Law firms are racing to catch up with the financial sector’s embrace of environmental, social and governance (ESG) investing, as they seek to tackle the effects of climate change and deliver billable hours. And, as the legal sector recognizes the need for ESG action, law schools themselves are responding with new LL.M. modules.
“ESG matters are moving from being a niche area to part of business mainstream, driven by concerns over social license and the need to act on challenges like transitioning to a low carbon economy,” says Professor Margaret Young from Melbourne Law School in Australia. The institution’s Master of Environmental Law is designed to develop expertise in a dynamic area of law that is continuing to grow in importance.
Nearly all the top global law firms now have ESG or sustainability practices, and the past year has seen unprecedented activity. The post-LL.M. job opportunities in this field are increasingly bright. Young says there is a plethora of ESG legal work to be carried out, for example advising on new legal or regulatory developments, climate risk reporting, business transition planning and accountability.
The demand stems not just from the big law firms such as Ashurst and Hogan Lovells, but all manner of enterprises concerned about the increasingly warming planet.
“ESG legal work is in demand in law firms, consultancy firms and businesses,” says Young. “Learning about ESG also helps lawyers play their part in improving the environmental and social accountability of business on big global challenges like climate change.”
How social media is forcing companies to keep their ESG promises
Social media has exposed companies to public judgement of their ESG credentials, which can be reputationally damaging for those who fail to live up to their promises. There is also a growing recognition that companies who deliver on their ESG commitments tend to outperform their peers on the stock market.
The most in-demand legal expertise is for climate and environmental law, corporate or finance law, business management, international law, and energy regulation, Young says. This means that LL.M. students need to keep abreast of goings-on in these fields. “Developing knowledge and understanding of ESG often requires students to be informed about both domestic and international developments,” she says.
Lawyers are also needed for corporate ESG disclosure, especially as regulators are looking for misleading claims, which is known as “greenwashing” and can poses material risks such as litigation. In addition, ESG is increasingly part of the due diligence process in mergers and acquisitions, one of the busiest practice areas for law firms, which have reveled in a recent dealmaking boom that has delivered bumper profits and jobs.
“We are seeing job opportunities flourish both in firms and in-house positions,” says Sara Colangelo, visiting professor of law at Georgetown Law. “There is also a growing demand for attorneys to bring in experience with ESG-related issues to more traditional corporate and environmental legal roles in the private and public sector.”
Some LL.M. programs offering classes focusing on ESG
Georgetown Law, in Washington D.C, offers classes specifically devoted to ESG in its corporate, business, and financial regulation LL.M. courses, as well as classes on specific dimensions of ESG such as sustainability and a “just energy transition” in its environmental and energy modules.
Colangelo says LL.M. students are responding with great enthusiasm to the growth of ESG. “Many of our students are eager to center elements of sustainability and social-responsibility in their legal work,” she says.
“Significant opportunities are appearing in Big Law settings, with firms either tapping environmental and regulatory or compliance attorneys to provide ESG guidance to clients, or creating independent ESG practice groups,” she adds. “Many in-house attorneys in traditional business roles must now consider dimensions of ESG as well.”
In response, many law schools are placing a sharper focus on ESG. The School of Law at the UK’s University of Leeds incorporates climate change, environmental law and sustainability-related challenges within existing LL.M. modules, such as WTO Law and Global Governance. Demand from students for this content is ever more robust.
“Students are choosing careers to further the sustainability agenda,” says Colin Mackie, associate professor in business law. “Our students have moved into employment in a variety of organizations, including policy-related roles in local and national government, and NGOs.”
He says many students, when applying for jobs with law firms, will emphasize that the firm’s approach to sustainability, corporate social responsibility, diversity and inclusivity are key reasons for applying to it. “It appears to be a key marker that students use to distinguish firms and connect with them at an emotional level,” he adds.