Environmental, social and governance — the framework known as ESG — is a relative newcomer to the alphabet soup of modern legal practice.
The phrase emerged only in 2004, when it featured in a United Nations report that encouraged businesses and investors to raise their game on sustainability, diversity and inclusivity.
Fast forward 20-odd years and even the most mundane corporate meeting may well include a mention of ESG — covering issues arising from social responsibility and environmental sustainability to ethical supply chains and anti-corruption measures.
This in turn has triggered a rise in opportunities for lawyers, with governments, regulators and businesses worldwide increasingly focused on rules relating to the environment, human rights and climate change.
“The key challenge in providing good ESG legal advice is being able to work out what really matters,” says John Buttanshaw, the co-head of ESG at the City law firm Travers Smith. “Clients can be completely overwhelmed by the incredibly wide scope of both the laws bombarding them and the underlying subject matter. Simply telling them what their obligations are doesn’t cut it”.
Instead, lawyers need to identify risks, which, Buttanshaw says, “requires an ESG lawyer to understand the client’s business at an operational level, to be super commercial and pragmatic, and to be more than a little brave”.
“Fundamentally, ESG is requiring businesses to think about the interrelationship between their business and broader environment and society, and to seek to make that a more positive relationship. Whilst there is currently a slight regulatory wobble in how much legislators should intervene and force businesses to address those issues, ultimately given wider climate and world events this is only going to get more important.”
For now, however, the whole concept of the “ESG lawyer” remains a developing phenomenon, as Matthew Germain of the law firm Osborne Clarke points out. “Most of the individuals currently presenting themselves as ESG lawyers will have a core practice area behind them,” he says, adding: “They might be a finance lawyer doing a lot of work around sustainable finance, or a litigator who is focusing on anti-bribery and corruption or responsible business practices.”
Germain expects the field to develop over the next few years. “Students entering the law now will see the role of ESG lawyer become a practice area in its own right, with individuals advising on environmental, responsible business, governance … the whole package,” he says. “At the moment, though, there are probably no lawyers anywhere who do all those things — most ESG lawyers’ core practice will focus on one or two of them.”
Potential entrants may also be attracted by associated opportunities outside commercial law firms, suggests Olivia Hamlyn, a law lecturer at Birkbeck, University of London.
She highlights an “increasingly sophisticated” approach by environmental campaign groups, saying that “there is lots of activity within climate litigation, both in the UK and internationally, that is being carried out by organisations such as ClientEarth, Friends of the Earth and others … This is focused on holding both the government and corporations to account. Then there are areas such as net zero and just transition which are relatively new and evolving.”
Keeping track of this rapidly changing landscape can be difficult — although it is made somewhat easier by the presence of several well-regarded and at least partly free-access media sources. These include Business Green, Edie and the Ends Report.
Hamlyn also recommends joining professional organisations such as the UK Environmental Law Association, whose members include commercial lawyers, campaigners and environmental consultants.