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Sustainability: Towards net zero

Sustainability: Towards net zero

By Karin Derkley

Environment Environmental Protection Practice Management 

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Law firms are seeing the business benefits of playing a greater role in addressing the threat of climate change.

Law firms are increasingly committing to carbon neutral status as part of a growing acknowledgment by the profession that they need to play a bigger role in addressing the threat of climate change. 

Gadens recently announced it will achieve certified carbon neutral status within the next 12 months, with the aim of reaching net zero by 2030. Other firms that say they are carbon neutral or on the way towards carbon neutrality include Minter Ellison, Lander & Rogers, Clayton Utz, Gilbert + Tobin and Herbert Smith Freehills (HSF). 

Gadens head of sustainability and social impact Sophie McNamara says this target is important to its staff and clients. “It’s just a business necessity. Everyone should be doing it,” she says.

Gilbert + Tobin was certified as carbon neutral in 2018 by Climate Active, a partnership between the Australian government and businesses that provides carbon neutral certification. 

“It was the right thing to do,” says Gilbert + Tobin head of corporate social responsibility Eloise Schnierer. “We accept the science of climate change and we accept that there is a need to reduce emissions. And (becoming carbon neutral) was one of the ways that would be possible.”

Lander and Rogers CEO Genevieve Collins says her firm has set “ambitious targets” to be carbon neutral by 2022 and net zero by 2025. It too uses Climate Active for its certification and auditing. 

Ms Collins says the firm was responding to the concerns expressed by its people. “We did a survey on environmental sustainability a few years ago, and the response was overwhelming. Plus, it’s something our clients are concerned about, so it should be given priority.” 

HSF says it is committed to a goal of net zero emissions by 2030 by reducing overall emissions, ensuring at least half of its suppliers (by spend) have targets for reducing their emissions, offsetting remaining carbon emissions up to 2026 and removing emissions beyond that date.

“Achieving net-zero carbon will be good for our business, our clients, our people and our planet,” a spokesperson for the firm says. The firm is a member of the Net Zero Lawyers Alliance and part of the working group of the Australian Institute of Company Directors new Climate Governance Initiative.

These firms are members, along with a total of 40 top and medium tier firms, of the Australian Legal Sector Alliance (AusLSA), a collaboration of law firms that aims to improve their business sustainability across a range of measures.

AusLSA CEO Richard Jennings says a survey in May this year found an “overwhelming percentage” of law firms said they were either well underway in terms of developing their climate commitment, or had it on their work plan for this year. 

“The urgency of climate change as a global and as a national issue and the importance to law firms is really ramping up,” he says. 

Member firms have to report on their achievements towards this end each year. Since the organisation started collecting data, firms have reduced their office emissions by around 57 per cent, Mr Jennings says. 

MinterEllison head of climate risk governance Sarah Barker says finding sustainable ways of working is one of the core pillars of the firm’s environment, social and governance (ESG) practice. The firm’s targets extend beyond carbon emissions to active work across all areas of sustainability, linking with its social policy and our reconciliation action plan, Ms Barker says.

“The ESG team works across all the industry groups and practice groups to ensure our advice takes those issues into account through a commercial law lens. The firm follows the philosophy of first reducing emissions, and then offsets only to the extent that emissions can’t be reduced in the first instance.” 

Clayton Utz partner Brendan Bateman says his firm has been progressively reducing its emissions via a number of initiatives over the past few years, offsetting any remaining emissions through a suite of projects. 

“The firm has always had a very strong ethos around corporate social responsibility and the engagement in climate change emissions reduction and carbon offsetting is very much a part of that. It’s seen as our obligation to reduce our impact on the environment and engage our staff in a way which enables them to reduce their own impact both at work and also personally.” 

Firms have reduced their carbon emissions by installing energy-efficient lighting and computer equipment, cutting back on paper usage (on the basis that every ton of paper generates nine tons of carbon emissions) and buying renewable energy.

But while energy usage by law firms has dropped dramatically over the past few years as a result of technological innovations and behavioural change, the contribution of business travel to emissions remained stubbornly high prior to COVID-19, Mr Jennings says. 

“Zoom calls and teleconferencing didn’t displace air travel and hotel use over the past 10 years.” Demand for business travel had in fact increased and would have likely continued to do so if COVID-19 had not intervened and forced people to find new ways to meet and collaborate, he says.

That demonstrated how rapidly things can change when there is an imperative to do so, Mr Jennings points out. “A whole lot of problems people saw with doing business virtually suddenly got addressed. People came up with solutions because they were forced to.”

Whether business travel will bounce back to the same extent post pandemic is difficult to say, he says. “With the issues of climate emissions from travel, people may say: do we really need to go back to operating as before?”

Given the relatively small proportion of carbon emissions produced by the professional services sector, some question how much of a difference a reduction in emissions by law firms can achieve. But even if law firms are not the biggest contributors to carbon emissions, that does not mean they shouldn’t be part of the solution, Ms Barker says. 

“The position we take at Minters is that while our own contribution to emissions might not be material in the broader scheme of the economy that doesn’t mean that we shouldn’t do our bit. We see it as an important part of the broader transition of the global economy to net zero that we are playing our part in that transition.” 

Some law firms are also coming around to the belief that they have a role to play in advising their clients of the business risks they may be incurring by persisting in activities that exacerbate climate change. 

“Essentially as lawyers we are risk advisers, and we work with our clients to identify and manage risks,” Ms Barker says. “Climate change has evolved to be a material financial risk, and as such it presents issues across the entirety of commercial law. This is not about ideology or values. This is about lawyers being an integral part of the risk management framework in place, for government and corporate clients.”

Mr Bateman says law firms have an obligation to at least make clients aware of the possible risks if they don’t address their carbon emissions. Those risks include the physical effects of climate change on that business, but also the risks of losing access to finance.

“Banks are actively seeking to reduce their exposure to the fossil fuel sector. They’re setting emissions targets for themselves in terms of how much of their loan portfolio is invested in particular sectors and looking to reduce the carbon intensity of their own portfolio,” he says.

Law firms can also play a role as moral and ethical leaders when it comes to dealing with climate change, says Mr Jennings. “One of the things about law firms is that they see themselves as leaders for the business community. There’s a culture in the legal fraternity about ethics, and morality and justice, and action around climate change is a pivotal one about the kind of morality and ethics that drives the practice of law.” 

Australasian Centre for Corporate Responsibility executive director Brynn O’Brien goes further to argue that law firms should actively distance themselves from clients who contribute to climate change. “In 2021, committing to net zero in terms of your energy procurement and your supply chain is absolutely basic minimum standard. Until law firms stop facilitating the extension of the fossil fuels industry their commitments will have negligible impact.” 

Ms O’Brien says the legal dimensions of climate risk within corporate law have become well established, and the risk of litigation across the Australian corporate landscape is increasing exponentially. “Law firms absolutely do have an obligation to advise clients on those risks and on the potential liability if they fail to manage those risks.”

“Risk management is at the centre of what all companies need – and climate is an exploding risk”, Mr Jennings says. “Managing that from a legal perspective and a governance perspective is really important, so that’s where lawyers can play a part”.

Not engaging with climate change is potentially a dereliction of duty from a business continuity and sustainability point of view, Mr Bateman says. “If a company is going to have a future, it needs to deal with the fact that the climate is changing, and that business as usual is not an option.” 

Law firms are increasingly prepared to look more closely at the sort of clients they take on, says Ms Collins. “We’re not bound by the cab rank rule like barristers and if the behaviours of clients are extreme there may be some consideration about whether they would take them on as clients, not just in the environment area but in all sorts of other areas too.” 

However, Ms Collins believes that most Australian organisations now want to reduce their carbon footprint. “I think that’s just reality now. They’ve got to have their own social licence to operate and I think many of the large carbon emitters are making considerable inroads into reducing their carbon footprint.” 

Law firms can also play an active role in helping their clients transform to a post-climate change economy, says Mr Jennings. “There are not too many large clients that aren’t currently thinking about what their role is in that transformation.” 

“There will be law firms that see themselves playing a really material part in actually leading that economy and helping bring their clients along,” he says. “The most lucrative work will be in leading that change and working with people who want to lead that change.”

Companies that reduce their emissions will have the opportunity to actually get ahead of the curve to take advantage of the opportunities that are being presented by a low emissions economy, says Mr Bateman.

Another important rationale for tackling climate change within a firm is to make it more appealing for staff recruitment and retention purposes. “This is something people are now looking for in an employer,” Ms McNamara says. “To get the best talent from universities, this is going to be something firms have to do to compete.” 

At Lander & Rogers, Ms Collins says the firm’s commitment to addressing climate change is brought up regularly by prospective employees in recruitment drives. “People are saying, we’re really interested in what you’re doing in the environment, and we want to work for an organisation that shares our values.”

While addressing climate change may be easier for large firms with the resources to do so, firms of any size can start taking steps to reduce their own carbon footprint, Ms McNamara says. “It’s not as hard as you think. The important thing is to just start and don’t worry about doing it perfectly. You can tinker with it as you go along.” ■

What does it mean?

Carbon neutral - when a company’s carbon emissions are reduced to the point that they can be completely offset by buying carbon credits or investing in carbon reducing projects.

Net zero – a process by which carbon dioxide is removed from the atmosphere through reforestation, sequestering carbon dioxide in soil, or using technologies to draw carbon dioxide from the air.

Australian Legal Sector Alliance (AusLSA) – an independent not-for profit association of 40 Australian law firms, strategic partners and key stakeholders that is working to promote and increase sustainable practices, including environmental practices, across the legal sector in Australia.

Climate Active – a partnership between the Australian government and Australian businesses that provides standards and certification of carbon neutrality

 

genevieve collins

sarah barker

Brendan Bateman

Eloise Schnierer

Sophie McNamara

 


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