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COMMERCIAL AWARENESS: The Rise of 'Environmental, Social and Governance'

[Words and phrases in bold will be found in the Glossary at the end of the text]


One of the themes of our free web workshops in November is ‘Commercial Awareness: Standing out from the crowd’. If you haven’t signed up for it yet…….why not? But, seriously, commercial awareness is something all international law students, and lawyers, need in the 21st-century legal world. Here at Cambridge Legal English Academy, we understand this, and try to encourage you to develop it as much as you can.


‘Green’ issues and the issue of climate change have taken centre stage in recent years. In Europe, the ‘European Green Deal’, announced by the European Commission in December 2019, aims to make Europe ‘carbon-zero’ by 2050. Political policies and strategy around the globe seem to be increasingly driven by environmental and climate issues.


Of course, implementing these kinds of policies and strategies has economic and social effects. Businesses, as well as individuals, will have to change the way they operate. Any attempt to reduce our carbon footprint is going to have a financial and economic impact on companies around the world. This will present challenges, for sure.


However, it is not just businesses who will face these challenges. The legal world also faces them. And many law firms are already rising to the challenge. In September 2020, the Magic Circle law firm, Linklaters, hosted a virtual recruitment webinar to consider the rise in what is called ‘ESG’ – ‘Environmental, Social and Governance’. If you don’t know what this is, you need to.


The implementation of government policies to tackle environmental issues means more regulation at the national and supranational level. These affect businesses – including law firms themselves – in a big way. Businesses need to think about such issues as how their operation and processes must change. They must make risk assessments and also consider how all of this will affect their profitability. Businesses are no longer just seen as profit-making enterprises, but as guardians of nature. And, importantly, all of this affects people who wish to make investments in those businesses. There are now Environmental, Social and Governance ‘criteria’. These are a set of standards for a business’s operations. These allow investors to screen potential investments.


ESG is now highly important in relation to legal, business, and financial risk assessment. And law firms are rising to the challenge all of this presents. A recent [2020] survey undertaken by The Blended Capital Group found that there were around 50 law firms worldwide offering blended ESG services and advice. These firms included Magic Circle firms as well as other leading law firms. ESG is very much a growth area for law firms, as well as businesses, and it is likely to remain so during the rest of this decade and beyond.


Being aware of ESG, and how it may affect any law firm or business you may wish to join, is essential. Understanding this development, and perhaps thinking about how it will develop in the future, is at least advisable. And remember; law firms themselves will have to comply with regulations relating to green policy implementation. Having some idea of how ESG may affect any law firm or business you want to join, both now and in the future, would be a good interview tip.


And, if you want to know a little more about ‘commercial awareness’, why not sign up for one of our free web workshops on the topic. We would love to see you there.

Glossary:


to take centre stage – This means to be in a very important, and possibly the most important, position. An example might be:

The issue of the price of the goods the buyer wanted to purchase took centre stage in the negotiations.

to implement – This means to put some plan, arrangement, or law into effect.

The government has implemented new policies to deal with the rise in knife crime in London.

carbon footprint – This is the amount of carbon dioxide released into the atmosphere by, for example, a person or a business.


to rise to a challenge – This is an expression which means to accept a situation, to act and think positively in response to it, and succeed.


Magic Circle law firms - These are the five most prestigious, multi-national law firms with headquarters in the City of London. They are: Allen & Overy, Clifford Chance, Freshfields Bruckhaus Deringer, Linklaters, and Slaughter & May.


to tackle – In this context, it means to make determined efforts to deal with a problem.

supranational – This means to have power or influence which goes beyond national or state boundaries. For example, the European Union (EU) is a supranational organisation.

profitability – The degree to which a company or organisation makes a financial gain from its operations. Companies and enterprises exist to make a profit, and be profitable.

to screen – The verb ‘to screen’, in this context, means to test or analyse something in order to check its suitability for a particular purpose.

© Cambridge Legal English Academy 2020

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