With companies increasingly embracing sustainability, Victor Tettmar explains why in-house lawyers are well-placed to play a leading role

What does sustainable business have to do with lawyers? More than you might think. Bond Dickinson's new report 'Beyond Responsibility: The emerging role of legal counsel in sustainable business' brings together the views and experiences of more than 60 general counsel and senior in-house lawyers to assess how the growing emphasis on sustainable business practice presents opportunities and challenges for the legal function.

The rise of sustainability up the corporate agenda can be attributed to a wide array of factors. From stringent regulation and public scrutiny, to visionary leadership and customer preference, both 'carrot' and 'stick' have played a part in turning knowledge into action. As organisations choose a more strategic approach to environmental, social and governance issues, many are finding a route to competitive advantage – increasing efficiencies, strengthening resilience, attracting investment, retaining talent, fostering innovation and gaining trust. In the words of one of the lead participants in our study, Robert Ivens, head of legal at retail business Marks & Spencer: "I am of the absolute conviction that sustainability is inextricably linked to business performance." 

Sustainability plays out in different areas for different organisations. For some, the focus may be on corporate governance and resource security in the supply chain. For others it may be service or product innovation to meet future customer needs. For others still it may be ensuring a resilient, skilled and motivated workforce in the face of changing social norms. 

While perhaps not immediately obvious, all these endeavours have significant legal dimensions. Through ad-hoc advice, risk management roles and sometimes formalised programme remits, corporate sustainability is affecting the legal function: two thirds (66%) of respondents to our survey say the sustainable business agenda of their organisation has affected their own role, and/or the work of the legal team.

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Emerging roles for legal counsel

Where ambition for sustainable business meets ambition for strategic legal counsel, new opportunities emerge. In this context, our findings show that a significant proportion of GCs are adding value beyond a traditional legal role: proactive as well as reactive; holistic as well as legal; strategic as well as operational. Moreover, the unique skillset and position that lawyers have within a business is what enables them to contribute in ways that no one else can.

What follows are the principal themes to emerge from our substantial dialogue with in-house legal professionals, intended to offer a useful starting point for how lawyers can look to engage with sustainable business.

Lawyers are approaching sustainability first as an organisational risk factor. This begins with the compliance and legal risks associated with new business practices. For many, however, it extends beyond compliance to protecting the broader interests of the organisation, its brand, reputation and stakeholders, to safeguard competitiveness in the long term.

As one senior in-house lawyer from the renewable energy sector comments: "People want to make promises; they want the community to embrace the projects so they will tell the community how wonderful the project is going to be. You need to be a bit careful there because if it doesn't turn out to be that wonderful, exactly in the way you said, what level of commitment did you make in terms of PR, reputation or even legally?"

Lawyers play an important part in structuring the mechanics of business on many levels. By being mindful of sustainable business goals in their everyday work, they have an opportunity to ensure corporate and governance structures, transactions, commercial partnerships, policies and procedures are effectively aligned to these interests.

Many GCs recognise a need to create and protect 'moral capital' for their organisations, as increasingly well-informed stakeholders expect businesses to not only do what is 'legal' but what is 'right'. Lawyers' training and skills in dealing with 'the rules' make them well-equipped to help their companies make wise decisions in the context of these changing ethical dynamics.

"The reason the goalposts have moved is because we are now dealing with morals and not the law and I think that is going to become our stock in trade," comments one GC from the retail sector.

Strategic enabler

Sustainability is an ambitious goal that will require organisations and entire industries to find new, sometimes radically different, ways of working. By proactively engaging in their organisations' strategic agendas lawyers can play a pivotal role in achieving them. This may involve acting early to avoid potential legal or regulatory obstacles, finding ways to influence government policy or creating innovative legal solutions to the corporate and commercial challenges surrounding sustainable business.

"'Act before you are compelled'; 'act when it is advisable and not forced' and 'when it is preferred and not required'. I think it is within these kinds of concepts that the lawyer sits in the sustainability debate," says the GC from the retail sector.

Many lawyers are taking active leadership roles in the sustainability agenda, helping their organisations and stakeholders engage with it in a way that makes business sense. The GC's professional skillset and position in a company is valuable in navigating new territory and facilitating the conversations necessary to find constructive routes forward in the midst of competing priorities. Sustainability is proving a legitimate career development path for senior lawyers looking to broaden their responsibilities within the in-house structure.

If for the organisation sustainability is the evolution of 'good business', then for the lawyer it is the evolution of 'commerciality'. It is widely accepted that being an effective lawyer requires not just legal expertise but a real understanding of an organisation's objectives and the commercial dynamics that surround them. This goes for external advisers as much as it does for those working in-house. Lawyers who really understand the more holistic dimensions of sustainable business will be in a position to provide the best counsel.

Victor Tettmar is executive partner at Bond Dickinson.