NORWAY Law and Practice Contributed by: Elise Johansen, Tonje Hagen Geiran and Lene Marita Berg Hermann, Wikborg Rein Advokatfirma AS
Requests can only be refused on limited grounds, and refusals must be justified. Non-compliance may lead to administrative complaints, appeals, or oversight by the Parliamentary Ombudsman. 16.3 Corporate Disclosure Requirement Companies falling within the scope of EU’s Corporate Sustainability Reporting Directive (CSRD), which is implemented in Norway, must report on sustainability and ESG factors in their annual report. 16.4 Green Finance Green financing agreements are governed mainly through the financial market framework implement- ing EU sustainable finance regulations, as Norway is part of the European Economic Area (EEA). The key instruments include: • EU Taxonomy Regulation; • Sustainable Finance Disclosure Regulation (SFDR); and • requirements under the EU Green Bond Standard. These establish criteria for environmentally sustain- able economic activities and transparency obligations for financial institutions and issuers of green financial products. Supervision and enforcement are carried out by the Financial Supervisory Authority of Norway ( Finanstil- synet ), which oversees compliance by banks, insurers, investment firms and issuers.
A purchaser of shares or assets will often conduct thorough investigations into the target’s environmen- tal compliance, verify the existence of all necessary permits and licences, and examine any history of contamination or breaches of environmental laws and regulations. The due diligence includes: • examining company documents; • reviewing third-party environmental audits; and • assessing any current or potential regulatory enforcement actions. 17.2 Disclosure of Environmental Information Under Norwegian law, sellers in M&A transactions do not have an automatic statutory duty to voluntar- ily disclose environmental information to purchasers. However, failure to disclose or misrepresentation of material environmental facts may give rise to liability for misrepresentation or breach of contract. Compa- nies are subject to environmental disclosure obligations under the Norwegian Accounting Act ( Regnskapsloven ), which has incorporated the EU Corporate Sustainability Reporting Directive (CSRD). Following the same timeline as EU countries, sustainability reporting is being intro- duced gradually according to the CSRD. Starting from the financial year 2024, certain large public entities are required to report. In addition, sector-specific legislation such as the Norwegian Sale of Property Act ( Avhend- ingsloven ) require disclosure if environmental issues could materially affect the property’s value. Sellers may also be legally required to provide environmental docu- mentation to regulatory authorities, which will typically become part of the transaction’s disclosure materials. 17.3 Key Issues in Environmental Due Diligence The most common environmental legal issues encoun- tered in Norwegian transactions include confirming that the target business holds all required environmental permits and licences from public authorities and iden- tifying any ground contamination. Both issues can pose considerable financial risks, as environmental permits and licences are often a prerequisite for the right to operate, and ground contamination may result in liabil- ity for costs related to environmental remediation. In transactions involving publicly listed companies with reporting obligations, there may also be risks related to misleading sustainability and environmental reporting.
17. Transactions 17.1 Environmental Due Diligence
Environmental due diligence is a standard part of M&A, finance and property transactions in Norway. The due diligence typically includes an evaluation of a target company’s environmental risks and liabilities. Typical focus areas include: • past and potential contamination; • regulatory compliance; and • any expected future environmental costs.
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