Three letters seem to be everywhere you look these days: ESG. Law firm after law firm seems to be offering environmental, social and governance advice and even new practice teams to corporates on a weekly basis. Press releases talk about helping clients ‘navigate the regulatory requirements’ and ‘lead the way’. The fastest land animal is arguably not the cheetah, but instead a lawyer jumping on the ESG bandwagon.
Excuse me for sounding a little jaded. It’s just that we’ve been here before with three little letters: CSR. At first that was all about good intentions, firms demonstrating their commitment to corporate social responsibility. But it soon descended into a cynical PR exercise, with those that did a bit of pro bono, an occasional charity bake-off and remembered to turn their lights off once in a while touting themselves as the epitome of CSR best practice. This was before the global financial crisis came and took many of those good intentions away.
Now we’re back to supposedly enlightened times, where good corporate governance, saving the planet, being inclusive and caring about the mental wellbeing of those who work with us and for us are more important than the culture of greed is good. Corporates are putting their best foot forward. Vodafone has unveiled a new panel this year, selecting eight firms based on a commitment to shared diversity and ESG best practice.
And that is where things need to be different this time around. There is a clear movement towards accountability from individuals and corporates but now they have to prove it. No more virtue signalling. Clients need to hold their legal advisers to account on this and make sure their actions and culture marry with their own. The onus is on them to go beyond the PR of ESG advice.
By the same token, firms themselves need to show a little more backbone if they are to hold themselves out to be pioneers of the ESG movement and this means saying no to clients, especially those that conflict with their own ESG principles. Clients need to be prepared to accept that push back, unless ESG is not a concern to them. The days of firms relying on the argument that they were just following instructions when challenged on questionable behaviour on behalf of their clients, or the tired line that everyone is entitled to independent legal advice, are over.
This why we have launched our first ever ESG report. It is far from definitive, more of a chance to see how firms are doing initially as we increase our coverage of their ESG behaviour. But make no mistake, we want to see results before we praise firms for their grandiose ESG pronouncements. Everyone needs to start somewhere, of course, but the mere statement of aims on the vaguest of timelines will be ignored. Instead we will regularly report on firms that achieve net zero; hit or exceed targets on diversity; promote women and ethnic minorities to senior positions; win panel appointments based significantly on their ESG track records; and turn down instructions from clients whose values do not chime with their own. We’re no longer interested in puffery and good intentions: it’s time to walk the talk.