Law firms are under ever-increasing pressure to develop sustainability programs and to report on their sustainability practices. More than any other area, law firms are driven to measure, manage, and report their GHG emissions.
Drivers of the Pressure on Firms
Employees. Essentially all the value of a law firm lies in the brains of its people. Firms engage in fierce battles for talent. Young talent entering the workforce are deeply concerned about the state of the world. According to a 2022 Deloitte survey, one of Gen Zs and millennials' top employment concerns is climate change. Almost half of Gen Zs (48%) and millennials (43%) have pressured their employer to take climate action. In 2020, Law Students for Climate Accountability was established out of Yale Law School to push the legal industry ‘to reckon with its role in the climate crisis’. Since then, the group has issued report cards for each large law firm on its climate impacts. The Law Students have also organized protests at recruiting events for failing firms. In turn, taking a firm climate stance is key to attracting the best talent, reducing turnover rates, and improving employee satisfaction.
Clients. Firms are being asked to report to CDP and judged on their sustainability performance in RFPs. The pressure is increasing.
Walking the walk. The demand for legal services to support clients’ ESG reporting needs is growing. At the same time, new law firm ESG practices seem to be emerging every week. The competition is significant. Law firms need to demonstrate their sustainability expertise, not only through their client presentations but also through their actions.
Measuring and Managing GHG Emissions
Firms currently use a variety of approaches to measure their GHG emissions. Some rely on internal calculations, which generally are high-level estimates. Some work with consultants who gather data every year on spreadsheets. Others have begun using carbon accounting software solutions. Using the crawl, walk, run approach, we present opportunities for law firms just beginning or planning to mature their carbon accounting journey with software. For many firms, the move toward software is driven by the need for cost predictability. Others want to collect their data in a manner that enables them to compare their data year over year, and to manage their performance against their reduction goals. Others use software because their clients ask them to so they can more easily share their data. Whatever the drivers, the clear direction of travel is toward increasing the use of software to facilitate the climate reporting process.
Crawl: Data Gathering Efficiently
To start, it’s important that sustainability and ESG efforts are not siloed within the sustainability team. Much of the data needed for calculating GHG emissions is naturally cross-departmental, sitting within the operations, travel, procurement, technology, and other teams. For sustainability efforts to be truly successful, having the ability to coordinate across departments and functions is critical.
Transitioning data collection to a centralized, cloud-based platform can begin to solve a number of data-gathering challenges. While the traditional methods of manually collecting data in a spreadsheet do work for high-level estimates, using software to obtain more accurate information, automate data ingestion, and track and assign data collection responsibilities across departments is an opportunity to reduce the time and resources required to build your GHG inventory. Also, software offers the ability to show analytical dashboards to firm leadership for better oversight and engagement on climate activities.
Emissions profile of Law Firms
Walk: Accurately Calculating and Reporting Emissions
Law firms are at various stages of calculating and reporting GHG emissions. Many firms calculate and report their emissions through sustainability reports and CDP responses. Many also respond on an ad-hoc basis to client information requests. These pressures can strain internal resources. Moreover, internal teams frequently are not equipped with the information necessary to address the complexity of carbon accounting. Software allows law firms to calculate their carbon footprint with confidence in the calculations.
Run: Transparent and Auditable GHG Data Assurance Capabilities
Increasingly, companies and law firms' data will be scrutinized. The gold standard of reporting includes calculating scopes 1, 2, and 3 GHG emissions and having the scopes 1 and 2 data assured at least at the limited assurance level. Having the ability to see all the data that contribute to your footprint in a carbon ledger enables that level of transparency and auditability.
Though carbon accounting can feel like a complex process for a law firm, software can make it feel simpler. We recommend a firm start by identifying its material emission sources and then building internal systems to make that data collection much easier. The time is now to mature a law firm’s carbon accounting processes.
For an inside perspective from Gayatri Joshi, previous Director of the Law Firm Sustainability Network, and current Co-Founder and Partner of Vorgate Legal ESG Impact, and Persefonites Mike Galeski, Anissa Vasquez and Kristina Wyatt (formerly of Latham & Watkins LLP), view our on-demand webinar ‘Law Firm Reflection: Opportunities in Carbon Accounting, Avoiding Pitfalls, & COP27 Takeaways and Trends that Matter for Reporting’ below.