Environmental, social and governance standards, known as ESG, constitute a fertile market for law firms. “Companies increasingly need support, so law firms play an important advisory role,” says the head of ESG innovation at Novisto, Marie-Josée Privyk. Overview.
“ESG standards fit really well with our trademark, which is “Shaping the Future,” says Marie-Christine Valois, associate attorney at Fasken. Many of us believe that ESG is the future. »
Various parties want to look good when it comes to ESG, explains Ms. Valois: boards of directors (BODs), companies and investors, particularly institutional ones, who want to invest in companies that disclose their ESG practices.
In recent years, many shareholders have asked to increase the presence of women on boards, to disclose action plans on climate change or to carry out an audit on racial equity.
Moreover, “boards of directors have a fiduciary duty to look into ESG issues and address them adequately, otherwise there is a legal risk,” recalls Ms. Privyk.
When it comes to ESG issues, Fasken helps its clients position themselves, in particular by providing them with training. On the other hand, it helps them prepare for the many imminent legislative changes, in Canada and internationally.
Domestically, the Combating Forced and Child Labor in Supply Chains Act, which comes into force in January, will affect thousands of Canadian businesses.
Climate change regulations will also require publicly traded companies to disclose the amount of direct and indirect (which includes suppliers) greenhouse gas emissions they produce. In Mr. Valois’ opinion, this will have a snowball effect on suppliers: their customers will demand good ESG practices from them.
“The fact that disclosure becomes mandatory makes it legal,” underlines Ms. Privyk.
When it comes to sustainable development, “law and legal remedies are increasingly important and effective tools for mobilizing businesses,” she continues.
And more disclosure means more risk of litigation, notes Mr. Valois, referring to the risks of accusation of greenwashing. “An ESG scandal can damage a brand. Clients look very closely at reputational risks and ask firms to help them. »
Ultimately, ESG standards even impact the way we collaborate at Fasken. “It forces us to work even more as a team,” says Marie-Christine Valois. As a large national firm, we have all the ingredients of ESG: we do labor law, environmental law, governance, we advise our clients on diversity, inclusion and human rights. person. We thought about how to provide effective service to customers while bringing together various expertise. »
