Managing ESG risks is becoming a hornet’s nest for legal departments, a sometimes overwhelming task that is forcing general counsel to decide where to devote their manpower.

As the range of environmental, social and governance risks expand, 99% of the 1,000 general counsel and chief legal officers surveyed in a new study by EY Law and Harvard University expect a sharp increase in the volume of work.

Legal chiefs are fretting on many fronts, fearing ESG issues will cause a loss of customers due to reputational damage, lawsuits by third parties and an increase in regulatory enforcement actions.

“This landscape is complicated by often ambiguous guidance from regulators, stakeholder pressure and competing goals within the business itself,” the study notes.

Paradoxically, all the new responsibilities are likely to increase the importance of company legal chiefs, as CEOs and other business unit leaders turn to them for guidance on the range of ESG issues.

Continued