Why are Environmental, Social and Governance (ESG) initiatives important for law firms?
By Toby Sewell from Access Legal
Environmental, Social and Governance (ESG) projects are a key for most businesses in all industries and the legal sector is no different, especially in the last decade. These initiatives allow law firms to understand and reduce their impact on the environment and promote a better way working. ESG is strongly related to sustainability and provides a framework for law firms to account for their environmental, social, and governance policies so that they don’t negatively affect the world.
ESG criteria are now taken into consideration for many law firms services and activities, including how they interact with clients. There’s some obvious ways law firms can make their operations greener and leaner such as utilising technology to reduce the amount of printed documents or moving to cloud hosted software which is much more energy efficient, however ESG means much more than that. ESG also helps motivate conscious decisions regarding energy usage, environmental footprint reductions, human rights considerations, ethical standards adherences, regulatory compliance and more. ESG gives law firms an incentive to consider the full effects of their actions on society as a whole.
Law firms also look at their suppliers and partners more closely to ensure that they also have ESG policies and initiatives in place which aligns to the values and views of their own. This means law firms can be confident that their supply chain, as well as themselves, are operating in the most sustainable and morally correct way. Firms that embrace ESG principles are also better able to build trust with clients by demonstrating ESG awareness and incorporating ESG considerations into the scope of their legal services. Awareness of ESG issues can help law firms identify opportunities for new business and areas where clients may need additional legal assistance or advice.
What could law firms do to support ESG initiatives?
There’s a number of things which law firms can do to support ESG initiatives. Below are just a few:
- Work towards being a Certified B Corporation – B Corp Certification is a designation that a business is meeting high standards of verified performance, accountability, and transparency on factors from employee benefits and charitable giving to supply chain practices and input materials.[1] There’s already some UK Law Firms who have become certified.
- Use technology to digitize processes – client portals, cloud hosted software, digital dictation, and workflow automation are just a few examples of functionality law firms can use to streamline processes, reduce paper and postage and decrease energy consumption.
- Legal compliance and learning – a cloud-based risk and compliance platform helps legal businesses record, track and manage their regulatory and quality standard obligations. The system is used by legal businesses to help them comply with the SRA Standards and Regulations, Lexcel and CQS.
- Charitable events and initiatives – sponsor and get involved with local charitable causes. Not only is this the right thing to do but it helps to build relationships with the local community.
- Identify your ESG risks and opportunities and set goals – auditing where your law firm can positively or negatively impact ESG and setting objectives around these will give your firm clear actions and KPIs to track.