A review of the Law Society’s recent guidance on the impact of climate change on solicitors, including eight practical tips and advice on how to immediately implement the Law Society's recommendations.
What is the Law Society’s climate change guidance?
On 19 April 2023, the Law Society published an almost 30-page document with detailed guidance on how law firms and solicitors can incorporate awareness of climate change and the associated risks and opportunities into their business operations and the advice and work they provide for their clients.
The guidance is intended for all members of the Law Society: individual solicitors, in-house counsel, law firms, and regulated foreign lawyers. The scope is therefore far-reaching and will affect tens of thousands of firms and hundreds of thousands of legal professionals for decades to come.
The guidance helps solicitors provide advice and representation on any type of matter in a way that considers the resulting impact on the climate crisis (and vice versa) and is compatible with their professional duties and the administration of justice. The aim is to guide law firms toward operating and offering their services in a more climate-conscious way.
Firms would do well to fully embrace the Law Society’s advice and recommendations and take steps to implement the guidance immediately.
To remain competitive and current in a rapidly evolving legal services market, where climate-related issues are increasingly at the forefront of clients’ minds, law firms will need to be equipped with the skills and knowledge to properly advise on climate risks and opportunities.
Firms must also make demonstrable and verifiable commitments to practise law more sustainably and endeavour to monitor and reduce their carbon footprint and emissions.
What does the guidance say?
Part A of the guidance broadly addresses how law firms can understand and monitor their greenhouse gas (GHG) emissions and set science-based targets to reduce them. It also guides firms on complying with disclosure and reporting obligations and how to reduce their advised emissions. It warns of the need to avoid greenwashing and the importance of making accurate and verifiable sustainability claims.
The guidance in Part A is underpinned by the Paris Agreement's goal to keep global warming increases to no more than 1.5 degrees Celsius above pre-industrial levels.
Achieving this target requires steep emissions reductions by 2030 and net zero emissions by 2050 (i.e., the reduction of GHG emissions by 100% from their 1990 levels).
The guidance makes clear that law firms will need to play their part in the transition to net zero.
Part B of the guidance focuses on the physical and legal climate risks facing solicitors and their clients and explains why solicitors need to be aware of and prepared to consider and advise on these risks to comply with their duty of care, duty to warn, and duty to disclose to their clients.
It also explores in detail how the SRA principles and code of conduct apply in the context of climate change.
Importantly, the guidance states that solicitors could refuse to act for clients where to do so would conflict with their climate-related goals, commitments and targets.
What does the guidance mean for the legal sector?
The guidance is a blueprint for law firms to design their practice, operations, and the services and value they offer their clients around the need to address and respond to the climate crisis.
It is clear that law firms need to make huge cultural transformations in training and knowledge, marketing and business development, and general management and decision-making to achieve the outcomes envisaged by the guidance.
Climate-related issues and commitments will need to be woven into each strand of a law firm’s business model and occupy a central role in senior decision-making with equal importance to financial considerations.
The guidance presents additional opportunities for smaller law firms to scale and grow their business in a climate-conscious way and obtain a competitive edge in the market.
Many small firms that are not currently subject to any climate disclosure or reporting obligations will be able to get ahead of the curve and utilise the tools and resources provided by the Law Society to engage in voluntary disclosure and target-setting.
How should law firms implement the guidance?
The guidance provides useful advice to solicitors and this article goes a step further by suggesting some immediately actionable steps and adaptations to help law firms meet the challenges posed by climate change.
Monitoring greenhouse gas emissions and setting science-based targets
Law firms need to understand and measure the GHG emissions generated by their business operations. Firms must measure their scope 1, 2, and 3 emissions, with scope 3 emissions likely to be the biggest risk area (i.e., indirect emissions relating to a firm’s value chain including those generated by business travel, stationery, catering, etc.). Firms should use approved scientific methods to set effective and realistic targets that align with the Paris Agreement’s goals.
The Law Society suggests that larger firms hire consultants and technical experts to help them accurately measure and set targets to reduce GHG emissions.
Free emissions measurement toolkits and resources – such as those provided by the Legal Sustainability Alliance – are recommended for smaller organisations.
The guidance advises firms to use the Science Based Targets Initiative (SBTi) and the 1.5C Business Playbook to validate and guide their targets and net zero commitments. The SME Climate Hub is also recommended as a tool for smaller firms.
It will gradually become the norm for all law firms, including small and medium-sized firms, to publish detailed and transparent information on the climate impact of their activities and their progress on reducing GHG emissions (including in the form of annual sustainability reports).
Clients, potential hires, and investors are likely to consider this information when deciding whether to work with a particular firm.
Practical Tip No. 1: Publish a brief statement now on your website that outlines your firm's commitment to measure current GHG emissions and set science-based targets for future emissions reductions. This will show that you are taking the guidance seriously and proactively taking steps to implement it.
Law firms should follow up with concrete action to set targets for the reduction of GHG emissions.
This will require considerable cultural and behavioural change across all areas of the business.
Practical Tip No. 2: Make the following adaptations to achieve long-lasting cultural change and facilitate successful climate-related target setting:
Provide tailored training to each department on how emissions reduction targets will impact their work and operations. |
Develop an internal policy on compliance with the firm’s emissions targets, including how to report and address concerns about actions and behaviours that are inconsistent with achieving those targets. |
Integrate into existing decision-making structures and frameworks a compulsory analysis of the impact of a new project or strategy on compliance with the firm’s emissions targets and wider climate commitments. This step will require significant buy-in from senior managers. |
Getting to grips with climate risk disclosure frameworks
While not all law firms have a legal obligation to disclose their GHG emissions and other climate information, those who do commit to voluntary target-setting initiatives will need to engage in certain disclosure and reporting activities.
The Law Society recommends various voluntary and mandatory disclosure frameworks which also provide helpful guidance for the development, adoption, and communication of a firm’s climate targets. The Law Society advises that firms engage with these frameworks even if they are not compulsory.
Even firms that are not subject to any mandatory disclosure frameworks should become familiar with the various climate disclosure and reporting mechanisms to understand the type of information and data that is necessary for measuring and reducing GHG emissions.
Practical Tip No. 3: Invest in developing internal resources and knowledge on relevant climate disclosure and reporting frameworks, by creating guidance documents and training for staff members.
Even if your firm is not legally obliged to, start gathering the necessary information to comply with those disclosure requirements. This will help your firm set more realistic climate targets.
This advice is especially important for smaller and medium-sized firms, as understanding the information needed to comply with disclosure frameworks and set robust emissions targets now will enable them to grow and scale their business sustainably in the future.
Reducing advised emissions
Otherwise known as “scope 4”, “advised emissions” are all emissions associated with the matters on which solicitors advise, including transactions and disputes. Scope 4 emissions are those generated by a law firm's clients but to which the firm has indirectly contributed by advising or acting on a particular matter.
The Law Society suggests firms consider how they can influence the reduction of advised emissions in line with their own emissions target-setting. This can be achieved in several ways:
Understanding the climate-change-related strategy, goals, and transition plans of the firm and its clients to the same extent that they understand the legal, commercial, and financial position
Being aware of the climate-related risks and opportunities that typically present in a certain practice area.
Advising clients of relevant climate legal risks and opportunities associated with the transition to net zero.
Assisting clients who wish to reduce their emissions and engage in transition planning.
Considering whether instructions to advise or act on matters that are inconsistent with the firm's climate targets and goals should be accepted.
The last point is especially significant as it explicitly endorses a firm's ability to turn down client instructions where they conflict with its climate commitments, goals, and targets.
Practical Tip No. 4: Take the following action to work towards reducing your firm's advised emissions:
Integrate “climate awareness" into professional development and training programmes and in regular updates to legal teams in each practice area. This ensures lawyers understand the latest climate-related risks and issues involved in the matters they work on. “Climate awareness” will become the new “commercial awareness” for solicitors. |
Shift your business development strategies to target clients who are keen to contribute to the net zero transition and offer appropriate services to meet their specific needs. |
Adapt marketing content (articles, insight pieces, other website content, etc.) to climate-related topics. This is another opportunity to attract new clients and encourage existing clients to become more engaged and educated on these issues. |
Implementing the above steps should mitigate the need to refuse instructions or turn down work, as a firm's business development and marketing strategies will have transformed to target more climate-conscious clients who are seeking advice on how to reduce their emissions and environmental impact.
Avoiding greenwashing
Law firms should be aware of the Competition and Markets Authority’s Green Claims Code, which provides useful guidance on their obligations under consumer protection law concerning sustainability claims.
The Law Society recommends ensuring that marketing materials and communications are accurate by reference to verifiable science-based targets: to protect firms from inadvertent greenwashing.
Practical Tip No. 5: Provide adequate training and information to your marketing and communications teams on greenwashing and compliance with the Green Clams Code, to ensure they understand the implications of making inaccurate sustainability claims and communicate the firm’s climate credentials and commitments in an authentic and impactful way.
Balancing climate change risks with solicitors' duties and conduct
Solicitors need to be aware of the climate change risks faced by their clients: from physical risks posed to assets and projects (e.g., by extreme weather) to the various legal risks that arise from rapidly developing legislative and regulatory requirements. They must also be aware of shifting client expectations.
The Law Society guidance suggests that failing to inform and warn clients of climate legal risks may amount to a breach of solicitors’ professional duties.
Solicitors must be alert to how compliance with the SRA Principles of maintaining public trust and confidence in the profession and acting with integrity may be affected by climate-related legal risks.
The guidance recommends professional training to increase solicitors’ knowledge of climate legal risks so that they can maintain adequate levels of competency to advise clients on these matters.
Practical Tip No. 6: Invest in resources and training on climate-related legal developments and risks relevant to each practice area. Consider circulating educational materials - such as a regular internal newsletter or bulletin - with key climate change-related updates and news targeted to each department or practice area. This will ensure knowledge remains current and up to date.
Practical Tip No. 7: Develop “Climate Champions” within each team who can develop expertise and knowledge of climate change issues and act as points of contact for their colleagues. This will foster a culture of knowledge sharing within the firm.
Approaching client instructions and relationships
The guidance suggests that law firms should consider how to communicate - to current and prospective clients - their ability to advise on climate-related risks and assist clients in achieving reductions in their emissions and transition to net zero.
The Law Society refers to the need for in-house lawyers to be especially aware of climate-related risks due to their more “hands-on” role in business management and executive decision-making. The guidance recommends in-house counsel increase their knowledge of climate-related issues.
The increased exposure of in-house lawyers to climate-related risks and their need for education on relevant climate issues presents an exciting business development opportunity for law firms.
Practical Tip No. 8: Develop insightful educational resources, tools, and materials on key climate-related issues targeted to general counsel as part of your firm's business development and marketing strategies.
You can also offer ad-hoc support services to in-house lawyers in areas including target-setting, disclosure and reporting, and monitoring compliance with climate-related legislative requirements.
What does the future look like?
The Law Society guidance emphasises the need for legal professionals to increase their education and knowledge of climate change issues.
The Law Society has also announced that it will shortly publish further sector-specific guidance for each legal practice area to enable solicitors to properly advise clients on climate-related issues.
It is likely that we will also see other professional services associations follow in the Law Society's footsteps and issue their own climate change guidance to their members.
Green Path to Global provides research and writing services on issues relating to sustainability, ESG, and law. Contact us to find out how we can assist your firm in developing the necessary marketing and training content to implement the practical tips and guidance contained in this article.
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