THE AUTHORS:
Daniela Felippe, Legal Internat Jus Mundi
Bianca Azzi Ferreira, LL.M. Candidate in Transnational Arbitration and Dispute Settlement (TADS) at Sciences Po – Paris
On 8 April 2025, the Câmara Portuguesa and the CIArb Brazil Branch co-hosted the event “2025 France-Brazil Season: Exploring Arbitration, Environmental Social Governance (“ESG”), and Energy Transition” in Paris, France. The event, held at Freshfields‘ offices, was part of the official program of the Paris Arbitration Week (“PAW”).
This gathering offered a unique opportunity to explore the critical intersection of arbitration, ESG, and the energy transition, bringing together key stakeholders to discuss how arbitration can better address the challenges and opportunities arising in these fields.
In her opening remarks, Bianca Longo – Managing Director Brazil at Jus Mundi and one of the event’s organizers – highlighted that the event was part of the celebration of the 2025 France-Brazil Season and that the topic was chosen in light of Brazil’s prominent role in the global energy transition, as one of the countries with the cleanest energy mixes and the upcoming host of COP30, in a year that also marks the 10th anniversary of the Paris Agreement.
As arbitration continues to gain prominence in resolving cross-border disputes related to climate, energy, and ESG matters, those debates are essential to ensure that practitioners are well-equipped to navigate the evolving legal and regulatory landscape.
The first panel, moderated by Cristina Mastrobuono, Independent Arbitrator and Chair of CIArb Brazil Branch, offered a dynamic and insightful discussion on the current state of ESG obligations, focusing on their legal evolution, practical challenges, and growing relevance in dispute resolution.
Daniela Demôro, Independent Arbitrator and ESG Advisor, set the tone for the first panel with a thought-provoking question: “Do you believe in ESG?” She stressed that ESG is not a matter of belief, but a framework rooted in science, ethics, values, finance, and transparency. To illustrate this, she guided the audience through the evolution of Corporate Social Responsibility (“CSR”) and its progression into the current ESG model.
Ms. Demôro concluded by highlighting that ESG-related disputes are not a future concern, but a present one. She outlined key pillars connecting ESG and arbitration in the years ahead, including the rise of climate-related and greenwashing disputes, the inclusion of ESG clauses by arbitral institutions, and the evolving interpretation of ESG obligations in investment treaties. Emphasizing the need for global jurisdictional tools like arbitration, she called on the legal community to play a proactive role, assisting businesses in anticipating risks and resolving disputes early.
Edouard Lemoalle, Partner at Adaltys Avocats, presented the French legal and regulatory framework on ESG and its enforcement before both judicial and administrative authorities. He highlighted key instruments, including the Corporate Sustainability Reporting Directive (EU) 2022/2464 (“CSRD”), the Taxonomy Regulation (EU) 2020/852, and the Sustainable Finance Disclosure Regulation (EU) 2019/2088 (“SFDR”), noting that these frameworks have significantly expanded corporate reporting obligations in France.
Mr. Lemoalle discussed the growing importance of the “duty of vigilance” law, which requires large companies to establish and implement vigilance plans to identify and prevent risks to human rights, the environment, and public health across their operations. He concluded that the current trend is an increase in cases concerning ESG obligations and the “duty of vigilance” in France, especially given the difficulty of defining what should be included in a vigilance plan in companies with complex supply chains.
Bringing fresh perspectives, the second panel, moderated by Riccardo Torre, Partner at Wald Advogados, examined how ESG and energy transition concerns are present in litigation, both in Brazil and abroad, and how they are starting to manifest within commercial arbitration practice.
Paula Linhares Karam, Lawyer at Petrobras, introduced her presentation by referencing the ICC Report on Resolving Climate Change Related Disputes through Arbitration and ADR. She began by questioning what qualifies as a climate change-related dispute and whether such cases could be addressed through arbitration, particularly in the Brazilian context.
She outlined the three categories of disputes identified in the Report:
(i) Those involving transition or mitigation contracts;
(ii) Those arising from general contracts affected by environmental issues; and
(iii) Those submitted to arbitration by agreement.
This framework guided her analysis of 128 climate litigation cases filed in Brazil.
Drawing on data from the JUMA Platform (PUC-Rio), Ms. Karam observed that most cases involved public actors and public interest, raising concerns about the arbitrability of disputes centered on public interest. To explore this, she cited a decision by Brazil’s Superior Court of Justice (“STJ”), noting that the Court’s interpretation of the imprescriptibility of environmental reparation – depending on the legal interest involved (diffuse rights) – could be applied to assess arbitrability, especially under the third category of the Report.
Among the 128 cases analyzed, only one fit into the first category, involving a carbon credit contract. The rest did not align with any category and would not be subject to arbitration under current frameworks. However, Ms. Karam pointed to a trend toward more private environmental disputes, driven by the expansion of the carbon credit market. In such cases, arbitration may be viable when alienable rights and valid dispute resolution agreements are involved.
Camila Biral, Partner at Demarest Advogados, brought a practical and international perspective to the panel by highlighting the rise of ESG-related disputes in M&A, joint ventures, investment deals, and purchase and service agreements. These often stem from environmental violations, greenwashing, or labor and human rights issues.
To illustrate this trend, she referenced two notable post-M&A cases:
- MDW Holdings Ltd v. Norvill & Ors (2021), a UK case in which the buyer claimed misrepresentation of environmental compliance after acquiring GD Environmental Services, resulting in damages based on the difference between the warranted and actual value; and
- Solvay v. Edison, a case involving a breach of environmental warranties following Solvay’s acquisition of industrial sites in Italy, where the tribunal ruled in Solvay’s favor, reinforcing arbitration’s effectiveness in ESG-related disputes.
Turning to Brazil, Ms. Biralm discussed two arbitrations involving Vale S.A. in the aftermath of the Brumadinho dam disaster. One case, brought by 123 investors, alleges ESG disclosure failures. Another, filed by IBRASG, remains confidential but reflects the growing scrutiny over corporate ESG obligations.
She also highlighted a key regulatory shift: in October 2023, Brazil’s Securities and Exchange Commission (“CVM”) issued Resolution 193, adopting international sustainability disclosure standards. Starting in 2026, listed companies, investment funds, and securitization vehicles will be required to report on environmental, social, and governance topics, including greenhouse gas emissions, waste management, and labor practices.
Jose Antonio Garcia, Principal at The Brattle Group, outlined the key features of arbitration that make it a suitable mechanism for resolving climate and energy disputes, while also noting its limitations.
Mr. Garcia highlighted the high degree of customization and procedural flexibility in arbitration, the efficiency and celerity of proceedings, and the ability to appoint arbitrators with specific expertise in technical or sectoral matters. He also noted the benefits of confidentiality and privacy, which are often valued in high-stakes cases. However, he acknowledged a key limitation: the lack of consistency in arbitral decisions, even in cases with similar facts, which can create challenges for predictability and legal certainty.
Yuri Mantilla, Senior Associate at Freshfields, offered a comparative analysis of how France’s environmental and climate obligations intersect with commercial arbitration. He emphasized the growing tension between ambitious ESG regulations and the difficulty of enforcing such obligations through arbitral mechanisms.
Internationally, France’s commitments under the UNFCCC and the Paris Agreement (2015) reflect increasing alignment between environmental protection and human rights. Domestically, the Constitutional Charter for the Environment imposes duties on individuals and institutions, shaping national policy through principles like precaution and public participation.
Among other noteworthy remarks, Mr. Mantilla noted that ESG standards are increasingly influencing arbitration, with parties invoking environmental non-compliance to terminate contracts. He highlighted trends such as post-M&A ESG claims, greenwashing disputes, and construction conflicts tied to environmental obligations.
As ESG considerations gain legal and commercial weight, he concluded, arbitrators will need to navigate new types of claims and defenses, making clear contractual terms and regulatory awareness key to maintaining the effectiveness of arbitration.
In sum, the panels made it clear that while ESG and energy transition issues are still emerging in the field of arbitration, they are gaining ground. Whether through greenwashing claims, post-M&A disputes, or the growing inclusion of ESG clauses in contracts, these topics are beginning to shape how parties approach and structure their disputes. Discussions also highlighted important regulatory shifts in France and Brazil, the complexities of arbitrability in environmental matters, and the need for clear legal frameworks to support effective dispute resolution.
The event offered a thoughtful and timely forum to explore these developments, standing out for its practical focus, high-level speakers, and meaningful exchange among professionals at the forefront of these changes. It was a strong contribution to the PAW and the broader conversation on arbitration’s evolving role in a more sustainable future.
ABOUT THE AUTHORS
Daniela Felippe is a Brazilian and Portuguese-qualified lawyer with over 10 years of experience. She is currently pursuing a Master II in International and European Litigation at Université Paris Nanterre and works as a Legal Intern on the Legal Content team at Jus Mundi.
Bianca Azzi Ferreira is a Brazilian-qualified lawyer and an LL.M. Candidate in Transnational Arbitration and Dispute Settlement (TADS) at Sciences Po – Paris. She works as an administrative tribunal secretary and will join Jus Mundi as an intern in July 2025.
*The views and opinions expressed by authors are theirs and do not necessarily reflect those of their organizations, employers, or Daily Jus, Jus Mundi, or Jus Connect.
