In the context of growing recognition of the importance of socially responsible business practices, law firms are increasingly incorporating Environmental, Social and Governance (ESG) factors into their internal policies and external client offering.
Internal policies may include those relating to reducing the firm’s carbon footprint, ensuring ethical governance, and promoting diversity and inclusion within the workplace. Clients may seek advice on implementing such policies into their own practices, and on navigating the evolving regulatory landscape in relation to recent or incoming ESG related disclosure and reporting obligations.
A firm’s pro bono activity (providing legal services to individuals or charities free of charge) can play an important part in bolstering and growing a firm’s ESG credentials. Not only can pro bono work strengthen a firm’s external ESG client offering in new and evolving areas, it can also help to embed the value of social responsibility within the firm’s business practice and culture, ensuring that internal ESG commitments are not reduced to a ‘tick box’ exercise.
External: Strengthening a firm’s ESG Client Offering
Pro bono projects can help expand and deepen a firm’s client facing ESG expertise. Working with charities or non-governmental organisations to provide research, legal analysis or commercial advice can help to build up capabilities in new and emerging areas that fall within the ESG bracket.
In a report co-authored with pro bono client the Impact Investing Institute earlier this year, a Reed Smith team provided guidance on the regulatory requirements, market-led initiatives, and voluntary codes under which companies disclose their social sustainability metrics in the UK in sectors including housing, employment and education. The analysis undertaken through a pro bono report like this one can strengthen a firm’s experience in the evolving ESG space.
Internal: Taking ESG commitments beyond compliance
Supporting a wide range and uptake of pro bono work can be an important factor in enhancing and demonstrating a firm’s commitment to ESG. Many law firms have a long-standing tradition of engaging in pro bono work, which may predate formalised ESG policies or practices. Here, a commitment to social responsibility is likely to already be embedded into the firm’s business practice and culture.
For example, working with The Chancery Lane Project to assist in the drafting of climate-aligned clauses on climate related risks and impacts across various sectors not only strengthens Reed Smith’s internal ability to advise clients in this area, but it has also supported the incorporation of certain clauses into our internal firm policies. Equally, law firms are able to use their own experience of compliance with social responsibility legislation (like supply chain regulations and anti-slavery policies) to provide pro bono commercial advice to charities on their compliance obligations in this same space.
Both ESG and pro bono are rooted in the concept of social responsibility. While ESG commitments require firms to take responsibility for their impact on society and the environment, pro bono work is a tangible way for law firms to demonstrate this commitment. Firms can harness the interaction between ESG and pro bono work to demonstrate their internal ESG commitments, and to strengthen their ESG offering.