Sustainability in the Legal World

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The clients of most law firms today are faced with a range of sustainability challenges.  Increasing environmental regulation, employee wellbeing, supply chain risks, stakeholder engagement, and human rights and anti-bribery and corruption are just a few of the issues that businesses are rising to the challenge of addressing. 

People choose to work with organisations that share their values; clients of major law firms are no different in their desire for partners whose focus mirrors their own, not just when it comes to business strategy, but increasingly, their sustainability strategy. Top law firms are keen to demonstrate that they are able to take a proactive approach to issues that are important to their clients, employees, and wider stakeholders. 

Stakeholders often turn to corporate responsibility reports to gain an insight into the sustainability commitments of an organization. Of the top five law firms within the ‘magic circle’, all five have a corporate responsibility report or summary, describing a range of issues important to their organisations. Upon review, however, a number of areas for improvement were identified in their approach towards reporting and communication. 

The sustainability issues that most law firms address include Managing business and client relationships, Diversity and inclusion, Community engagement, and Safeguarding the environment. Only two out of the five organisations however have a formal materiality process to identify the issues most important to their business and their stakeholders. Evidence of SMART Targets and KPIs on sustainability issues also appears to be fairly limited, with only one of the five reporting progress on targets beyond core environmental issues. Only one of the five referenced the Global Reporting Initiative (GRI), which is considered to be best practice in sustainability reporting; and only two organisations have their report externally assured, a process which provides stakeholders increased confidence in the robustness of reporting. 

While all organizations appear to have an informal approach to stakeholder engagement, evidence of a systematic process of identification of and responding to stakeholder needs was not found. Supply chain issues were briefly mentioned in a couple of the reports, but there was limited information on what was being done in terms of identifying and mitigating supply chain impacts. 

On the positive side, there appears to be a growing awareness of human rights and Global Compact Principles, with two of the five referencing the UN Global Compact Principles and the UN declaration on Human Rights. There also seems to be increased focus on issues such as social investment funds and business and ethics. Interestingly, the Legal Sector Alliance appears to be a driver towards improved reporting and transparency across the industry, particularly on climate change issues. 

It is evident that sustainability in the legal world appears to be moving beyond traditional pro bono work, charitable donations and paperless offices, although there is still a long way to go.

Sustainability and legal compliance