Environmental, social and governance (ESG) has become an indispensable part of the corporate conversation. While it is a key component of long-term value and business resiliency; a strong ESG programme may
help buffer the impacts of the current crisis, hasten recovery, spur innovation and reduce risks to additional crises in the future. And as lawyers become important participants in ESG planning, they are now bolstering their credentials in this regard.
What role can law firms play when it comes to sustainability? And how do you support your clients to meet ESG targets?
LEE WEI LIN, partner and head of the sustainability practice group, Rajah & Tann Singapore
The renewed focus on climate change, social inequality and corporate governance globally means that investors, stakeholders, governments, and business owners are paying more attention to ESG principles being instilled into the life cycle of businesses. A strong legal framework and clear understanding of ESG issues are important to help bring about the transformational change needed to fulfil the sustainability agenda of corporates and community alike. Rajah & Tann recognises that sustainability and ESG issues can be broad, complex, and multi-faceted. Such issues can be country, sector and entity-specific, and can be driven by laws, governmental policies, industry standards and private investment strategies. Rajah & Tann’s dedicated sustainability practice consolidates and streamlines resources and knowledge sharing across practice groups, and works with the practice groups to navigate the myriad of business and legal considerations for sustainability. The types of legal workaround sustainability include advising on issues involving corporate governance, health and safety, sustainability reporting, environment, anti-bribery and corruption, green and sustain-ability-linked loans, supply chain, and stakeholder management. This means that our lawyers, already specialists in each of their existing areas and sectors, can bring to the table, an additional dimension of sustainability and ESG legal advice to our clients.
KATE HODSON, partner and head of ESG, Ogier
Law firms have an important role to play in sustainability and human rights given the extensive number of legal frameworks that exist at the national and international level to maintain rights and standards in these areas. Lawyers also help push the expansion of the interpretation of legal principles serving the purpose of environmental and social protection. With sustainability and ESG infiltrating the financial system, lawyers are finding new ways to contribute to the objective of achieving measurable positive social and environmental impact. By ensuring legal documents reflect relevant environmental and social KPIs and include relevant disclosures, thereby holding issuers, managers and borrowers to account and generally raising greater awareness. Lawyers can help to drive innovation in this area by finding novel ways of structuring mechanisms to provide investors with assurance about the integrity of a project or transaction. This is hugely important in terms of supporting greater flows of capital into sustainable investments. At Ogier, we are committed to supporting the transition of capital flow to social and environmental solutions through the work of our dedicated ESG & Impact Services team and legal team. The firm itself is also embarking on its sustainability journey, having recently hired a head of sustainability to provide the necessary level of expertise and focus to achieve its objectives.
JOHN YEAP, consultant, Pinsent Masons
With ESG obligations being embedded into corporate reporting, companies are increasingly aware of the scrutiny from stakeholders on their performance that extends beyond financial performance. As a law firm, we find ourselves working with clients on delivering their ESG strategies, which will differ depending on the type of their business. A retail company sourcing product from factories across the globe may perhaps be most concerned with ensuring its supply chain complies with its own ESG requirements. An energy company, whilst it will undoubtedly also look to its supply chain, its greatest concern however will likely be the potential impact of its business on the environment. All businesses will also be looking to their governance structures to ensure board transparency on important issues and ability to meet and satisfy regulatory compliance. Our response as a law firm to our clients, therefore, is very much dependent on the needs of those clients. For instance, as a firm that is particularly active in the energy and infrastructure space, we are involved in the delivery of the net-zero strategies of our clients, such as in the development of renewable energy, through to decarbonisation of the transportation sector, and including innovative technological developments such as hydrogen.
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