ESG & Sustainability – The General Counsel’s Route To The Top?

It’s often said that the role of General Counsel is seen very differently in the UK and Europe and the US; many CEOs in the US have been lawyers, but that’s not so true on this side of the Atlantic. Others have written more knowledgeably than me about the reasons, but recently I’ve been wondering if we’re moving into a new phase for General Counsel. Will the advent of stakeholder capitalism and the growing importance of ESG and sustainability enhance the influence of General Counsel around the world significantly in the years ahead?  Could it take even more of them to the very top in business?

The role that General Counsel will play in the transition to net zero and tackling the climate crisis is well documented. ESG and sustainability are constantly referenced in the legal press and social media. Organisations like Lawyers for Net Zero, The Chancery Lane Project and the Net Zero Lawyers Alliance are very active and finding ways to help lawyers and their clients to implement the regulation and legal provisions that will make a difference on all aspects of ESG, sustainability and climate action.

Governance is the foundation on which the E and the S of ESG rest, which is of course where lawyers come in, ensuring effective implementation and compliance with legislation and regulations within their businesses as well as playing their part in ensuring best practice is applied and leading on important issues.

I’m personally very interested in the E of ESG as well as sustainability and interested to see how climate action, net zero and sustainability (including social issues) increasingly intersect for business in the coming years. In the Deloitte CFO report published in December last year, 62% of CFOs surveyed responded that they expect corporate regulation to increase in the coming years, some of which is likely to relate to tackling climate change and the transition to net zero. Furthermore, the report indicated that climate change is now viewed as one of the top three risks for business but equally on a positive note, 43% of the CFOs surveyed believe that the transition to net zero will have a positive impact on investment.

Regulation, risk and investment? All sound like things that lawyers get involved with to me and if they’re at the top of the list for the CFO they going to be constant priorities for CEOs and the C-Suite generally.

Could this mean enhanced and substantive strategic input from General Counsel which will put them firmly in the C-Suite? Once there, will we see more lawyers in the UK and Europe given the opportunity to show their leadership and strategic skills and increase their chances of becoming CEOs in the era of stakeholder capitalism?

The role of guardian of the values and ethics of a company has never been more important, but there is also the question of leadership and vision. On their own, governance, risk and compliance are cold technical terms; it’s leadership and a vision that inspires and will put sustainability at the heart of business and make the real difference.

It’s fantastic to see General Counsel increasingly leading on ESG and sustainability. All power to them in leading the way and making it to the very top.