At recent recruitment events, there has been a marked increase in attention on ESG, whether that takes the form of climate change, human rights or diversity and inclusion. Judging by the 700-strong attendee list at the recent Legal Cheek event our ESG team presented at (and the nigh on 100 LinkedIn requests I received thereafter), those looking to begin their professional careers are more interested than ever in this space and are asking lots of questions of would-be employers on what they are doing in response to the ESG megatrend, both in terms of their own operations and beyond.
From my perspective as a lawyer in this space it makes sense. ESG is as much a hot topic for our clients as us and is increasingly being viewed as a key, board-level commercial issue (trust me, I've drafted the board papers) and is driving a lot of questions.
So what does this mean for companies? At a high-level, two points stand out:
- First, it is clear that ESG can now impact them not only in a reputational and financial manner, but also in an operational one as regards their talent recruitment and retention. Those now joining the workforce, or having recently joined it, often have Values (with capital a V!) on topics falling under the ESG umbrella and want, expect and in some cases demand their employers to match those values.
- This ties in with the second point, which is corporate purpose. This topic has been particularly prominent through the COVID-19 pandemic and as people look to the future and "building back better". I have seen discussion of changing employee motivations being a driver of, and the business case for, corporate purpose. For instance, salary is no longer necessarily king as people instead look to ensure they are working for employers that allow them to make a difference to the world.
And while this may be all well and good in theory, what does it mean for companies practically? I think it means a few things:
- Companies need to engage with the ESG megatrend and work out where they stand on key issues within that. That could take the form of a 2050 net zero target, a stated position on respect for human rights or a goal for the number of female and ethnic-minority staff in management level positions (likely option D, all of the above).
- With that position in mind, they need to think hard about how they are going to achieve their aims. It is increasingly unacceptable to be seen in the public or investor eye to be saying one thing and doing another and to fail to adhere to public commitments.
- The goals, targets and commitments must be embedded throughout the organisation. ESG involves a range of tricky topics that require both time and effort to even begin to tackle. This means your organisation and everyone in it needs to be pulling as one. The exercise of embedding values involves its own task around ensuring you have the right corporate culture.
It is a lot to think about, let alone do but the time has come to engage on it or else risk losing out on current talent retention and future talent recruitment as Millennials and Gen Z take their Values, avocado toast and non-plastic straws elsewhere.
Law firms, especially large commercial law firms, are not an obvious source of employment for those who wish to make the world a better place.