Skip to content
Thomson Reuters
Executive Perspectives

EXECUTIVE PERSPECTIVE: The evolution of sustainability towards the legal profession

Tim Nixon

07 Jan 2019

Risk related to environmental, social or governance factors (ESG) is a natural for lawyers.  Water and air pollution, diversity, consumer protection, management structure, and employee relations are all areas of growing concern from a regulatory, investor, and customer perspective.  As such, they also matter increasingly to how legal risk and opportunity are measured and presented.  In this piece with Dave Curran, Senior Vice President and Chief Business Officer at FiscalNote, we hear from an insider on how ESG data and sustainability are broadly gaining traction.  Tim Nixon, Managing Editor, Thomson Reuters Sustainability.

Tim: We hear a lot about ESG and sustainability increasing in importance.  Do you see this?

Dave: Until very recently ESG and Sustainability were genuinely embraced by a small minority of progressive companies focused on community, brand and reputation.  Many companies have published aspirational principles and public pronouncements focused on a variety of environmental, governance and related best practices. Yet little was done to match the public pronouncements with investment in the people, money and technology needed to implement, track, measure and monitor these initiatives. The ones that did get funding and attention were typically driven by legal mandates or major public demands.  But even some of these lost steam after the initial attention and enthusiasm waned.

More recently, organizations have responded to a variety of rapidly shifting socio-political norms, as well as external and internal demands from a variety of stakeholders, to make ESG and Sustainability a more prominent and consistent component of an organization’s planning process. Alongside traditional Environmental, Safety and similar functions, companies have established CSR and Inclusion & Diversity and a variety of other departments to handle the burgeoning “industry” of Sustainability.  Following from this “acknowledgment” of sustainability as relevant, a growing number of global companies are integrating sustainability into their business models to drive competitive differentiation.  Recent reporting by Thomson Reuters helps to illustrate how “maturity” in sustainability is helping to future proof businesses, from automotive, to airplanes to capital goods to energy.

Tim: How does the practice of law factor into this evolution?

Dave: Years ago it was easier to distinguish between Legal and ESG issues.  Today, the lines are blurred.  Many of the organizations that have taken very public positions on carbon emissions, fair trade and the like are now essentially required to adhere to these as if they were legally mandated.  Often these companies are in green funds and their investors, employees and other stakeholders are holding them accountable. I call these the “superlaw” and they need to be tracked similarly to legal and other compliance regimes.  Also, these ESG/Sustainability initiatives often start out as voluntary and socially based and then can morph into legal or quasi-legal/regulatory requirements with complex workstreams.  These include long-term policy tracking and planning.

Lawyers – especially in-house — have had to adapt and evolve so that they can be counsellors in this new era, balancing the genuine interests of the client across a broader than purely legal spectrum.

Tim: What will be driving the integration of ESG into the law? 

Dave: The integration is already underway – but the dot connecting is not that obvious or planned.  It will be increasingly intertwined as the line between traditional legal work blends with broader General Counsel-ESG remits, that are expanding to take on more global policy and government relations issues interwoven with legal matters.

Corporate functions – including Legal, Compliance, Regulatory and Government Affairs — are under tremendous pressure to do more with less.  Lawyers and compliance functions are being pushed to make better use of people, process & technology to measure, track and monitor progress against the multi-fold tasks. ESG and Sustainability initiatives are simultaneously business-building and risk mitigating.

Tim: Where will this integration happen first? 

Dave: The integration starts where the natural dovetails make the most sense.  So, Environmental issues have both legal and ESG/Sustainability requirements and mandates.  Similarly employee safety standards now go beyond legal requirements to incorporate socially responsible and corporate conduct standards such as banning smoking on company campuses even if that is not required by local law.  There is also the range of risk evaluated as part of a merger, acquisition or private equity transaction,  which increasingly incorporate ESG performance as part of the decision making matrix.  Finally, there is a growing body of ESG-related financial infrastructure requiring legal expertise in support of the broader “green finance” movement.

Tim: Why would having lawyers at the table matter in addition to investors and other stakeholders?

Dave: Lawyers are uniquely trained to critically analyse complex scenarios and workflows to identify and mitigate risk.  Also, once ESG requirements have become embedded within an organization, lawyers are well positioned to ensure compliance.  It’s essentially the same exercise as legal mandates, as opposed to an investor preference or inquiry, which may carry much less weight.

Tim: What new advantages could ESG give law firms who integrate it into how they do business?

Dave: Law firms and their outdated cost and pricing model – pyramid of hourly billings – are increasingly becoming commoditized and being replaced by more efficient alternative staffing models, process and technologies.  To differentiate and stay competitive, firms should proactively extend their service offering to include ESG/Sustainability, especially with organizations that don’t have large in-house operations.  These issues can be very complex and time consuming, and often have very high “C Level” and Board exposures.  A perfect place for law firms to complement their clients’ operations.

Tim: How will all of this integration affect the strategy at FiscalNote?

Dave: FiscalNote’s core technology and various products and services were specifically designed to incorporate policy and other non-legal streams with legislative and regulatory tracking.

It’s impossible for organizations, particularly global ones, to keep up with the volume and velocity of data, initiatives, workflows, laws, rules and regulations.  They need to track changes, measure those against baselines and then make the information they have actionable and measurable.  Simply throwing bodies at these complex moving parts without technology to do the heavy lifting will be insufficient and can allow organizations to have a false sense of achievement.  Gaps will inevitably happen and many times be missed without a technology platform to track and visualize all the moving parts.  I call this the “risk of risk” – whereby organizations cannot find what’s hiding in plain sight.

FiscalNote leverages the power of the technology, together with Augmented Intelligence, to sort through billions of data points in fractions of seconds so that information curated, organized and available 24/7 Executives can exercise their judgment and then can use FiscalNote’s platform to produce reports to demonstrate progress against objectives – something that’s virtually impossible to do with any accuracy without a tech platform designed to address this specific set of challenges.


EXECUTIVE PERSPECTIVE: The promise of innovation EXECUTIVE PERSPECTIVE: Can everyone have access to safe drinking water by 2030? EXECUTIVE PERSPECTIVE: Private Equity for Sustainable Development EXECUTIVE PERSPECTIVE: A digital ecosystem for the environment EXECUTIVE PERSPECTIVE: Accelerating Green Banking in the Greater Middle East EXECUTIVE PERSPECTIVE: Caring About More Than Jobs EXECUTIVE PERSPECTIVE: Corporate Sustainability Strategy Starts with Employee Health EXECUTIVE PERSPECTIVE: Growing sustainable lending EXECUTIVE PERSPECTIVE: Transparency, the foundation to any solution for climate EXECUTIVE PERSPECTIVE: How green can a building be?