Legal ESG New York : Navigating the Future of Sustainability in Law

Legal ESG New York (November 15th and 16th), characterized by a diverse assembly of thought leaders, served as a dynamic platform to examine and deliberate on the depth and breadth of Environmental, Social, and Governance (ESG) in the legal profession. 

The following offers a summary of the insights into how ESG is reshaping the legal professions, and it shares some “Words of Wisdom" from the faculty.

ESG in the Legal Profession

In a discussion with Gina Passerella (American Lawyer Media),Gabriela Ocampo Ucha (United Nations Global Compact), and Fady Hanalla (Wells Fargo), there was unanimous agreement on embedding ESG into the heart of organizations. The faculty emphasized that ESG transcends traditional business verticals. This evolution in perspective questions the very existence of a so-called 'ESG lawyer,' suggesting a broader, more integrated role for legal professionals in fostering sustainable business strategy and practices.

A striking takeaway from this panel was the reframing of ESG as a lucrative business opportunity, rather than a mere compliance exercise. This shift from a regulatory to a strategic approach underlines the ongoing transformation in how legal professionals perceive and engage with ESG matters.

Cultural Integration and Speaking Out

Natalie Runyon (Thomson Reuters), Miriam Wrobel (FTI Consulting), Michelle Williams (Clifford Chance) and Christine URI (ESG for InHouse) underscored that ESG culture is not distinct from an organization's culture; rather, it should be an intrinsic part of it.

The role of skeptics in this context was highlighted as crucial, serving as a reality check, and ensuring authenticity in ESG initiatives. We need to make material progress on material topics, and the work is done when we simply call it “business” rather than ESG.

On corporations “speaking out” on societal issues, ask yourself “Where is myright to speak on issues? What is relevant to my organization?” Making a statement should be an affirmation of existing values and practices…not something made up in the moment.

Strategic Disclosures and Challenges

Sharing their expertise on this topic were Tim Wilkins (Freshfields Bruckhaus Deringer); Kyle Goehring (Turner & Townsend); and Amma Anaman (Nasdaq).

We examined the complexities surrounding ESG disclosures. The conversation navigated through the intricate landscape of regulatory requirements, the need for adaptable strategies, and the potential competitive disadvantages of disclosure.

Companies might want to write their sustainability plans in pencil rather than ink – as the regulations are emerging and evolving so rapidly. In today’s politically charged environment, even the word “Collaboration” itself has become a politically charged term!

The key is Integration! Integration! Integration! ESG is no longer a marketing function – but has migrated to legal, compliance, finance, people, operations, etc.

AI and Legal Profession: A New Frontier

One of the hottest discussions at Legal ESG New York centered on the intersection of Artificial Intelligence (AI) and the legal profession. 

With AI's growing influence, the panel discussion led by Christine Uri, featuring David Curran (Paul Weiss), Ilona Logvinova (McKinsey & Company), James McPhillips (Clifford Chance), and Mike Stiller (Nasdaq) highlighted the necessity for the legal profession to be forward-thinking, especially regarding governance, ethics, and documentation.

We must reimagine our profession! We need to architect solutions.

Without concrete legal requirements and regulations in place, AI presents a unique opportunity for legal professionals to pioneer best practices in this uncharted territory. We must be thoughtful, forward focused forecasters!

The 'S' in ESG and Its Broad Reach

Leila Hock (Diversity Lab), Deneen Donnley (Consolidated Edison), and Katie Stowe (Norton Rose Fulbright) highlighted that the social aspect of ESG extends far beyond employees, encompassing a wide range of stakeholders, including communities. 

All automation (including AI) has inherent biases -by default,not by design! There are risks of error with AI, and there are risks of error with humans! Consider the delta!

The emphasis was on aligning various areas, such as philanthropy, volunteering, and pro bono work, to amplify the impact of ESG initiatives.

ESG (along with AI) will fundamentally change the fabric of law firms!

Climate Impact and Law Firm Responsibilities

This panel featured a great discussion among Alex Lassiter(Green Places), Vidhya Prabhakaran (Davis Wright Tremaine),and Andrew Shaw (Dentons). The panel acknowledged that law firms have traditionally engaged in aspects of ESG, but there is an increasing client demand for ESG reporting and disclosures, especially regarding environmental impact. 

The age of procurement, with its focus on supplier behaviors and reporting, was noted as a driving force in this evolution. The Power of the Purse! After all, measuring and disclosing Scope 3 includes vendors and suppliers, and that is us, the clients’ law firms.

ESG Practice and Governance in Law

With such panelists as Steve Nickelsburg (Clifford Chance),Amy Hermalik (General Motors), Taylor Hoffman (Swiss Re),and Alison Proshan (McKinsey & Company), this was a lively and engaged discussion.

The conversation emphasized that ESG practice in law has always existed but is evolving rapidly. Law firms are now seeing a shift in their client portfolio, with more clients having specific ESG goals. 

This change drives law firms to inventory and upskill their lawyers' capabilities to meet these new challenges and opportunities.

In the US, the Inflation Reduction Act is driving all sorts of companies to move in this direction. Opportunities are vast! Business imperative for every single industry! 

There has been a change in the mindset of business leaders as follows: “This is a European thing! This is a finance thing! This is a public markets thing! and suddenly, this is my thing!”

Final Thoughts: Responsible Business and the Future

Sharing the findings of their recent research, Lisa Hart-Shepherd and Jo Summers of Lamp House Strategy highlighted the vast business opportunities in ESG for law firms. While 83% of firms are currently marketing their ESG services to clients, the gap between offering advice and implementing robust, responsible business programs within their own firm was striking. 

The discussions foreshadowed a seismic legal shift, requiring law firms to adapt and lead in this ESG-driven era – including within their own firms.

Closing Remarks

Legal ESG New York was not just an event, but a call for the legal profession to embrace, integrate, and lead in the world of ESG, setting a precedent for a more sustainable and equitable future.