Meaningful action on climate change requires a collaborative spirit. It needs consistent effort from people and teams across an entire business. That can be difficult for any organisation to collaborate on, but it is particularly difficult for international organisations.
When it comes to environmental, social, and governance (ESG) initiatives, organisations need to consider national and international ESG standards, comply with regulations across jurisdictions, and provide unique solutions that account for differences between countries.
In this article, I will look at our recent ½Û×ÓÊÓƵ report, Implementing the E of ESG: why in-house lawyers are instrumental, and use the findings to show the important role that in-house counsel can play to ensure effective international applications of ESG initiatives.
The first step is compliance. In-house counsel must ensure global sustainability initiatives meet the demands of national compliance. Collaboration is essential, as stressed by General Counsel we recently interviewed. In-house counsel can collaborate with colleagues from across the world, use their knowledge of national legislation, and find allies committed to environmental action. These allies will inform global policies, ensuring that overarching ESG initiatives are compliant in every jurisdiction.
In-house counsel should regularly review policies, considering all relevant legislative changes. In-house counsel should also look to the future, tracking upcoming legislation and consultations to ensure that global initiatives are likely to remain compliant with legislation that governments are likely to enact.
In-house counsel should remember that compliance is the minimum. , General Counsel and Compliance Officer at , says: ‘As a compliance officer, my focus is around leadership behaviours and encouraging a culture of speaking up, not just technical box ticking.’ Meaningful change stems from going beyond the minimum, convincing people across your international company to commit to ambitious steps, and leading that ambition.
In-house counsel need to make international initiatives measurable. Measurement is important as it gives companies greater purpose and direction, demonstrates successes and failures, and provides focus for improvement. My colleague explored this in a recent blog: Why you should publish company-wide sustainability targets. It also supports ESG reporting, which can increase a company’s reputation, improve investment, and demonstrate strong business ethics.
Companies should aim to follow recognised standards around ESG reporting. But that is not always easy, as there is a notable , with too many standards board and third-party providers to rank ESG scores. It gets worse at an international level. There are myriad groups – consulting firms, , , and so on – all attempting to establish a global ESG standard. No such standard presently exists.
The key for in-house counsel, as the ½Û×ÓÊÓƵ report stresses, is to get started, picking logical and sensible data that is consistently used by different standards, allowing a greater ease of reporting. The data should allow all jurisdictions to report on progress, demonstrate impact, and produce robust and measurable data that conforms with ESG reporting.
As suggested above, international initiatives should ensure national compliance, as well as taking further steps to ensure climate action is meaningful. That depends on company-specific actions that consider the business’s history, resources, and capacity in its local locations.
In-house counsel should encourage company-specific actions that consider differences between countries. Take banking and financial services company , for example. To support the Paris Agreement, they have taken a three-pronged approach: accelerate , reduce emissions, and manage financial risk.
Standard Chartered works across Asia, the Middle East, and Africa and has engaged with climate-positive companies in various ways. It partnered with and UK-funded financial sector development agency FDS Africa. It also helped carbon-intensive firms across Asia manage their emissions.
In short, the bank engaged in meaningful climate action, marrying the strengths of the company with the unique challenges of the countries. Andrew Dixon Smith, who leads , works from the bank’s Singapore offices. In the ½Û×ÓÊÓƵ report, he makes an essential point: ‘Sustainability leadership is…about evolution and lawyers will find themselves in the middle of that at some point, so you might as well get on with those issues, get involved, get to the table and contribute.’
In-house counsel can contribute by ensuring companies comply with regulations and adhere to sustainability standards. And, crucially, they can help to tackle climate change at a global scale by considering the unique needs of every country and bringing global organisations together. By taking such actions, in-house counsel can ensure their ESG initiatives are robust, forward-thinking, and meaningful.
Our practical guidance content provides a great starting pointing for legal counsel looking for practical resources on sustainable business. Legal counsel can use this content to advise their business on how to approach sustainability issues, set targets and measure impact, and as well as maximise opportunities and minimise risks.
These practice notes are popular with those looking how to set targets and reporting standards for their business:
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