Winston’s Environmental Law Update

For close to two years, a task force of due diligence consultants, lenders, attorneys, and other professionals have been working to revise the American Society for Testing and Materials (ASTM) International Phase I Environmental Site Assessment (Phase I) Standard E1527-13 to account for per- and polyfluoroalkyl substances (PFAS). The ASTM Standard is used by purchasers of real property to meet the “all appropriate inquiries” requirement of the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) to establish the innocent landowner, contiguous property owner, or bona fide prospective purchaser defenses to CERCLA liability. These defenses are used to limit the buyer’s liability for historic contamination that pre-dates their ownership. Phase Is are also often used in corporate transactions as a part of environmental due diligence, including in transactions where these CERCLA defenses would not apply.

On October 1, 2020, the fourth version of the Equator Principles (EP4) came into effect. The Equator Principles are global, cross-industry risk management guidelines applicable to project finance advisory services, project-related corporate loans, and bridge loans. 

Environmental consulting firms (EC Firms) are vital to the due diligence practice of environmental lawyers who assist in corporate transactions. Recent trends among these firms, however, suggest potential changes in the lineup of firms that provide these services.