ESG is a big topic of discussion in boardrooms across the legal world, but the stumbling block seems to be how to turn the talk into action that results in an ESG journey (always moving forward). At some point, having a low ESG score will prevent you from doing deals in the future and encumber your talent acquisition and lawyer retention efforts as the ‘nice-to-have’ becomes the must-have. Recent research by RSGI, a legal profession think tank, showed 70 of the 100 largest global law firms are advising clients on environmental, societal and corporate governance issues. Yet only 17 of these firms published ESG reports themselves. And a similarly low number of this leading group of law firms have signed the UN’s Global Compact. This suggests that while law firms have made some impressive headway in terms of reaping the extra fee-earning opportunities the ESG agenda presents, they’re not advancing quite as rapidly with applying the ethical standards themselves.
What’s stopping you?
ESG is a sprawling topic. When you consider the three pillars – environment, social and governance – in the context of a law firm, the impact reaches across many areas of legal work practices. From scrapping manual, red pen mark-ups to reduce printing, to logging onto a video call rather than hopping on a train to a meeting. From rebalancing female representation in the partnership ranks, to tackling the age-old long hours culture that plagues junior lawyers. Changing such engrained working behaviour takes time, effort and financial investment. So, for many law firms, the difficulty is where do you even start?
At an ESG themed webinar hosted by Clarilis on 12th May, we asked two law firms that are celebrated as role models in the RSGI report – Cooley and Burges Salmon – to join our panel and discuss their ESG journey so far. Here we share the insight offered by Emma Bichet, special counsel at Cooley and Kirsty Green-Mann, head of corporate responsibility at Burges Salmon.
Get informed and make yourself accountable
If you’re looking for an easy answer to tackling ESG, there isn’t one. And a lot of this is down to the constant evolution of the issues in question. Yet, there is a ray of light in that you are probably already doing more than you think.
“I think the first thing is to recognise that ESG is a journey – it’s ongoing work and it's never really finished,” Emma Bichet, Special Counsel at Cooley told us, before sharing some of the wisdom she’s gained from Cooley’s ESG journey so far. “I think the first step is about obtaining data and getting a view of how you're doing in terms of the ‘E’, the ‘S’ and the ‘G’. That involves keeping a constant eye on things like diversity and gathering statistics for things like employee satisfaction and environmental performance. The second step, after you have a handle on your data, is to use it to shape your internal policies and your action plan.”
Data, disclosure, and reporting were all common themes throughout our panel’s discussion along with the universal view that you also have to remember to share this information in a public forum. The particular importance of proactively sharing performance statistics and future goals publicly, was emphasised by all our experts.
“It’s important to publish your policies and your action plan so that people within your firm know what the standards are – it also produces some form of external accountability,” Emma explains. “For example, Cooley has a diversity, equity and inclusion action plan stating our goals for greater women’s representation firmwide and in the partnership. This is published externally, and we're held accountable to that.”
Accountability is important in terms of driving internal commitment but being open about ESG creates considerable external reputation value for firms as well. But only if it’s done genuinely. All panel members at the webinar were keen to point out a growing impatience with ‘greenwashing’. As a result, companies overstating their credentials or paying lip service to ESG while practices remain unchanged, are likely to suffer harsh reputational penalties.
“Once you have the policy or the action plan in place, the next thing to do is concretely show how you can then put it into practice,” Emma asserts. “So, you're not just saying that you're going to do all these things and then it doesn't really come to fruition. For example, at Cooley, we have a pro bono commitment and one thing we do that really encourages people to get involved in this is to rank pro bono hours on the same par as the billable hour. It's a small thing, but it encourages both partners and associates to get involved.”
Build ESG strategy from data and benchmarking
Kirsty Green-Mann, Head of Corporate Responsibility at Burges Salmon knows that sustainability and corporate responsibility were embedded in Burges Salmon’s culture way before the ESG acronym was in general circulation. But in recent years, the firm has sharply accelerated and broadened its goals and commitments across all three ESG pillars.
“About four years ago, we decided to take a more strategic approach,” Kirsty recalls. “This involved some internal capacity building within the corporate responsibility team. We also started evaluating what we were doing in terms of ESG, using external benchmarks as a guide to good practice and what our approach should be. We conducted a peer review to see what was going on in the legal sector and we also looked at what our key clients were doing to make sure our approach was going to resonate with them.”
Armed with this data and benchmarks, the team at Burges Salmon was able to identify the key issues that fell under each of the three ESG pillars.
“We used this to pull together what we call a Responsible Business Framework,” Kirsty explains. “We also integrated the UN Sustainable Development Goals and conducted a materiality assessment. Once we’d mapped out the goals for our activities and identified priorities, we validated all of this with a formal round of stakeholder engagement. We also made some changes to the governance arrangements, including putting in place an ESG responsible business committee.”
Again, like Emma, Kirsty emphasises the importance of making these findings and the strategies public commitments.
“Going forward, we've set out 10 targeted ambitions, which are in the public domain, and this is aligned to our overall strategy,” Kirsty adds. “We’re also a signatory to the UN Global Compact and with that, there’s a commitment to produce an annual report and put this information into the public domain, so that you can be held to account.”