Market research ESG insights for law firms

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Market research: ESG insights for law firms

Landmark Information Group commissioned an independent market research project to look at the significance of ESG for law firms and corporations, and the challenges they face in monitoring and measuring ESG performance.

We interviewed over 300 individuals – C-suite executives and directors from corporations, partners, department heads, fee earners in ESG and directors from legal practices from the UK and the US.

The increasing importance of ESG

Perhaps unsurprisingly given the prominence of ESG by several governments, including the UK and US where our respondents were based, 96% of corporations and 92% of law firms thought ESG was more important in their organisation than 12 months ago.

Should law firms be doing more?

82% of corporates believed law firms could be doing more regarding ESG assessments.

Perhaps realising this, 55% of law firms who said they received increased requests for ESG-related services acknowledged the need to improve the capabilities and resources required to provide such support.

ESG priorities

“Social” was the top concern, with 26% of corporates and 37% of law firms putting this aspect of ESG at the top of their list.

This was followed by “Environment” with 24% of corporates and 18% of law firms labelling it as their second concern.

Methods of measuring ESG performance

59% of the corporates across the UK and US are conducting manual calculations and reports on ESG performance.

Only 31% of both corporates and law firms currently use a single ESG measurement resource or online platform. This suggests an ongoing challenge in accessing consistent, accurate and timely content.

The biggest risks to organisations for poor ESG performance

43% of corporates were afraid of the impact on brand perception or brand value.

43% also feared financial penalties resulting from noncompliance with regulation.

ESG across the supply chain

72% of US corporates have undertaken an ESG assessment on their supply chain within the last 12 months compared to 68% in the UK.

55% of corporates would give poorly performing suppliers time to improve versus 72% of law firms.

Simon Boyle, Legal Director at Landmark Information said: “There is no surprise that ESG measurement is a complex area, yet it is rapidly increasing in importance as investors, stakeholders, lawyers, employees, suppliers and even end customers are demanding information relating to organisations’ achievements and actions under ESG.

“Our ESG market survey not only considers the pressures facing both UK and US-based corporates and law firms into managing and measuring ESG performance and risk, but really looks into the main drivers and benefits from assessing ESG. While corporates and law firms agree that ESG has escalated in priority, appeasing shareholders or investors appears to be the main concern overall. Despite the perceived complexity, difficulties in accessing consistent data and the time-consuming nature of the task were cited as significant challenges.

“It is becoming increasingly clear that corporates are looking for support or guidance on ESG. But only a third of law firms overall said that they could actually service this demand whilst more than half believe that they need to build their capabilities or resources in order to serve this suitably well for their corporate clients. This shows that when it comes to ESG many law firms have a lot of potential to meet the new needs of their clients.”

To read the full ESG Market Research Report and see for yourself how perceptions on ESG priorities and risks are shaping the behaviour of corporations and law firms across the UK and US, download the latest edition of Landmark’s ESG Market Research Report at: https://go.landmark.co.uk/esg-research-report. ■