The Global Legal Post timeline: ESG and the law
How law firms and their clients are responding to the environmental, social and governance movement
Wall Street M&A powerhouse Wachtell Lipton Rosen & Katz is not known for making senior lateral hires. Last year, however, it made an important exception, bringing on board as a consultant Leo Strine, the former Delaware chief justice and a leading proponent of governance reform.
“As a judge," he said, “I thought the importance of corporations in our society could not be measured by their stock price, and that it was critical to our nation’s well-being that powerful businesses treat their workers and consumers well, support the communities in which they operate, and focus on environmentally responsible, sustainable wealth creation.”
As the environmental, social and governance (ESG) movement gains momentum, forward-thinking law firms have been positioning themselves to provide ESG advice to their clients while also getting their own houses in order.
As consultant Tony Williams wrote in The Global Legal Post, ESG is a ‘massive business opportunity for lawyers' but also a risk, given that ‘increasingly clients, employees, future employees and regulators will expect law firms to be achieving significant change in their approach to ESG issues’.
In this timeline, which will be updated regularly, we track major developments in ESG and the law.
Mayer Brown ceases its work advising the University of Hong Kong on the removal of a statue commemorating pro-democracy protesters killed during the Tiananmen Square massacre. News of Mayer Brown's role in seeking the statue's removal sparked an open letter from dozens of NGOs across the world calling on the firm to withdraw its representation.
Hundreds of Canadian lawyers sign an open letter published by Lawyers for Climate Justice (L4CL) urging Prime Minister Justin Trudeau and the incoming minister of justice and attorney general to protect Canadian citizens from the destabilising effects climate change poses to their fundamental rights by reviewing "all federal statutes and forthcoming bills through a climate justice lens and...ensure that vulnerable populations are meaningfully protected".
General counsel at 27 leading US companies pledged to ask law firms they instruct to use a new scorecard measuring the effectiveness of their diversity, equity and inclusion (DEI) policies. The Washington DC-based Minority Corporate Counsel Association (MCCA) says the initiative marks the first step in establishing a benchmark ‘to better understand minimum standards to evaluate law firms’ DEI efforts’.
FTI Consulting’s 2021 Resilience Barometer reveals 80% of surveyed companies believe they need to fundamentally alter their business models in order to restore competitiveness in the wake of the Covid-19 pandemic, with 97% of respondents actively investing in preparation for future crises, including the incorporation of artificial intelligence and analytics to mitigate risk. The top three investigation worries — identified by a third of respondents as areas of concern — were business conduct and the treatment of customers, sustainability and ESG practices, and relationships with public bodies and government contracts.
All 118 law firms participating in the latest round of Diversity Lab’s Mansfield programme achieved certification, a first since the programme began in 2017. The full certifications were awarded to the firms following a 12-month collaboration with Diversity Lab in a year when the UK-based organisation was concerned participating firms would push diversity and inclusion measures to the wayside as a result of the extra resources required to stave off the impact of the Covid-19 pandemic
Longtime Kirkland & Ellis restructuring partner Jon Henes launches C Street Advisory Group, a diversity and inclusion-focused strategic consultancy backed by Antara Capital, a Blackstone-backed multi-billion-dollar investment fund that focuses on distressed debt and special purpose acquisition vehicles. C Street’s goal is to ‘ensure alignment of the expectations of key stakeholders and calls for diversity, equity, and inclusion’, the firm said in a statement at the time.
Top Irish firm William Fry launches a service for senior lawyers to work for the firm on a fully flexible basis and a resourcing agency that will place external lawyers with its clients temporarily, similar to the virtual model that has been pioneered by firms including Keystone Law and gunnercooke in the UK and US outfit Rimon. The William Fry Connect contract allows senior outside lawyers who match its standards to practise under its banner on a flexible 'pay-as-you-work' basis.
Hogan Lovells lawyers recall their experiences working with ‘activist, artist and producer’ Shannon Galpin and a 150-strong legal team working across nine time zones in an effort to secure evacuation of elite female athletes from Afghanistan after the Taliban seized power in August.
Linklaters becomes the latest large law firm to pledge its support for reducing the environmental impacts associated with the international arbitration community by signing the Green Pledge, an initiative developed by the Campaign for Green Arbitrations. It joins rivals Allen & Overy and Freshfields Bruckhaus Deringer to commit to reducing its environmental impact through cutting necessary arbitration-related travel and using suppliers and service providers who are committed to reducing their environmental footprint, where possible.
Matheson appointed Niamh Counihan as its first pro bono partner in what appears to be a first for the legal market. Counihan splits her time evenly between leading Matheson’s pro bono legal activities and continuing in her role as the firm’s director of legal and regulatory affairs.
Global corporations are failing to meet their diversity and inclusion goals due to a lack of collaboration, consistency and action across organisations, exposing them to potential compliance issues, according to a report by Baker McKenzie and Howlett Brown.
A group of leading law firms including Allen & Overy, Freshfields Bruckhaus Deringer, HFW and Simmons & Simmons sign up to the Greener Litigation Pledge, a commitment launched by Mishcon de Reya that commits to lessen the environmental impact of dispute resolution.
Linklaters outlines plans to significantly cut its carbon emissions over the next 10 years as part of an effort to support the goals laid out in the Paris Agreement on climate change. By 2030 the firm pledges to reduce its ‘Scope 1&2’ emissions – primarily related to energy use – by 70% and its ‘Scope 3’ emissions – which are primarily related to the purchase of goods, services and travel, by 50%.
Italian firm BonelliErede refreshes its governance structure, appointing three women to its board as it looks to improve its gender balance at the senior level. The changes coincide with the firm’s introduction of a 'pink quota', a requirement that will ensure the presence of at least one woman serving on its board.
Nokia’s legal team launches an equity, inclusion and diversity (E,I&D) scorecard system to assess its six panel law firms. As part of the initiative, it will score its panel firms quarterly and annually in order to determine whether they have taken steps to implement effective E,I&D strategies.
HFW unveils a new ESG strategy led by the firm’s first sustainability partner, Giles Kavanagh. The strategy encompasses a series of targets relating to advising clients on their own ESG goals, as well as ensuring a reduction in environmental impact in its physical locations and promoting diversity and inclusion throughout its workforce.
Vodafone's high-profile GC Rosemary Martin unveils a refreshed global legal advice panel, selecting firms based on a shared commitment to promoting diversity targets and ESG best practice. ‘At Vodafone, we aim to build a digital society that enhances socio-economic progress, embraces everyone and does not come at the cost of our planet,’ she argues. ‘Our purpose is now very much at the core of everything that we do and I am pleased this now extends to our panel of legal service providers.’
Dublin firm launches an ESG advisory group, laying claim to be one of the first Irish firms to establish a dedicated sustainability-focused team. The group will be led by the Dublin firm’s energy, natural resources, utilities and infrastructure practice head Garret Farrelly, who will be supported by a cross-practice team of 12 partners.
The San Francisco giant brings on board ESG specialist Ashley Walter as a partner from Fenwick & West. It believes he will be the first partner in the US with a near-exclusive focus on advising clients on ESG matters.
Ben McQuhae's new firm will be focused entirely on sustainability and innovation. "We will choose the work we do, and do not do, by reference to the UN Sustainable Development Goals (SDGs). We will assess our mandates and measure our impact against the SDGs,” he said.
The leading Singapore firm launches a sustainability practice led by banking and finance practice partner Lee Weilin and supported by a multi-disciplinary team of lawyers across the firm, including specialists in infrastructure, M&A, trade and environmental law.
The beverage giant unveils a series of diversity targets for its US advisers with the threat that their ability to meet them will be a ‘significant factor’ in determining whether they make its first-ever preferred panel of law firms in 18 months' time. Unveiled by general counsel Bradley Gayton, the guidelines stipulate that firms that fail to meet targets for new matters over two quarters will be levied a non-refundable 30% reduction in their fees from then on until they achieve compliance.
The UK Magic Circle firm sets up an ESG taskforce led by senior partner Jeroen Ouwehand to boost its client work in the field as well as its own sustainability efforts. It is made up of 20 members drawn from across the firm and will oversee the work of more than 400 lawyers and senior personnel already tackling aspects of ESG, according to the firm.
HSF unveils a series of regional people forums to improve the ability of employees to help shape the firm's strategy. They are a ‘key initiative’ of a new People & Culture Advisory Board, which was established in June with a mission ‘to reinforce a culture of engagement, ambition and high performance’.
Ford unveils a four-year law academy programme that aims to boost the number of black students entering the law. It kicks off at the Henry Ford Academy high school in Detroit and will be rolled out in 2021 at another district school, the University Preparatory Academy High School, with the aim of it becoming a nationwide programme.
“Our clients are at differing stages of their sustainability journeys and we want to do all we can to help them achieve their ESG goals given our own depth of experience,” says Paris-based adviser to the luxury sector Alyssa Auberger as she takes up her new role.
The leaders of a host of law firms from across the globe back a United Nations statement on co-operation in support of sustainable development goals. They include Baker McKenzie chief executive Milton Cheng, Linklaters senior partner Charlie Jacobs and Justin D’Agostino, Herbert Smith Freehills’ chief executive.
The firm is among several in 2020 to publish diversity and inclusion targets, regarded as a key requirement of any D&I programme. This includes a commitment to meet minority ethnic targets in the UK and the US, aiming for 15% of new partners and 30% of senior associates and business professionals by 2025.
The launch of the Law Firm Antiracism Alliance springs from the pledges to take action by business law firm leaders on behalf of their firms that followed the killing of George Floyd in Minneapolis in May. ‘Lawyers and law firms are uniquely positioned to analyse and advocate to change laws and policies that encourage, perpetuate or allow racial injustice,’ the charter states.
The Model Statute for Proceedings Challenging Government Failure to Act on Climate Change is launched in London by the International Bar Association's (IBA’s) Climate Change Justice and Human Rights Task Force. It provides judges, policy makers and legislatures with a ready-made legal framework to make it easier for citizens to take climate change-related action against their governments in the courts, a process the taskforce says is currently fraught with difficulty.
Hong Kong-based Anna-Marie Slot, who heads up the firm’s high-yield practice, is tasked with helping clients ‘navigate the strategic challenges and opportunities of regional and multi-jurisdictional sustainability issues’. She will work with London-based strategic director Dave Rome to help both the firm and its clients improve sustainability.