When Legal Business rounded off our inaugural ESG report last summer, we concluded that the coronavirus pandemic had given law firm leaders the opportunity to crystallise their stance on environmental, social and governance (ESG) imperatives.
For one thing, partners were not jetting around the world, flying in the face (quite literally) of their carbon footprint reduction targets, yet they still managed to be exceptionally successful. Looking back, it was a time when it was easy to be virtuous.
With our report came the caveat that all this corporate righteousness was tenuous. A significant economic downturn and ensuing survival mode could threaten to divert the attentions of the great and the good away from luxuriating in such fluffy ethical matters. But we were emerging from ‘interesting times’ back then, to garble an ancient curse, and doing none too badly. What worse could possibly happen?
Enter Russia, waging war on Ukraine.
International players with an interest in the Russian state or relationships with oligarchs were suddenly faced with a PR problem of epic proportions. It was enough to make firms long for the days when their greatest ethical dilemma was acting either for a tobacco company or an oil major. With any crisis, speed is of the essence and firms with exposure could not afford to hang around lest the finger of blame be pointed squarely in their direction. As our analysis discusses, most moved quickly from ‘considering our position’ (a stock phrase strangely reminiscent of sitting on the fence and panicking at the same time) to cutting their Russia offices loose, handing back control of those businesses to their teams on the ground or, arguably less resolutely, vowing to spurn the advances only of sanctioned clients.
ESG commentators have long bemoaned that the bias of the three-letter acronym has fallen upon the ‘E’ – namely, environmental concerns and a focus on sustainability. The social ‘S’ and the governance ‘G’ parameters had, until recently, been far more ill-defined.
What matters now is how the industry pulls together to effect sound governance and engender humanitarian aid.
Now that the superficial platitudes about doing the right thing amid this humanitarian disaster ring ever more hollow, the next few months will define how this chain of events plays out in practice. It hardly needs saying that the human cost of such a fraught situation will inevitably be immense. The only way it will be possible for many of those firms to prove their mettle will be how they treat those lawyers and staff left in limbo as the war continues to wage around them.
Having evolved over the last decade from switching off the lights, planting trees and recycling coffee cups, much of the industry has now suddenly found itself at ESG crunch time. Face-saving press releases are one thing, but what really matters now is how the industry pulls together to effect sound governance and engender humanitarian aid. There surely can be no better way of holding these firms to account than shining a light on how they deal with the fallout. Our second annual ESG report will be published in the May/June issue of the magazine. It is safe to say it will make for even more compelling reading than its predecessor.