Law firms lack resources to meet corporate demand for ESG services, study finds
Some 55% of law firms said they need to enhance their ESG capabilities, according to Landmark Information survey
More than half of law firms say they need to ramp up their environmental, social and governance (ESG) services to help companies achieve their ESG goals, according to a study by Landmark Information.
Some 55% of law firm respondents said they need to enhance their ESG capabilities and resources, with only about a third (36%) of firms saying they are able to meet the increased demand for ESG-related advice, the survey data showed. A majority of law firms and corporates also agree that ESG is more important today than it was 12 months ago, with 42% of corporates saying that has been driven by shareholders and investors demanding companies take more action on climate change and sustainability.
Against that backdrop, companies say they need greater measurement-focused support, with 86% of UK and 77% of US corporate respondents suggesting that law firms could be offering more guidance on ESG metrics and scoring methodologies. About nine in 10 law firms say they have seen increased demand from corporate clients in this area, though almost a fifth of corporate respondents say they are not receiving any guidance on ESG metrics despite their need for that support.
Legal and conveyancing products and services company Landmark interviewed more than 400 individuals comprising executives and directors from corporations and partners and fee earners UK and US law firms.
Simon Boyle, legal director at Landmark, said: “There is no surprise that ESG measurement is considered a complex area, yet it is rapidly increasing in importance as investors, stakeholders, lawyers, employees, suppliers and even end customers are demanding information relating to organisations’ achievements and actions under ESG.”
When it comes to measuring ESG, law firms believe corporates struggle most with finding the time to carry out the task (62%), followed by its overall complexity (53%).
Despite the increased global focus on climate change, on average law firms said their biggest ESG focus is the social aspects – such as diversity and inclusion policies and wellbeing – with 36% of UK and 38% of US respondents ranking it as their top priority.
Environment, however, was more of a priority for UK law firms, with 28% saying it is their main priority compared to just 8% of US respondents. Meantime, almost a quarter of US respondents (24%) said that all aspects of ESG are important, compared to just 6% of UK firms.