Scope 3 emissions are controversial but may be useful for big picture climate risk for manufacturers and retailers. However, when it comes to service sectors like legal, financial, and insurance, critics argue Scope 3 doesn’t tell the whole story. This has led to a push by some for professional service companies to adopt the concept of “advised emissions.” This is similar to “financed emissions” in financial services: “financed emissions” are emissions associated with projects funded by financial firms.
According to a recent white paper from Oxygen House:
“‘Advised Emissions’ refers to the indirect greenhouse gas emissions resulting from the advice and services provided by law firms to their clients.”
Oxygen House lists a series of purported benefits for law firms measuring advised emissions including recruitment and retention of talent, business development, and reputation management. Two primary methodologies for calculating advised emissions are outlined:
- Client level – the total scope emissions of a firm’s clients, either broken down by client or aggregated.
- Matter (transaction) level – the total emissions resulting from the outcome of a matter handled by a firm.
While a novel concept and something law firms are likely to start hearing about, I have concerns about how such a system might run afoul of lawyers’ professional ethics obligations. Clients’ emissions data could constitute confidential information and a law firm’s unilateral public disclosure of the information would likely violate attorney-client privilege or other client confidentiality requirements. Even if client names were omitted and the data aggregated, it is possible that the public could figure out client names associated with disclosed advised emissions. For some reason, Oxygen House doesn’t address this issue in their white paper. Advised emissions might be an interesting concept, but law firms and other advisors should proceed with much caution before moving forward.
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