So, what does this mean for the in-house lawyer?
ESG is no longer a mere PR battlefield. It has matured into a central part of how organisations operate. Time was when it was sufficient for a business to say, “This is our ESG philosophy”. Today, those businesses are being asked, “OK great, but what are you actually doing and what impact is it having?”
Against this backdrop, our colleagues at RPC authored a whitepaper looking into the role of ESG, its ranking in corporate priorities and the implications for in-house lawyers.
ESG Evolve focuses on Consumer Brands and Retail sector. A great choice given that this industry’s messages are seen and heard by us all and the behaviour of its supply chains is under constant media scrutiny. And all this when, often, environmental, social or governance values are the key pillars of the brand proposition.
A framework looking for leadership
The ESG Evolve authors interviewed General Counsel and Sustainability Leads at wide-ranging businesses across the sector. They found that while in-house lawyers are increasingly tasked with overseeing ESG initiatives, their involvement often intensifies once disclosure or risk considerations arise, rather than at the earliest stages of programme design.
Similarly, in many organisations, ESG responsibilities are often overlayed onto existing roles, rather than forming the job description of a dedicated position. While formal structures are beginning to emerge through steering groups, ESG Leads and governance reviews, goodwill, many organisations still rely heavily on informal coordination and individual initiative.
This creates both gaps in ESG activity and duplication of effort. Interviewees told our authors stories of multiple teams having overlapping responsibilities and parallel interpretation of ESG regulations. Elsewhere, they learned that limited coordination and tracking mechanisms can create duplication, fragmented interpretation of regulatory requirements and uncertainty about the ownership of decisions.
Enter legal
Legal’s interest in the ESG landscape is obvious. Regulatory compliance, shareholder claims, class actions and challenges to green marketing campaigns were just some of the litigation risks cited by respondents. For many of them, the means for monitoring these risks are neither formal nor structured.
Compounding this is that legal is often expected to arrive late to the ESG party and, having had scant involvement in decisions, sign off on a locked-in message.
How legal tackles this will depend largely on how it’s perceived internally. How legal responds depends on how its role is positioned internally. In organisations where legal teams are closely integrated with sustainability and commercial functions, ESG risk is more likely to be considered early. Where engagement happens later in the process, legal teams often find themselves reviewing messaging that has already been operationally committed.
In other words, position yourself as a trusted business partner, not a blocker. For example, not only bring legal know-how to ESG meetings but also an understanding of opportunities and their commercial potential. And, as always, to communicate these in language that board members recognise.
The reporting minefield
Another challenge in this ever-changing environment is how outcomes of ESG initiatives are reported.
There’s a proliferation of reporting directives and regulatory bodies to keep track of and for organisations that operate in multiple jurisdictions, the task grows exponentially.
Duplication arises around which data is used to support which disclosures. In-house legal teams are then asked to approve submissions without knowing the veracity of the data being disclosed. Compounding this is the feeling among GCs that some GCs questioned whether the growing reporting burden always translates into meaningful change.
Nevertheless, regulators are looking to set examples and flex their muscles. This underlines the GCs' multi-faceted role as the organisation’s moral compass, legal adviser and strategic business partner.
Because we’re not talking about small change here. Under the Digital Markets, Competition and Consumers Act 2024 for example, The Competition and Markets Authority is now empowered to impose fines as high as 10% of global turnover for consumer protection breaches.
Unsurprising then that in-house legal teams are becoming more proactive in helping their organisations contribute to government consultations and shape the national ESG policy framework.
Internally, meanwhile, legal teams are updating their ESG incident response processes, with legal escalation, public messaging and stakeholder engagement increasingly prioritised.
GCs are aware that claims must be evidenced and decisions should be aligned with regulatory requirements. That’s why they treat ESG as a legal risk and apply a lawyer’s eyes to advertising claims, product labelling and investor briefings. The risks of unintended greenwashing are high and the consequences of false disclosures are legal as well as reputational.
Making it all meaningful
Despite these pressures, many organisations see ESG as an opportunity to sharpen strategic focus. The most advanced programmes are those where businesses have identified where they can make a meaningful contribution and aligned ESG priorities with core commercial strategy.
Choosing where – and where not – to deploy resources is the all-important first step of this journey. The organisation that has identified where and how it can make a real difference and embedded ESG into its strategy is well on the way to building resilience, credibility and competitive advantage.
Meanwhile, crafting and articulating an ESG narrative that chimes with the organisation’s workforce is the way to shape behaviour and decision-making in line with corporate strategy.
Beyond our own ESG activities, it’s also vital to collaborate with other organisations in our sector. This is necessary to show customers that we’re creating a single inter-connected system that works across an entire industry, not just a single business operation.
The ESG Evolve authors saw examples of this sector-wide cooperation in the consumer brands and retail sector and are convinced that similar collaboration is possible in other industries.
Seize the opportunity
Compliance, positive social impact and competitive edge. As an in-house lawyer, you are uniquely placed to drive your organisation’s strategy toward these interconnected goals.
As a policy shaper, you can push to be involved early in ESG decisions and influence corporate policy.
As a proactive risk manager and ethical steward, you’re equipped to help senior management align strategic decisions to the organisation’s values and risk appetite.
And as a policy connector and sector collaborator, you have the network that helps you anticipate change and shape industry-wide ESG frameworks.
ESG Evolve: for Consumer Brands & Retail is packed with insight from GCs, Heads of Legal and sustainability leaders on the realities of embedding ESG - what’s working, where challenges remain, and how priorities are shifting across governance, reporting and supply chains.
Checklists, top tips, horizon scanning pieces, blogs and case studies also combine to provide you with a practical toolkit for driving progress on ESG.
