Recent years have seen a boom in ESG (Environmental, Social, and Governance) in legal consulting. ESG factors are continually growing in importance to businesses, investors, customers, and suppliers, and the trend shows no signs of stopping. Expected to continue for many years, corporations and law firms are now hiring their own armies of ESG experts, consultants, and advisors.
Globally, ESG has taken hold as a central concern in corporate, financial, and legal entities to such a degree that to neglect ESG integration in your business is likely to lose you customers and jeopardize your competitive advantage. The financial industry in the United States today has already fully incorporated ESG, with younger investors, in particular, fueling the development.
It follows that there has also been an boom of ESG in legal consulting. If you are a legal firm looking to incorporate ESG into your company structure, look no further than Collier Legal Search. We can draw on our extensive network of legal professionals fully versed in ESG to help overhaul your company to meet modern standards.
What is ESG?
Business as usual no longer suffices for U.S. companies to compete globally. With the explosion of global interest in ESG and the integration of ESG into the decision-making processes of almost every industry, you cannot afford to ignore it. But what is ESG?
ESG stands for Environmental, Social, and (Corporate) Governance, which are intangible assets within an enterprise that nevertheless translate into a kind of social credit for a company:
- Environmental relates to environmental concerns such as the climate crisis and sustainability. It includes addressing externalities associated with a company’s revenue not strictly measured in market mechanisms. Climate change and sustainability issues factor into investment choices in ways that seek to both maximize revenue and act ethically toward the environment, for example, through investment in renewables and other technologies.
- Social relates to social concerns and the imperative of a company to act in a socially responsible manner, including in its hiring process. Considerations can include human rights, diversity, consumer protection, and animal welfare, among others.
- Governance relates to rights and responsibilities in managing a company, relating to corporate ethical standards for the board, the shareholders, and the stakeholders. Examples can include issues such as management structure, employee relations and management, and employee compensation.
Each company must decide who holds the responsibility for ESG within it. Usually, it will be the board of directors, often creating unique ESG positions and appointing ESG experts to ensure compliance with its commitments.
In addition, it is becoming increasingly common for investors and stakeholders to request reporting on non-financial opportunities and risks. The Head of ESG ensures that reporting is also available for all the company’s externalities and non-financial activities.
What is Driving ESG Growth?
Companies are beginning to understand value in ways besides financial reporting. Especially among younger generations, the future shareholders and industry leaders, there is a strong imperative to support ESG companies over more traditional ones. Consumers are voting with their wallets.
However, there still needs to be convergence between ESG and the company’s bottom line. While this can appear contradictory, incorporating ESG priorities into the corporate values and culture of the company can be complementary to the bottom line, especially today.
Some of the benefits of implementing ESG initiatives are:
- Being seen as a thought leader in your industry, which today is unlikely without an ESG strategy
- Boosting the company’s social brand and reputation, both in your industry and without
- Building trust to increase engagement within the communities your business operates in
- Mitigating ESG risk exposure, e.g., by systematically detecting and assessing significant ESG risks inherent to specific business transactions
- Fostering a win-win mentality by encouraging more responsible business practices while growing the company’s bottom line in the longer term
On the other hand, some of the risks of a wait-and-see approach to ESG are:
- Waiting too long may result in extra costs if potential regulatory reforms become mandated
- Not adapting could lead to a loss of competitive advantage, hurting sales and talent attraction and retention
- Not adjusting damages the company’s brand and reputation merely through the semblance of irrelevance
ESG Drives Hiring
There is no uniform approach to ESG. It can be industry, company, or issue-specific. Your company can decide which opportunities and risks to address and be measured against by getting ahead of any universal standards or federal mandates on the issue early. Having pre-existing ESG incorporation explicitly tailored to your company can help mitigate any externally mandated demands and costs later.
Professional services network PricewaterhouseCoopers (PwC) is an example of a company that invested in ESG early. The result has been that PwC projects that it will expand its workforce by ⅓ over the next five years by hiring 100,000 new employees. PwC plans to seek experienced, qualified workers with a profound, active knowledge of ESG.
Futureproofing Your Organization
This year, U.S. law firms have begun aggressively building ESG practices into their company structures to anticipate new federal government initiatives and increasing interest from their clients.
Law firms are retooling and positioning themselves to provide legal guidance to clients regarding ESG-compliance. A legal consultant can advise on how best to perform ESG reporting according to a company approach.
A strong stance on ESG can help you attract the best new employees and retain the valuable ones you already have. Having a law firm on your side can help you smoothly transition to ESG compliance without unsettling your daily operations or upsetting your bottom line.
How Collier Legal Staffing Can Help
Collier Legal Search offers services in placing associates, partners, and legal professionals of the highest credentials at every level in corporations and law firms. With our extensive connections, experience, and exclusive approach, we have built a candidate database that delivers consistent results and on which our clients have come to depend.
We commit ourselves to satisfied clients and successful candidates. If you are considering migrating your company into ESG compliance, discover what we can do for you.