ESG and the CLD
The sustainability landscape is expanding and becoming increasingly diverse, complex and risk laden. As the emphasis on ESG is now a business imperative across all sectors and types of companies, they need to respond by creating new roles within their organisation chart, reshaping some positions, or looking for external help.
Internally, the general counsel is often put in charge of the new task. The GC might have the liberty to create a dedicated team with new roles such as Chief Responsibility Officer (CRO) and Chief Sustainability Officer (CSO).
Positioned as the intersection of legal, compliance and risk management, legal departments need to take the lead in ensuring that the ESG factors are not overlooked in their businesses, making them answerable to the Board and other key stakeholders. The increasing importance of sustainability and ESG go hand in hand with the role of the corporate legal department.
As the guardian of the business with a deep understanding of risk and proactive mitigation, it is upon the CLD to lead the ESG strategy and guide the business through their efforts by
- effectively communicating the risk and opportunities of the ESG strategy
- developing ESG reporting and disclosure mechanisms
- Influencing the regulatory environment by sharing their experiences with regulators and developing ESG regulatory structure to have positive outcomes
Along with expectations of the Board from the legal department regarding the ESG strategy, it is hard to ignore the clear correlation between ESG and digitalisation journey of legal departments. Interestingly, the effect of ESG priorities on digitalisation is evident as ESG-related acceleration of digitalisation projects has enabled legal departments to identify and start additional digitalisation projects.
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