or a litigation in a favorable, simple and quick, way we always do it. Our aim is to achieve the best result for our clients and limit their costs, risks and time is of essence.

Which practices do you see growing in the next 12 months? What are the drivers behind that?

I believe that the fall outs of the coronavirus will feature during the next 12 months in many ways. There are and there will be lot of opportunities for new deals and acquisitions for our clients who are generally strong and successful companies but also a lot of litigations, good faith and force majeure cases, bankruptcy proceedings. Also, the necessary state aids and loans to sustain the economy should be granted to the parties who deserve them and should not be a competition distortion.

What’s the main change you’ve made in the firm that will benefit clients?

We are trying to innovate constantly, but if you ask me to indicate just one thing I would mention the recent recruitment Marilisa Varrone as our Chief Marketing Officer and Strategist. Marilisa worked with me after she graduated more than 20 years ago when I was the President of Naples Port Authority and helped me to put together a strategic think tank with young bright professionals and academics that had an important role in a very productive presidency and after other interesting experiences is now back supporting us.

Is technology changing the way you interact with your clients, and the services you can provide them?

Right now, I am answering this interview from my home from where I am connected worldwide through the internet and the most advance conference office. I always considered that a good business lawyer should be h24 available to answer the phone and be able to leave, with a small suitecase, towards any destination in the next hour, however now that this is not possible we can appreciate the benefits of the most updated communication technology.

Can you give us a practical example of how you have helped a client to add value to their business?

First of all, if I am what I am as a lawyer this is mainly due to my clients who taught me what their businesses are and to understand what they need from their lawyer. If you want to be of use to your clients, you must understand exactly what their business interest are, both in the short and the long term. Then obviously you have also to try to establish a good empathy with them, intervene at the right time and always offer practicable, discriminatory solutions. I think we do that SLL.

Are clients looking for stability and strategic direction from their law firms – where do you see the firm in three years’ time?

As I said above, in my opinion clients like that their lawyers understand them, their strategic priorities and interest. They are also interested in the firm being well organised and able to furnish them with the best possible assistance. It is difficult to speak about the future at these challenging times and after the Corona Virus epidemic break out, I would be very happy if the trend which brought us to handle so important and interesting cases and matters could continue and in the meantime we would have succeeded in the large majority of them.