The business community has been asked to move beyond its parochial financial concerns and focus on issues that impact the future of our planet and the human race. Investors want them to broaden their focus from “shareholders” to “stakeholders,” including a company’s employees, suppliers, customers and communities affected by the entity’s processes and products. According to the International Bar Association Law Firm Management Committee, law firms, too, are looking at how they “can adopt ESG best practices and adhere to them; not only for responsible business management but also to ensure better growth and new business opportunities for themselves.”
August 24, 2022
Practice Management Advice: Law Firms Can Do Better by Doing Good
Carol Shiro Greenwald
As defined by the Bristol Law Society, ESG is the acronym for this broader focus:
- E stands for environmental, defined as “the effects on the physical, natural environment” such as climate change, extraction and use of raw materials, carbon emissions, waste and pollution and effects of human activity on biodiversity.
- S stands for social, defined as the entity’s impact on employees and other related communities including shareholders, suppliers and clients. It includes factors such as respect for human rights, consumer protections, data protection and privacy, diversity and inclusion, employee relations and working conditions, and health and safety.
- G stands for governance, which includes “making sure there are systems in place to ensure accountability within a corporation.” It involves factors such as involved leadership, executive compensation, board diversity, audits and tax strategy, transparency of processes and procedures, whistleblowing and anti-bribery/corruption policies.
Law Firm Esg Initiatives
Some Am Law 100 firms and large regional firms, nudged into it by their clients, have begun to integrate ESG programs into their culture. Smaller firms and solos with clients practicing ESG should consider the value of ESG programs because they can enhance their reputation, add value to their overall brand and strengthen their role as a community leader. Single practice area boutiques focused on real estate, landlord-tenant law, zoning and land use, energy, immigration, corporate M&A and litigation practices should all consider the value of adding sustainability programs as a natural extension of their practices.
Law Firm Esg Resources
One of the problems holding ESG programs back is the lack of widely accepted benchmarks, measurements and standards. This leads many firms to begin their ESG program with sustainability efforts because the targets are obvious, low-hanging fruit with already vetted programs, methodologies and measurements. According to Gayatri Joshi, executive director of the Law Firm Sustainability Network, “The key to law firm sustainability is taking a measured approach, and systematically looking at firm functions and departments to learn where the biggest impacts can be made using measurements and engagement as a guide.”
Firms looking for program ideas with established metrics can turn to resources such as:
- Bar associations like the New York State Bar Association, which has created an ESG committee in the Business Law Section to provide a forum for discussion, shared resources and education.
- The International Bar Association has gone a step further and produced an ESG Toolkit for Law Firms (September 2021). The toolkit helps members “understand the scope and importance of ESG from a law firm management perspective,” provides a self-assessment tool to establish a “firm’s current ESG compatibility” and offers implementation ideas and guidance.
- ALISS, the American Legal Industry Sustainability Standard, was created by the Law Firm Sustainability Network, a group of approximately 50 law firms that share programs and successes related to environmental sustainability efforts. The ALISS is “a sustainability assessment specific for the legal industry, identifying strengths and opportunities to improve law office sustainability programs.”
- ABA/EPA Law Office Climate Challenge was adopted by the ABA House of Delegates in 2009. “Acknowledging the impact that law offices can have on climate change, in March 2007, the ABA Section of Environment, Energy, and Resources launched the Law Office Climate Challenge tool in cooperation with the U.S. Environmental Protection Agency (EPA). This tool is designed to encourage law offices to take specific steps to conserve energy and resources, as well as reduce emissions of greenhouse gases (which cause global climate change) and other pollutants.”
10 Elements of Highly Effective Sustainability Programs
For firms interested in beginning the ESG journey, the Law Firm Sustainability Network has created a short list of the 10 elements of highly effective sustainability programs:
- Benchmarks and assessments. Make program decisions by measuring consumption related to specific activities such as travel, and then make changes that lead to reduced usage and cost savings.
- Governance. Provide an action framework and leadership from senior leaders with titles such as “director of sustainability” or “chair of the Green Team.”
- Sustainable vendors. Use suppliers who incorporate sustainability practices into purchases such as printer supplies, office supplies, coffee, etc.
- Paper and paperless. Use technology to save on energy, space, logistics and costs.
- Energy. Reduce energy usage using “lights-off” policies, motion sensors and timers, and programmable thermostats.
- Technology. Implement server virtualization, transition to up-to-date computers, etc.
- Building design. Pursue LEED certification for office and building changes or become Energy Star-rated.
- Reducing, recycling and donating. Mandate measures such as eliminating plastic straws and single-use bottles, separating recyclables and shredding paper. Initiate composting programs.
- Employee engagement and culture. “To really flourish it needs to be ingrained in the culture and it needs to be easy.” Reinforce sustainability as part of the firm’s culture as early as the onboarding process. Use movies, lectures, contests and volunteering opportunities to keep sustainability top of mind, and instill pride in employees who participate.
- Collaborations, partnerships and community giveback. Partner with other community groups to create programs and support awards for community sustainability efforts.
The Law Firm Sustainability Network ties these efforts back to the reasons for embracing ESG. “[A] majority of law firms believe that the outlook of sustainability is good, and that buy-in, benchmarking, best practices, and tracking information will help law firms be effective in implementing their programs. ... [F]irms who embrace and adapt to this changing landscape will increasingly benefit and recognize new opportunities from their social investments in sustainability.”