Dec. 5, 2022
By Fiyin Fayeye
ESG is becoming a more tangible and concrete pathway to crystalising hope for a better and more just future.
Global challenges such as the COVID-19 pandemic, climate change and geopolitical crises, along with growing demands for a more inclusive economy, serve as a continual reminder of the need for responsible action and the critical role organisations need to adopt and more importantly play in creating and paving sustainable practices. ESG factors are increasingly important in weighing the legal implications of corporate behaviour, decision-making and longer-term strategic plans. Investors, employees and regulators continue to put pressure on organisations to make commitments and show progress on social and environmental issues. Scrutiny is rapidly increasing, and what has become abundantly clear is that leaders need to ‘simplify and demystify’ the ESG landscape.
Managing an organisation’s legal considerations now means thinking about environmental, social and governance issues. The legal function is a critical player in meeting, implementing and achieving ESG goals. Consequently, this is where the General Counsel’s leadership remit becomes important. Organisations will continuously encounter both new risks and new opportunities with far-reaching legal impacts creating complex environments to navigate. To remain viable and maintain stakeholder engagement, they will need to keep up with society’s evolving expectations about corporate behaviour and changing operating models. Furthermore, amidst concerns of greenwashing; there is an imperative to streamline and standardise reporting requirements and standards to promote transparent and comparable disclosure.
For many, boosted by the appetite for Legal as a function, to have a more prominent seat at the table; General Counsels are perceived as the natural leaders to converge and align organisational leadership around a shared definition of ESG. ESG is truly amorphous, filtering throughout the consciousness of organisations. Therefore, General Counsels offer the ability to holistically scope the program and context of work to focus on the issues of greatest impact to the organisation. Whilst setting meaningful goals, governing the roll-out and execution of the same to ensure each component meets key milestones. For ESG to succeed it is important for there to exist a well-defined and widely communicated vision relating to the sustainability of an organisation’s business model and revenue streams.
More and more, investors and other stakeholders, expect businesses to pursue sustainability, address risks such as climate change, and commit to diversity, inclusion and equality. At the same time, standards and regulations around ESG are expanding rapidly at the local, national and global levels. Together, these trends are fuelling demand for ESG-focused legal services—and even new legal practices dedicated solely to ESG matters. ESG is an essential part of running an organisation and the question of where this should sit, is continuously debated. The General Counsel’s role encompasses vast elements of this and as such the General Counsel can be an effective spearhead to deliver appropriately. ESG is continually evolving and what is evident is, that it is no longer ‘just a nice to have’.
Our Legal Practice can support you to define your strategic vision and ensure that you have the right individuals in place to navigate the complexities of the future of law and deliver long-term value to the organisation.