What Just Happened?
It was largely suspected that the pandemic would be the end of the corporate sustainability initiative as they focus on more immediate problems. So far, the opposite has proven to be the case with many companies re-doubling their efforts to increase sustainability in the long run[i].
What does this mean?
Climate Change has remained a central pillar of Corporate strategy. The last few months have seen many businesses committing to long-term sustainability goals. Demonstrating that despite the pandemic, companies are still aware of the potential risks’ climate change poses to their businesses[ii].
For instance, Apple announced plans to become net-zero emissions[iii] across their business, supply chains and products by 2030. Which is 20 years ahead of the Intergovernmental Panel on Climate Change’s goal[iv]. As it is already carbon-neutral across its business operations and powered by 100% renewable electricity, this target seems achievable. [v]
Apple isn’t the only business striving to meet strong sustainability objectives. BP has pledged to pivot towards low carbon energy and to lower emissions by 30-35% by 2030.[vi] Kingfisher has vowed to become ‘forest positive’ by 2025, meaning they plan to create more forests than they use. [vii]Hopefully, these strong commitments will influence other companies to take a step in the same direction.
Furthermore, companies are making the change to become more sustainable for several factors including: investor returns and consumer preferences. ESG (Environmental, Social, and Governance) investing has seen an increase in popularity recently. In Europe alone investors put a record €120bn into sustainability funds (2019) which is more than double the 2018 amount.[viii]
Sceptics had predicted that investor appetite would shrink if hard times struck. However, the evidence supports that companies behaving ethically and prioritising ESG investments have been more resilient during the global economic down turn. Due to sustainable investing portfolios being more secure in the chaotic and unpredictable Investment market. [ix]
This may be a contributing factor in the calls of over 150 companies to implement the UN’s Sustainable Development Goals at the forefront of the UK’s economic recovery plans. [x] With key priorities including; aiding the transition to net-zero and creating coherent polices for a healthy planet. [xi]This approach is echoed throughout the world with many regions advocating to ‘build back better’ for a more sustainable revival. [xii]
How does this affect the legal sector?
General Counsel and in-house legal teams are at the front of the crisis response. Performing roles such as navigating contractual liabilities, ensuring satisfactory governance oversight and stakeholder rights. Furthermore, they look to ensure consistency between sustainability and short-term crisis response measure to mitigate the medium and long-term risks should harm and injury arise.[xiii]
Top law firms have been keen to demonstrate that they are taking a proactive approach to issues that are important to their clients, employees and wider stakeholders, such as sustainability. In general, people tend to work with organisations that share similar values. [xiv] A rise in companies taking a more sustainable approach could result in law firms doing the same to maintain good business relations.
It is important to note that some law firms are already carbon neutral and operating in a more sustainable way. For example, Freshfields has been carbon neutral since 2007[xv] and DLA Piper believe that retaining a consistent approach to sustainability is not only the right thing to do but is also an important factor to mitigate long-term legal risks. [xvi]This could encourage other law firms to follow a similar path.
Written by Isabella Hunter
Assessing firm:
#Linklaters #SlaughterandMay #CliffordChance #DLAPiper #FreshfieldsBruckhausDeringer #HerbertSmithFreehills #MishcondeReya #PinsentMasons #Shoosmiths
References:
[i] Oliver Dudokvan Heel, ‘Has COVID-19 dampened corporations’ sustainability ambitions?’(Freshfield Bruckhaus Deringer ,10 September 2020) <https://sustainability.freshfields.com/post/102geqf/has-covid-19-dampened-corporations-sustainability-ambitions> accessed on
[ii] Oliver Dudokvan Heel, ‘Has COVID-19 dampened corporations’ sustainability ambitions?’(Freshfield Bruckhaus Deringer ,10 September 2020) <https://sustainability.freshfields.com/post/102geqf/has-covid-19-dampened-corporations-sustainability-ambitions>
[iii] Net-zero emissions or carbon neutrality is when there is a balance between carbon dioxide emissions and carbon removal or simply by eliminating carbon dioxide emission completely.
[iv]The Intergovernmental Panel on Climate Change, <https://www.ipcc.ch/#:~:text=The%20IPCC%20was%20created%20to,of%20knowledge%20on%20climate%20change.>
[v] Matt Mace, ‘Apple Target net-zero emissions across operations, value chain and products’ (Edie Newsroom, 21st July 2020) <https://www.edie.net/news/6/Apple-targets-net-zero-emissions-across-operations--value-chain-and-products/?utm_source=Edie+Weekly+Newsletter&utm_campaign=dd0c38e482-weeklynewsletter_COPY_76&utm_medium=email&utm_term=0_02b6d7c115-dd0c38e482-102526489&mc_cid=dd0c38e482&mc_eid=cdc8ab5abc>
[vi] Press release by bp, ‘From International Oil Company to Integrated Energy Company: bp sets out strategy for decade of delivery towards net zero ambition’ (2020) <https://www.bp.com/en/global/corporate/news-and-insights/press-releases/from-international-oil-company-to-integrated-energy-company-bp-sets-out-strategy-for-decade-of-delivery-towards-net-zero-ambition.html>
[vii] Edie Newsroom, ‘Kingfisher pledge to become ‘forest positive’ by 2025’ (2020) <https://www-edie-net.cdn.ampproject.org/c/s/www.edie.net/amp-news/7/Kingfisher-pledges-to-become--forest-positive--by-2025/>
[viii] Pilita Clark, ‘ESG strategies still buoyant despite Covid, say in-house lawyers’ Financial Times (2020) <https://www.ft.com/content/6621918c-a3e8-11ea-a27c-b8aa85e36b7e>
[ix] Donald Eubank, ‘What we’ve learned from how sustainability and sustainable companies have weathered the COvid-19 crisis’ Eco-Business (2020) < https://www.eco-business.com/opinion/what-weve-learned-from-how-sustainability-and-sustainable-companies-have-weathered-the-covid-19-crisis/>
[x] These companies include; charities, universities and trade associations
[xi] Ben Edwards, ‘Nine law firms back call for UK government to put sustainability at heart of COvid-19 recovery’, The Global Legal Post (2020) <https://www.globallegalpost.com/big-stories/nine-law-firms-back-call-for-uk-government-to-put-sustainability-at-heart-of-covid-19-recovery-38175384/>
This includes some notable law firms, such as Linklaters, Slaughter and May, Freshfields and Clifford Chance.
[xii] Oliver Dudokvan Heel, ‘Has COVID-19 dampened corporations’ sustainability ambitions?’, Freshfield Bruckhaus Deringer (2020) <https://sustainability.freshfields.com/post/102geqf/has-covid-19-dampened-corporations-sustainability-ambitions>
[xiii] Jonathan Exten-Wright, Sarah Ellington, Daniel D’Ambrosio, ‘Post-COVID-19 Sustainability and ESG disputes: human rights commitments and key legal risk during times of crisis’, DLA Piper (2020) <https://www.dlapiper.com/en/us/insights/publications/2020/05/esg-post-covid-19-sustainability-human-rights-crisis-legal-risks/>
[xiv] Priti Hoomann, ‘Sustainability in the Legal World’ <https://www.dnvgl.co.uk/assurance/articles/Sustainability-Latest-News/Sustainability-in-the-legal-world.html>
[xv] Oliver Dudokvan Heel, ‘Has COVID-19 dampened corporations’ sustainability ambitions?’, Freshfield Bruckhaus Deringer (2020) <https://sustainability.freshfields.com/post/102geqf/has-covid-19-dampened-corporations-sustainability-ambitions>
[xvi]Jonathan Exten-Wright, Sarah Ellington, Daniel D’Ambrosio, ‘Post-COVID-19 Sustainability and ESG disputes: human rights commitments and key legal risk during times of crisis’, DLA Piper (2020) <https://www.dlapiper.com/en/us/insights/publications/2020/05/esg-post-covid-19-sustainability-human-rights-crisis-legal-risks/>
Disclaimer: This article (and any information accessed through links in this article) is provided for information purposes only and does not constitute legal advice.