The Passle team were excited to attend PSMG’s recent annual conference focusing on the topic on every law firm’s lips right now: Environmental, Social, Governance. 

Keynote sessions from inspiring deep-thinkers in the ESG arena, including Dan Kayne (Aka the O-shaped professional, who joined us on the podcast last year), Alexander Rhodes and Pamela Cone, set the tone for thought-provoking workshops throughout the day covering the challenges, and opportunities currently facing firms as they get to grips with their own ESG strategies.

We were lucky enough to join ‘The Rise of ‘S’ in ESG’ hosted by Neil Pearson and Surjit Deuer of Mills & Reeve LLP. The session covered the firm’s own ESG journey, focusing on how they embedded the ‘Social’ strand of ESG into their strategy and shared the learnings, challenges and successes they’ve experienced along the way.

There were many thought-provoking themes emerging from the session, but here are our 8 key take-aways:

Kill CSR - A point that was backed by Alexander Rhodes in the conference's opening keynotes: traditional CSR needs to be terminated. CSR initiatives often exist in isolation and separate from the operations of a business, and has in the past been used to cover up or justify irresponsible business. The notion of corporate social responsibility needs to be reimagined with ESG values embedded throughout business operations and processes.  Skills-based initiatives can be much more valuable than volunteering or bake sales. Neil suggested that firm’s could leverage their wealth of expertise by lending those skills to organisations that could benefit the wider community. 

Do ‘good’ business - Clients want to associate with ‘good’ businesses. Procurement policies should be scrutinised through an ESG lens - systems, processes and governance need to be re-assessed. There are multiple external factors driving this change: investment risk is ESG assessed; Insurers consider ESG practices when pricing policies; and regulators are making changes in response to ESG demand. ESG factors now feature in all aspects of RFPs with firms expected to provide details and evidence of impact on ESG claims.

Take a stance - There is increasing pressure on firms to respond to political and societal changes - The invasion of Ukraine is just one recent example of this. Firms that stay silent on such matters are being called out: inaction or indifference is considered more damaging to a firm’s brand than having an opinion. According to Forbes, ‘corporate activism’ is increasingly prevalent: “Fuelled by the rise of social media, unprecedented brand transparency and a greater consumer emphasis on corporate integrity, ethics are weighed more heavily than ever.” 

Focus on the ‘How' - Most firms are now on board with the ‘why’ when it comes to developing an ESG strategy, but now need to understand the ‘how’.  Many firms are just starting out on their journey and navigating the challenges and opportunities ESG presents with a focus on how to measure ESG value and the social impact of that work. 

Consider the Triple Bottom Line - With more than 50% of businesses losing work due to poor or non-existing ESG practices, there is growing evidence of the economic impact of ESG on the bottom line. Dan Kayne referred to the triple bottom line - people, planet and profit  - a term coined by John Elkington over 25 years ago: “the triple bottom line is a sustainability framework that examines a company’s social, environment, and economic impact.”

Seek external expertise - Neil and Surjit shared how their firm had developed a new role, employing a dedicated Head of EDI, and how this role was critical to leading change within the organisation. In the afternoon panel discussion Ben Middleton, Head of Sales at Irwin Mitchell, echoed this point when he talked how they recently brought into the firm a Head of Responsible Business to support their efforts.

Leadership should set the tone - Neil shared how the firm had produced a video series featuring their people from all backgrounds to share their diverse experiences and ideas. He highlighted the importance of leadership in providing people with opportunities to share their unique experiences to create a more inclusive workplace - benefiting both the firm and their clients.

Collaboration is key - When asked, there appeared to be appetite in the room for cross-firm collaboration. Surjit shared how their firm’s work with advisors has helped develop their learning and called for greater collaboration to share best practice across the industry. 

What is clear, is that there is no better time for firm’s to get started on their ESG journey. By working together, there is real opportunity for the industry to drive positive societal change. As Pamela quite poignantly quoted during her closing remarks: “The cost of doing nothing is everything”.