Impact Report 2022

Building a Sustainability Law Firm – The First Year

The first year of business was really a test and experiment of the ways we have integrated sustainability in our business model, and from that, reflect on how we can do better. Our Impact Report shares with you some of the lessons we have learnt and our plans for improvement.

*Reporting Scope

We launched Ben McQuhae & Co in 2021 as a law + ESG offering to apply our skills as lawyers to contribute to the global imperative of building a sustainable future. We determined the best way for us to achieve our objectives was to place sustainability at the heart of our business plan and value proposition. To us, this means:

We are guided by the UN Sustainable Development Goals in selecting the work that we do.

We support clients through their sustainability transition.

Our commitment to sustainability is embedded in our own operations.

We are guided by the UN Sustainable Development Goals in selecting the work that we do.

We support clients through their sustainability transition.

Our commitment to sustainability is embedded in our own operations.

Take a look at some of the projects we have advised on in the first year:

Transactions

Renewable energy

ESG regulatory

Green finance & fintech

Carbon markets & Decarbonisation

We advise our clients on the creation, issuance and trading of environmental attributes (e.g. CO2, CH4, HFC, etc.) and other related projects, such as tokenization, trading and distribution platforms, investment products and funds.

Project Highlights:

Structured first offshore trade of high integrity carbon credits from China (CCER)
Designed, structured and executed digital carbon offset products and solutions
Advised on the development of blockchain-based platforms for listing and trading of carbon credits, and the issuance and secondary market trading of digital carbon credit derivatives
Advised on the development of a regional hub for listing, trading and retiring high integrity carbon credits

Take a look at some of the projects we have advised on in the first year:

Green Finance & Fintech

We assist our clients with designing, structuring and executing green (digital) investment products and developing sustainable financing platforms and fintech solutions.

Project Highlights:

Developed green digital asset-backed securities to facilitate fundraising for a climate-aligned asset
Developing a blockchain-based platform for issuance and secondary market trading of impact-driven digital investment products
Developing a blockchain-based platform that aims to offer sustainable finance as a service, focusing on digital green bonds

Carbon markets & Decarbonisation

Structured first offshore trade of high integrity carbon credits from China (CCER)
Designed, structured and executed digital carbon offset products and solutions
Advised on the development of blockchain-based platforms for listing and trading of carbon credits, and the issuance and secondary market trading of digital carbon credit derivatives
Advised on the development of a regional hub for listing, trading and retiring high integrity carbon credits

ESG Regulatory

We assist our clients in navigating emerging ESG regulatory and policy developments, developing appropriate ESG governance structures, policies and controls, and advising on ESG compliance.

Project Highlights:

Assessed a listed company’s ESG governance structure and internal policies and procedures to evaluate whether it enables company directors to properly discharge their ESG-related legal and regulatory obligations
Assisted a listed fund manager in navigating SFC’s new ESG regulation regarding climate-related risks, and advised on its compliance with SFC and HKEX’s regulatory requirements

Renewable energy

We assist our clients on transactional work involving renewable energy investments, project financing and developing green digital asset-backed securities and tokenized carbon-related assets.

Project Highlights:

Designed, structured and executed REC and digital REC products and solutions

Transactions

We provide corporate and commercial legal support to clients who are contributing to the global imperative of building a sustainable future, for instance, M&A, investment, fundraising, general commercial matters, etc.

Such clients include:

A blockchain-based platform for issuance and secondary market trading of digital environmental attributes
A sustainability data platform that aims to drive best practices in sustainable investing
A climate risk SaaS platform that aims to deliver precise predictive analytics at a granular level
A sustainability consulting firm that supports clients on reducing their corporate environmental footprint and carbon management
A sustainable agriculture project
A non-profit organization promoting green finance and investment
A B2B online marketplace for premium to luxury lifestyle products connecting Asian creators and artisans to global buyers

Our Impact Model

As a law firm, the starting point we naturally arrived at for contributing to the UN Sustainable Development Goals (SDGs) was through supporting clients and projects that advance the SDGs.

However, as we test drove our business model during our first year of business, we discovered that we were able to deliver more impact than we initially expected. Besides having an indirect impact through our clients, we can deliver direct impact through helping our clients identify ways in which they can integrate positive ESG/sustainability outcomes into projects that did not previously show positive alignment with the SDGs. This has allowed us as a law firm to deliver additionality through facilitating more positive outcomes.

At the inception of our law firm, we have made a commitment to provide legal support only to projects that bring a positive impact. Here is how we have delivered on this commitment:

Accepted Mandates:*

Positively SDG-aligned Mandates

Accepted Mandates:*

Neutrally or Negatively SDG-aligned Mandates

Rejected Mandates:*

Due to lack of any SDG alignment potential

*Assessed according to our SDG Tracker. We track our impact by number of mandates, and not number of clients that we have supported – we may receive one or more mandates from the same client.

We support clients and projects that:

Develop sustainable products and/or services that are SDG-aligned, or enables other actors in their sustainability transition

Advance their organisation’s own sustainability transition

Develop the infrastructure of a sustainable economy

Channel financing towards SDG objectives

Develop innovative structures, products and/or platforms to expand the means of raising sustainable financing

Develop sustainable products and/or services that are SDG-aligned, or enables other actors in their sustainability transition

Advance their organisation’s own sustainability transition

Develop the infrastructure of a sustainable economy

Channel financing towards SDG objectives

Develop innovative structures, products and/or platforms to expand the means of raising sustainable financing

These are the UN Sustainable Development Goals that the clients and projects we have supported in the past year primarily contribute to:

We have been able to influence our clients to integrate positive outcomes into projects that were initially assessed to be neutrally or negatively aligned with the SDGs, and as a result, deliver additionality:

Client:
Establishing a B2B e-commerce platform for Asia-sourced artisan products

How we helped to integrate more positive ESG/sustainability outcomes into the project:
Client agreed to work together to adopt a framework for sustainable e-commerce operations, addressing environmental impacts and ethical sourcing.

Client:
Client looking to create liquidity for real assets (an LNG carrier) through tokenisation

How we helped to integrate more positive ESG/sustainability outcomes into the project:
Client agreed to consider potential green financing structures, which allows the shipping industry to raise funds to support the much needed decarbonisation of the industry.

Client:
Fintech developer of a blockchain-based alternative asset marketplace

How we helped to integrate more positive ESG/sustainability outcomes into the project:
We worked with the client to develop an impact framework to support the client’s objective to develop the platform as an impact / purpose investing marketplace, enabling the client to assess potential listings for impact performance, and to manage impact performance of the asset throughout its listing.

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One of our sustainability commitments is to only take on mandates that are positively-aligned with the SDGs. We have not deviated from our commitment. Here are the mandates that we turned down:

Potential Client:
Project developer of new crude oil refinery

Why we turned the mandate down:
We declined this potential mandate as we did not want to contribute to carbon lock-in.

Central to our impact governance is our SDG Tracker, which is the tool we developed to help us assess the net impact of potential mandates.

In addition to the client work that we do, we also try to advance the sustainability agenda through actively contributing to various industry initiatives. Here are some of them:

Exploring tokenization of green bonds as an Advisory Panel Member and contributor to “Project Genesis 1.0” spearheaded by the BIS Innovation Hub & Hong Kong Monetary Authority

Helping to advance carbon markets development in Hong Kong as a member of the Hong Kong Financial Services Development Council (FSDC) Working Group on Carbon Market Opportunities

Leading the APFF/SFDN Carbon Markets Workstream to develop policy recommendations on carbon market development for APEC finance ministers

Participating in career sharing sessions to share our experience working in the sustainability field with university students and graduates to encourage more talent to enter into the sustainability field

Helping to facilitate the development of green finance in Hong Kong through the Hong Kong Green Finance Association as Executive Committee member and Co-Head of the External Collaborations Working Group (UN FC4S Workstream)

Exploring mitigation outcome securities (i.e. smart contract-based carbon credits attached to green bonds) as an Advisory Panel Member to “Project Genesis 2.0” spearheaded by the BIS Innovation Hub, Hong Kong Monetary Authority & UN Climate Change Global Innovation Hub

Our carbon footprint

Scope 1

N/A

Tonnes CO2e

EMISSION BREAKDOWN

Activity: Leakage from refrigerants in air-conditioner

We are unable to obtain the necessary data from our property management company.

Scope 2

1.49

Tonnes CO2e

EMISSION BREAKDOWN

Activity: Office electricity consumption
Activity Data: 2099.2 kWh
Emission factor: 0.71 kg CO2e
GHG Emissions (Tonnes CO2e): 1.49 tonnes CO2e

Energy use data extracted from utility bills

Emission factor extracted from HK Electric’s Sustainability Report 2021

Scope 3

0.78

Tonnes CO2e

EMISSION BREAKDOWN

Activity: Paper consumption
Activity Data: 17.46 kg
Emission factor: 4.8 kg CO2e
GHG Emissions (Tonnes CO2e): 0.084 tonnes CO2e

Paper consumption data tracked and recorded by firm

Emission factor taken from the “Guidelines to Account for and Report on Greenhouse Gas Emissions and Removals for Buildings in Hong Kong (2010 Edition)” from Hong Kong Environmental Protection Department and Electrical and Mechanical Services Department

Activity: Employee commuting to/from office
GHG Emissions (Tonnes CO2e): 0.7 tonnes CO2e

Employee commute patterns collected from employee survey

Emissions calculations made using the Hong Kong Environment and Ecology Bureau's “Low Carbon Living Calculator”

Activity: Employee business travel
Activity Data: 0 kg
Emission factor: 0 kg CO2e
GHG Emissions (Tonnes CO2e): 0 tonnes CO2e

Efficiency is at the centre of our approach to business travels. Where meetings are with clients overseas, we have embraced a virtual meeting set-up. Where meetings are with clients in Hong Kong, we schedule meetings so that they are on our way to/from the office to minimize excess travel.

Activity: Outsourced IT support services
GHG Emissions (Tonnes CO2e): 0.71 tonnes CO2e

Estimated based on the spend-based method adopted by the Scope 3 Evaluator developed by GHG Protocol and Quantis.

Activity: Outsourced accounting services
GHG Emissions (Tonnes CO2e): 1.21 tonnes CO2e

Estimated based on the spend-based method adopted by the Scope 3 Evaluator developed by GHG Protocol and Quantis.

Activity: Water sewage

We are unable to obtain the necessary data from our property management company.

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Note: Our calculation standards for GHG emissions follow the GHG Protocol published by the World Resources Institute (WRI) and World Business Council for Sustainable Development (WBCSD).

Our Next Steps on our Decarbonization Journey

We have taken a significant first step in our decarbonization journey in our first year of business by establishing our emissions baseline, which has helped us to reflect on the operational practices we have implemented at the outset of our firm to evaluate whether they were effective in helping us keep our carbon footprint as low as possible, and achieving carbon neutrality.

We recognize that while significant it is still our first step. There is still lots to tackle, and here are some of the improvements we strive to make in the coming year:

We believe that our human capital is our most valuable asset. Diversity and inclusion are therefore more than core values.

Our firm is the collective sum of the individual differences, life experiences, knowledge, creativity, self-expression, unique capabilities and talent of our team members.

We actively seek diversity as we grow. Read more about our DEI philosophy.

Our Sustainability Commitments for 2022-2023

As we reflect on our achievements and lessons from our first year, we have made the following sustainability commitments to improve and enhance our firm’s capability to deliver positive impact:

We are in the process of revamping our SDG Tracker and will roll out a new and improved SDG Tracker 2.0.

We are exploring ways to enhance our impact delivery and additionality through our engagement letters.

We are committed to growing our team and to diversity. We will continue to actively seek out lawyers and ESG professionals who share our values to join us and further expand our skillsets and perspectives.

We will continue to explore how we can expand on our Scope 3 emissions reporting to include clients’ emissions in our carbon footprint calculation, as well as improve the quality of the data we have currently used for our service providers’ emissions.

We are in the process of committing to our net-zero target through SBTi.

We are already a near-paperless office and are working on upgrading our recycling initiatives to make our operations more circular.

This is how we have worked towards delivering positive impact through our work, internal operations and industry initiatives in our first year in business. We look forward to advancing our efforts to deliver more positive impact in the years to come.