The GC role in shifting the ESG agenda
It is worth revisiting Jerome’s words from our virtual roundtable, as representative of the PE investment world view and so significantly weighty: “Everyone on this call has a degree of responsibility which is significant: lots of people look up to you, and look to you, for direction or for stimulation”.
Shanika agreed: “I do think people who wear the hat of a General Counsel in organisations are really well positioned [to lead on ESG/impact] because of being in the boardroom, having an understanding of governance, having an understanding of how you have to exercise judgement on ethical issues and the trade offs involved, how to advise on what the trade off is and think about how you measure the appropriate risk-mitigated response on balance. That balance of judgement that we possess positions us quite well.”
“ESG considerations are changing our investment tactics…it’s crystallising concerns in the heads of most board members… and it is coming to the world of GCs”. Or maybe it has already come, judging by the GC reaction to Jerome’s comment. For Rachel, “Compared to two years ago, the time I spend talking about ESG matters in investor presentations has significantly increased, and in some cases is comparable to the time spent on some of our commercial topics. This is a direct consequence of investor sentiment and focus on this area.”
Demand for ESG credentials
Rachel's words encapsulate it all: “It’s becoming incredibly important to be really precise about what you're doing for it to be really meaningful - not merely performative - and measurable, credible, transparent and validated. Employees, investors, customers and partners are quite rightly increasingly focussed on actions that have driven meaningful change rather than rhetoric”.
The ESG challenge – it’s huge and it’s complex
One of the main challenges is that ESG is a large beast and Rachel’s summing up of that is worth repeating and pinning onto your GC office wall as a reminder that it’s not enough to be an ESG advocate – it requires thoughtful and sustained communication over a carefully constructed ecosystem of processes and structures: “To be able to drive change you've really got to start right from the top. Your intention and ambition needs to be reflected in your mission, vision and culture and then incorporated in your strategy and progress measured via KPIs. To effect change, both behavioural and practical changes need be put in place - you can't make the change just from a tick box exercise.”
Shanika expressed a similar view: “navigating ESG was previously being done in a fragmented way across the organisation. But it's complex and if you do it bottom up without a top level, top down strategy and integrity and understanding of ethics at its core, you find yourself in a quagmire of trade-offs and unable to navigate the trade-off between one purpose - which is our core purpose - and other ESG related factors.”
The creation of a dedicated role - Chief Impact Officer - was an interesting development described by Shanika: “We needed a distinct role to be created around impact. What enabled me as the GC at the time to take responsibility across the organisation of all of these things is a complex systems view across the whole organisation of what ‘good’ looks like, from risk management to people issues.”
"You have to put the ground work in, not everyone in your organisation will be in the same place. We spent a long time sharing information, educating our communities and ourselves about DEI, and then being really being clear about what we stand for as an organisation, and following through on what we have said.” (Rachel)
In other words, it’s not a ‘quick fix’, it takes sustained focus over a long period, and it requires collaboration, transparency and good communication.
Easy peasy, right?
With many thanks to all our virtual roundtable participants:
- Shanika Amarakesara, Chief Impact Officer, British Business Bank
- Lucy Beaumont, GC UK & Ireland, Unilever
- Andrew Garard, Group General Counsel & Director of Corporate Affairs, Meggitt PLC
- Rachel Jacobs, GC, Springer Nature
- Jerome Losson, Partner, BC Partners
- Kenny Robertson, Head of Legal, Outsourcing Technology & IP, RBS
We’ve established a LinkedIn members group - ‘The ESG Lab for GCs’ - for candid conversations and a nested series of drafting initiatives to encourage and support GCs to move forward on their ESG agenda in collaboration with others facing the same challenges. The name of the game will be practical steps and forward momentum focused on iterative and incremental progress.
If you are a GC and wish to participate, please follow this link or message Jane direct: https://www.linkedin.com/groups/9062214/
If you’re part of the executive team at a law firm and driving this change or leading this conversation and would like to have a chat please get in touch