Sustainability is not a new topic. The UN SDGs’ roots go back to the early 1990s. Yet, in the world of big law, the topic has just recently entered the game. We are just learning to walk. But we are learning to walk fast. 

Legal instruments are a tool for sustainability that has not been used in the slightest. 

For a long time, policymaker strategies for sustainability had relied upon voluntary action. 

Companies therefore had placed the topic of sustainability outside their legal departments.  

Big law firms had rather focused on other big themes such as digitalization, BREXIT or globalization being top priority for business development. 

This trend had been aggravated due to misconceptions and cultural resistance: sustainability had been regarded as a topic for hippies rather than for serious businesses. 

However, there has been a trend reversal.

Policymakers have shifted their approach from asking voluntary action to setting factual constraints for companies. As a part of this new approach, regulators have begun to become active. 

With regulators providing for tangible sustainability compliance, companies need to react. With sustainability becoming mandatory, companies shift the topic from the head of marketing to the CEO. With sustainability becoming a compliance topic for the CEO, GCs are instructed to react. With sustainability becoming an investment and buying decision criteria, immediate and yet thorough and strategic action is required.

This is why big law has entered the game, often branded in the capital markets’ favorite term for sustainability “ESG”. Market observers even call it gold fever.

In the race for the gold, big law firms are setting up ESG practice groups as new units to satisfy the increased demand for clear legal guidance in sustainability. 

The first mission in any big law firm wishing to establish themselves as leading legal ESG advisor is capacity building. 

We need to understand that professional sustainability is neither an ideology or speak-up-topic, but firstly a technical concept based on several gold standards, which were neither invented by lawyers nor regulators nor Fridays-for-Future movements.

However, policymakers, regulators and auditors do follow exactly these technical concepts. 

Only legal advisors who are up-to-date about the technical and professional dimension of sustainability, beyond personal opinions, current debates and the regulatory demands, can be the trusted legal advisors clients expect from a tier-one firm. 

From a business development perspective, sustainability being an established technical concept is a key differentiator (as opposed to digitalization, BREXIT and globalization), which has to be taken into account when developing an ESG practice group. 

The second mission is to consider the highly interdisciplinary nature of sustainability. This takes place at several layers. 

Certainly, sustainability’s legal implications extend throughout legal practice areas. From capital markets, over corporate law, employment law, commercial contracts, data protection and even cartel law and other areas that you probably would not connect with it at first glimpse.

This is because the professional definition of sustainable business practices includes far more than climate protection. 

Sustainability is a grand total of responsibility at the levels of labour, environment, pro-curement and corporate governance. According to professional standards, the prioritization of each level depends on industry specifics. 

Also, while we emphasize the growing juridification of sustainability, we have to bear in mind that sustainability is not a merely legal matter. Similar to other compliance matters, organizational aspects play a fundamental role. 

In addition, there is different engagement levels which we are observing at companies. 

Some put effort into transforming their business model into a more sustainable one, some aim for regulatory compliance with recent sustainability legislation only. Others have discovered legal instruments for making their sustainability strategy more tangible. 

When developing advisory products, this multi-layered interdisciplinarity has to be taken into account, in order to fulfill big law’s full-service value proposition. 

At the same time, big law has begun to put an effort into their own professional sustainability setup, often referred to as Corporate Social Responsibility (CSR) or Corporate Responsibility (CR). 

The particular meaning of big law’s own sustainability setup follows a trickle-down effect, as intended by policymakers. 

As a supplier of legal services, you cannot be a sustainability risk if companies work with you. Especially, if you want to advise them on legal implications of sustainability. 

Therefore, big law needs the same audit certificates as other companies. Obtaining these requires structural effort and investment. In the short, medium and long term. And first and foremost recognition what sustainability actually means at a professional level.  

The demands set by the market, regulators, customers and workforce for more sustainability are on the rise. At companies and big law’s doorstep alike.

Realistically, a transformation towards sustainability cannot be built in a day. However, in a gradual and intelligent process of continuous improvement, as the professional sustaina-bility standards suggest. 

We just need to start walking further.  

This article is part of the essential guide "How to implement ESG policies". Purchase the full guide here.