The role of General Counsel in ESG has evolved over the past several years. As ESG has gained prominence legal departments have found themselves in advisory and oversight roles managing the associated risks. Morrison Foester and ALM Law.com’s annual “GC’s and ESG Survey” provide interesting insights into GCs’ ESG priorities and areas of focus, especially when viewed in the context of last year’s responses. Here are some key findings from the survey:
- “Though C-suite leaders make up the largest group steering ESG strategy, in-house legal departments and GCs are increasingly becoming more involved.
- Governance is regaining more attention in organizations.
- DEI and climate-change issues remain key factors among KPIs tied to executive pay.
- More organizations, almost one-quarter in 2024, are changing or not using the term ESG. Yet more than half say that they are not encountering ESG backlash.
- Confidence that organizations have a comprehensive ESG program fell significantly. But confidence is highest when organizations conduct materiality assessments that weigh priorities, goals, and risks.
- Far fewer companies, including those that are publicly held, provide ESG disclosures.
- Almost half, about double from the year before, say that their internal stakeholders do not know how to “own” ESG as part of the company culture”
These results are interesting and show a recalibration of ESG priorities. The focus is returning to governance issues after interest in environmental issues surged in 2023, with a plurality of respondents in 2024 ranking governance as their top ESG issue. Additionally, 52% of respondents indicated that ESG alignment is driving changes in strategic business decisions, up from 37% in 2023. These results appear to indicate that the core business functions of ESG are being prioritized over strict compliance functions. This is a positive change for the ESG field as more companies view ESG as central to strategy, rather than a compliance checkbox.
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