1. Convergence of Environmental Practices and Standards inCross-Border Transactions:Why Local Matters Less

2. Multinational Corporations • Multinational corporations are cross-border arbiters of conduct and migrate uniform practices • Lowest common denominator is not a viable option • Reputational concerns and instantaneous flow of information are creating defacto international norms • Inefficiency of multiple practices in multiple jurisdictions supports a rise to the top rather than a race to the bottom

3. Private Equity Market • Consolidates assets and standards • Provides a mixing zone for management practices • Seeks quicker turnaround and exit strategy • Ease of transaction, IPO or acquisition, puts premium on uniformity and absence of surprise • Provides a bridge to international finance markets, further standardizing the approach to environmental diligence

4. Global Financial Markets • Expectations for diligence in securities, mergers and acquisitions and secured financings are increasingly uniform, commoditizing both processes and results • Ease of information assessment and need to avoid impediments to a transaction create a global market for consistent data • It is easier to do more than to explain why you did less or to amend public disclosure, contract schedules or purchase price in the face of a surprise • Contaminated collateral is an international pariah • U.S. and EU contaminated land standards drive assessments worldwide

5. Global Financial Markets Global Debt and Equity Offerings 1991 - > $1 trillion 2002 - $4.26 trillion 2003 - $5.32 trillion 2004 - $5.69 trillion 2005 - $6.5 trillion

6. Environmental Consulting Infrastructure • Consulting firms and due diligence infrastructure are consolidating • Stated business purpose of consolidation is to offer “one stop shopping” in multiple jurisdictions • Net effect is move toward centralized management, practices, evaluation techniques and QA/QC • Educational and training infrastructure reinforces global trends • Experience in command and control jurisdictions or sophisticated regulatory regimes offers currency in the marketplace • This enhances uniform practices and rigor

7. Globalization of Standards • International standards and practices in environmental management reinforce the global playing field • EMAS • ISO 14001 • ASTM E-1527 • Regional compacts have further diminished the importance of national boundaries • Practices in the developed world have cross-whipsawed; EU has led on certain issues, Canada on others, the U.S. on others

8. Corporate Governance • Corporate environmental governance requirements after worldwide ethics scandals increases the demand for systematized and uniform practices and data • SOX “fairly present” certifications put all management through same data gathering process • Environmental line reporting is a worldwide function • Senior management report to the same court of world opinion • All mistakes can be Googled forever

9. Stakeholder Initiatives in the Global Market • Stakeholder initiatives have sped adoption of multinational guidelines • These are not detailed blueprints for doing business, but they establish a global business climate in the public market • Equator Principles • 2003 – 4 original signatory banks • 2005 – 39 signatory banks • 2006 – Rapid spread of internal policies exceeding Equator baseline. Movement started with EU-based banks • CERES Funds • 1999 - $200 Billion • 2005 - $ 5 Trillion • ISS 2006 Proxy Voting Guidelines cover Kyoto, CAFOs, nuclear plants etc. • Other coalitions among NGO groups place long-term capital behind common agendas

10. Wave Tank • Cross-jurisdictional effects have multiplied over the past 10 years • EU trailed U.S. on legacy liabilities but Environment Act and EU Directives have put “polluter pays” on comparable footing for diligence purposes • U.S. trails the world on Kyoto and GHG credits – but emission credit trading and need for certainty for infrastructure capex will ultimately lead U.S. to close the gap

11. Wave Tank • Litigants seek cross-border access to the most favorable jurisdictions (often the U.S.) to address environmental harms anywhere in the world • Most business enterprises know that they will be either buyers or sellers or both • Recognition of value in EMS uniformity at high level, for both ease and appearances • Growing appreciation of environmental management as belle-weather for smart decisions and corporate stewardship • Implementing “world class” standards is both an investment and insurance