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Ashurst’s NewLaw strategy continues with tech expansion
After hiring a global leader of Herbert Smith Freehills to head its NewLaw division, Ashurst has launched a new technology solution, aimed to navigate across ESG and compliance in a changing regulatory environment.
Tony Zhang
With sustainability risk-taking on a new meaning in just under six months, global law firm Ashurst has launched its first digital offering to help funds, banks and other financial services firms navigate this complex and evolving regulation to ensure readiness and compliance in advance of the regulation coming into force.
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The sweeping EU regulation covering environment, social and governance (ESG) disclosures in the financial services sector will come into force in March 2021.
The EU Sustainable Finance Disclosure Regulation mandates certain financial institutions to clarify the categorisation of their green products and services in the most detailed set of obligations to date.
ESG Ready, cloud-based digital legal advice product will draw Ashurst’s expertise into an easy-to-use tool applying sophisticated decision logic to classify organisations under the new regulation and generate customised trackers that enable transparent monitoring and compliance.
It is the first digital product offering for Ashurst, and was developed collaboratively by the firm’s NewLaw technology arm Ashurst Advance’s Digital and financial regulation and ESG/sustainability legal experts.
“The impact of the new EU Sustainable Finance Disclosure Regulation is ambitious and far-reaching,” Lorraine Johnston, counsel in the financial regulatory team and product originator said.
“It captures a large range of financial services and listed firms doing business in the EU regardless of where they are based.
“They need to know whether they fall into the scope of the regulations and therefore the implications this will have on their business.
“The price for getting implementation wrong can be high – regulatory action, action for mis-selling by customers and reputational damage from accusations of ‘greenwashing’ are just some possible consequences so it is imperative all businesses are ESG Ready come March next year.”
Ashurst said that its regulatory content will be updated by the firm’s financial regulatory team as new guidance is published and automatically synced to the platform, ensuring users are up to date with any changes or developments in legislation.
Not only in the EU, but ESG issues are set to play an important role in Australia.
Simon O'Connor, CEO at the Responsible Investment Association Australasia (RIAA) said that the demand for responsible ESG investing in the financial services has reached an accelerating pace, with RIAA research showing over 90 per cent of Australians expect their savings to be invested both responsibly and ethically.
Mr O'Connor said that in what may surprise some observers of the rough markets in 2020, COVID has put a rocket under the sustainable and responsible investment market, “providing its greatest test to date, and showing that it has delivered on returns, on flows, through targeting more sustainable companies.”
Anna-Marie Slot, global environmental, social and governance partner added that ESG issues have long been on the agenda but COVID-19 has further complicated matters.
“While many businesses have been increasingly integrating ESG and sustainability considerations into their risk analysis, the need to prioritise the response to the pandemic would mean that for some, they are not as advanced in their preparations for the new EU requirements as they may have intended,” she said.
“ESG Ready comes at the perfect time for those who need to understand what obligations are applicable to them so that they can be prepared. This is a strategically important regulatory change project and will be a focus shift for the financial services industry, so we’re excited to be able to deliver a solution that will smooth this process for our clients.”
Tara Waters, head of Ashurst Advance Digital added that as this was Ashurst’s first digital product, the firm was delighted about the way in which ESG Ready has come together.
“It’s also a methodology that we can replicate for regulatory change implementation projects across every area – we’ve built more than a single product; we’ve developed the framework for a multitude of future products to come,” Ms Waters said.
“It is the perfect first example of what we established Ashurst Advance Digital to achieve – intrapreneurship which has sparked the development of a scalable digital product that perfectly marries our technology capability with our legal expertise to deliver new and better solutions for the most critical problems our clients are facing.”
