How GCs can steer a business’ ESG framework
In an ever-shifting ESG landscape, general counsel could become the nucleus of their organisation by embedding core principles into their business, a law firm said.
Corrs Chambers Westgarth head of business and ESG (environmental, social, governance) Dr Phoebe Wynn-Pope told Lawyers Weekly that GCs could play a critical role in their organisation by identifying and building those ESG principles and designing a framework into the organisational strategy.
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“Because things are shifting so much, it’s really important for organisations to think about what their ESG principles are and establish strategies into the organisation so it becomes part of business as usual,” Dr Wynn-Pope said.
“I think if organisations are constantly looking for the latest trends in ESG or the latest reporting requirements, it’s very hard to keep up and it’s very hard to come up with a cohesive response.
“I think this presents a great opportunity for GCs to be the hub for the spokes of ESG across the business, to put all of that together and ensure that the type of reporting that’s done (particularly in listed companies) and sent to market accurately reflects both the aims and goals of the business, and outlines what’s being done to implement them across the different functions.”
The next step is for GCs to build a regular ESG review across the business to ensure that it is meeting the different and changing regulatory and legal as well as voluntary requirements.
“Because they change so much, it’s not a set-and-forget process,” Dr Wynn-Pope said.
“It’s definitely a process of continuous improvement, and constantly monitoring and evaluating how that looks.”
These are some of the issues Dr Wynn-Pope will discuss at the upcoming 2022 Corporate Counsel Summit in Sydney, while also providing insight into how GCs could develop an ESG framework across their organisation that meets global reporting standards, mitigates risk of greenwashing, and maximises opportunities.
In addition, as ESG factors increasingly intersect in the operation of businesses and risks of litigation and exposure increase, she will outline how GCs and law departments could support and lead their business in implementing changes and championing ESG factors internally and externally.
Managing and minimising risks
Dr Wynn-Pope said GCs also have a critical role to play in managing risk and implementing strategies for minimising client risk and exposure associated with ESG issues.
She said organisations might address one risk without considering other risks that might arise as a result. This is particularly prevalent in ESG issues, where risks are integrated and intertwined.
For example, corruption and climate change, which fall under governance and the environment, respectively, could have significant human rights consequences.
“If we’re thinking about trying to address our carbon footprint for example and move to renewable energy, we could be using a lot of solar energy,” Dr Wynn-Pope explained.
“What we know is a lot of the components in solar panels come from a region that is known to have very high levels of forced labour. So, while we might be addressing our carbon footprint on the one hand, we could inevitably increase our modern slavery risk on the other if we’re going to renewable solar energy.
“So, how an organisation and GCs think about managing and reporting on these things becomes very important.”
As such, frequent ESG reviews are critical as these functions often operate in different sections of a business.
“That’s where the GC who has a view across the whole business can play a really important role in bringing it all together, and thinking about those cross-functional risks, or what we call unintended consequences,” Dr Wynn-Pope concluded.
To hear more from Dr Phoebe Wynn-Pope about how GCs can lead change in developing an ESG framework for their business and support businesses amid growing social and regulatory pressure, come along to the 2022 Corporate Counsel Summit.
Tickets are selling out fast, so click here to secure your spot today!
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