We were lucky enough to exhibit at the Paris IBA (International Bar Association) this year. As well as loving every second of being in Paris, we also enjoyed what must have been well over 100 conversations about ESG with lawyers from all over the world. Here are some of the trends we noticed regarding law firms and their ESG strategies.
(There were of course many exceptions to these general observations!)
- Firms with larger footprints and higher profiles were much more likely both to have set ESG policies and to be reporting on them, driven at least in part by client demand and/or the ‘war for talent’. Amongst mid-size firms, there was broad agreement that they needed to act, but this was often accompanied by an uncertainty as to how to start and what frameworks or standards to consider. (The UN Global Compact can often be a good place to start.)
- Geography matters. European and UK firms were generally much more aware and much more active in respect of their own ESG journey. In the US, firms are under unique pressure owing to ESG’s politicisation, creating, for some, a reluctance to publicly commit. While many larger firms have set targets relating to the S of ESG (usually equity, diversity and inclusion targets), some in the Middle East highlighted the difficulty in aligning progressive social policies with their more conservative societies. This sometimes put them off engaging with ESG more broadly.
- Some firms that have begun to act on ESG issues have done so without engaging widely with their lawyers, staff and clients. This is both a missed opportunity and perhaps even leaves firms open to ESG risk. Best practice would be to set the strategy and policies after comprehensively researching material risks and opportunities.
- On the Environment side, the focus tended to be on operational net zero, sustainable travel policies and reducing waste. While this is all important and much needed, it shouldn’t be forgotten that a firm’s greatest impacts will almost certainly stem from its client work. A consideration of advised impacts should not be something firms put on the backburner until they have addressed operational impacts – both should be reviewed in tandem and from the outset.
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