We are seeing more and more about the role of General Counsel and in-house counsel when it comes to environmental, social and governance (ESG) issues.
The Financial Times recently reported on the role the legal department is able to play in shaping and influencing their companies when it comes to branching out into ESG.
At a recent Law Society Conference, there was a powerful call to action by Lawyers for Net Zero, stating that legal teams are uniquely placed to influence their business’s response to the climate crisis.
In terms of longer papers, Ernst and Young have released a study on how legal departments are key to unlocking the sustainability strategies for their organisations.
The pressure is on.
And it’s true that General Counsel are well positioned to help drive ESG initiatives. They have a broad overview of everything that is going on in the business. They are seen as sensible arbiters of fairness and as trusted advisers to the business. They can influence change at the highest levels not only within their own organisations, but also through their law firm panels.
As former General Counsels ourselves at LexSolutions, we talked about some ways General Counsel can play a critical role in driving ESG initiatives forward and become ESG champions.
Educating the business on ESG issues
What are the ESG issues for your company, why do they matter and how can you, as General Counsel help inform and educate stakeholders? General Counsel and legal teams can all play a role in building a shared understanding of the importance of ESG, their relevance to and opportunity for their businesses and creating buy-in across the business for initiatives.
Being the ESG go-to
As companies face increasing scrutiny on their ESG practices, General Counsel can play a role as a go-to for information when it comes to the legal issues related to ESG matters, from helping to design societally impactful policies and initiatives to compliance with regulations and handling investigations and enforcement. It is increasingly becoming the role of General Counsel to help companies navigate the ever-changing landscape of ESG-related laws, regulations and opportunities.
Engaging with investors on ESG issues
This may involve providing input on ESG-related disclosure, responding to investor enquiries, and taking part in investor meetings and calls. We are seeing this increasing with many of the scale-up clients we work with who are going through funding rounds. General Counsel can also help draft shareholder resolutions on ESG topics.
Developing and implementing ESG policies and programs
General Counsel can help develop and implement policies and programs related to ESG. This could be input on corporate sustainability goals, drafting internal policies and procedures, and coordinating with other departments to ensure compliance with ESG-related laws and regulations. They can also help respond to requests for proposal (RFPs) that include ESG criteria and assist with reporting on ESG metrics. In line with this, General Counsel can ensure they ask same of their law firm panel when going out to tender to drive best practice ESG through the supply chain.
Communicating with the Board
Working at the most senior level within a business, General Counsel can keep the Board informed when it comes to ESG and how the company is meeting its ESG goals, providing guidance and suggestions on how to integrate ESG considerations into the company’s strategy.
But – let’s address the elephant in the room.
This is a lot of work for General Counsel, on top of an already challenging and growing remit.
It requires General Counsel to stay up-to-date on ESG developments including new laws and regulations, industry trends and best practices.
It comes with a new pressure to be not only the legal role model, but an ESG role model, setting the tone for the company’s approach and leading by example.
Where to start?
Helping General Counsel with their approach to ESG
At LexSolutions we have been working with General Counsel to help them map out their legal team’s approach to ESG.
We do this via our Legal Discovery Workshops to ensure General Counsels have an ESG roadmap for the future. It’s something the whole legal team can take part in, ensuring ownership and alignment.
We also provide General Counsel with access to our DNA Diagnostic (which we have developed alongside The Maturity Institute) to get a true measure of their panel law firms. Our DNA Diagnostic integrates The Maturity Institute’s OMINDEX® Workforce measures. It unpacks the key causal factors across a law firm’s whole system helping law firms build roadmaps for ESG, D&I and Maturity improvement. By collaborating with their law firm panels on this, General Counsel are supporting them to reveal the data they need to close gaps, elevate their culture and drive meaningful impact. It helps drives commitment to ESG through the entire supply chain.
We have a role to play in in-house legal when it comes to making sure ESG is top of the agenda – our challenge is ensuring the businesses supports us to do this critical aspect to our jobs as General Counsel and senior in-house lawyers. That’s why we have developed two tools at LexSolutions to make it easier for you to start on this journey.
If you would like to find out about a Legal Discovery Workshop to map your legal team’s approach to ESG, get in touch with one of the Lex team.
If you would like to find out about the DNA Diagnostic and how this could work for you and your team and your law firm panel, get in touch with one of the LexSolutions team.
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