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How can ESG be authentically and effectively implemented?

Given the significant increase in attention on environmental, social and governance (ESG) by corporate Australia in recent times, it is necessary to ensure that such implemented initiatives are fit for purpose and meaningful, argues one BigLaw partner. 

user iconJess Feyder 01 September 2022 Big Law
How can ESG be authentically and effectively implemented?
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In a recent episode of The Lawyers Weekly Show, Madison Marcus partner and division leader of sustainability and ESG and banking and finance Eric Boone (pictured) discussed his experience of working with clients to implement ESG. He deeply considers what is necessary for meaningful ESG to be taken up by businesses — in ways that do not put them at risk. 

There has been a significant shift in corporate focus on ESG in recent years, Mr Boone explained, as awareness has grown about the need for particular societal and environmental changes. 

The authentic and effective implementation of ESG is essential, he said, both to assure societal change and to protect businesses from implications brought by environmental, social and regulatory bodies. 


Mr Boone has advised medium to large businesses in their implementation of ESG — working with their policies, procedures, reports, and obligations, as well as with their procurement teams. He has also worked with them on corporate governance and on their board composition. 

The whole idea of ESG is that businesses must give information to consumers, clients, those along their supply chain, funding sources and boards — so that all are able to make informed decisions about whether they engage with businesses, said Mr Boone

Mr Boone understands ESG from both an activist side and a commercial side, meaning he keeps commercial pragmatism in mind and considers the larger economic forces at play, whilst remaining deeply motivated to bring about substantial change on key issues. 

His mindset allows him to strike a balance — envisioning how necessary change can be created in a way that businesses will be willing to implement — he noted that there are often competing interests when implementing ESG.  

Key questions guide him in his thinking when he advises clients: “How do I get them to not push away from it, but to lean in? How do I get them to understand? 

“How do I get them to embed it into their culture? How do I make this a part of their culture and not something that’s foreign to them?

“We have to learn how to use the right tonality for the investment groups. 

“How do we give them standardised language, yet that’s something that’s bespoke to the company and specific to the company that will resonate with investors and stakeholders?”

It is also important to see how their sustainability report will fit into their annual report; you want to make things seem familiar to their audience, noted Mr Boone

He is also attentive to the ways that ESG measures have to merge cohesively with the business, such as fitting it in with their finance, their lenders, their funding sources, and their recruitment. 

You look at the larger breadth of a firm when you are looking at these issues, said Mr Boon, “and there are so many touchpoints”.

For instance, considering Millennials as a stakeholder group — they are so incredibly concerned about working for the right company, said Mr Boone

Mr Boone also noted that his background as a securities lawyer has him consider the importance of veracity in making ESG claims.  

“I have this thought process in my mind constantly of making these verifiable statements,” he said.  

“With everybody becoming increasingly aware of the risk associated with not having policy and procedures, or having policy and procedures that are not true, you need to have one that’s going to really seek to assess, identify, and mitigate your risk.

“There is that need to be careful in the language that we use to really describe what our remedial actions are in respect of reporting ESG risks like modern slavery or sexual harassment.

“What do we have in the way of backup? What do we have in the way of third-party independent reports to back up our industry comments or to back up our metrics on how we’re measuring the efficacy of our modern slavery mitigation plan?”

This matter veers off the back of sustainability reporting and increasing observance of claims of greenwashing — where people are making inaccurate, misleading claims about the work that they’re doing, he said.

There is a risk for companies to make unverifiable claims, due to increased liability associated with false and misleading ESG statements. 

“You need to make verifiable and accurate comments that do not increase the liability of your directors,” he said.

“When the Modern Slavery Act first came into play, so many people wanted to say they had a zero-tolerance approach to modern slavery, which is just not possible.

“We all have modern slavery risk within our personal footprints, let alone a huge corporate footprint. So, the whole idea of having a zero-tolerance approach is not correct.

“We saw litigation coming out of the US associated with the MeToo movement where people say they had a zero-tolerance approach on sexual harassment, and we all know that, unfortunately, people actually have more tolerance for sexual harassment than they care to admit, and that led to a lot of litigation.

“People need to really make sure that their policies, their procedures are veracious and are coming out in the work that they do.

“I’m not in any way saying that there should not be this hard-line strict approach against it. No, by all means, but be veracious about your approach and your remedial course of action.” 

For instance, the Modern Slavery Act, some people have criticised it for saying, “look, it’s not punitive enough. It doesn’t have civil or criminal penalties associated with it.” But there’s a transparency approach that underlies the Modern Slavery Act, he said. Such an approach carries weight in the effectiveness of the strategy. 

He also noted that there is risk in increasing regulatory matters, because people shy away during times of economic uncertainty. 

There is a balance to keep in mind when introducing step-ups in regulation and in determining the extent of pressure to put on the corporate community, noted Mr Boone.