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Environmental, social and governance policies

Environmental, social and governance policies


Sustainability and sustainability plans make up a large part of Part E of the ESG. However, the majority of companies are still at the beginning of their ESG journey and learning to make sense of these requirements.

So first, if your clients are asking to know your net zero goal and to see your net zero plan and broader ESG policy, you’re not alone and you haven’t missed the mark. Second, the reason you don’t know how to calculate your carbon footprint and come up with science-based targets isn’t because you don’t know something everyone magically knows whoever has them in place has all used sustainability consultants to gather and map this data. and turn it into realistic goals and a net zero plan.

However, it is important for companies that have not yet started their ESG journey or are just starting to pay attention to this area. Indeed, customers and regulatory requirements in this area will (i) become more and more mandatory and (ii) become more and more onerous in the future. For example, the new EU directive on corporate sustainability reporting expands the social and environmental information that some large listed companies and SMEs operating in the EU bloc will have to report. This will have repercussions for British businesses. So you need to be prepared.

Once you have your targets, you need lawyers. The types of solutions lawyers can help fall into three areas:

  • Get the information you need from your supply chain, including net zero clauses and clauses contractually obliging your suppliers to provide you with the data you need and when you need it as part of your chain contracts supply.
  • Make sure the data you receive is correct, and if not, what steps can be taken to fix it. This means that there are clauses in your supply contracts that allow you to claim damages if the information is unreliable.
  • Make sure you share information in a way that meets reporting requirements and is transparent without compromising commercially confidential/sensitive information.

For more information on the types of terms and conditions that lawyers can help with, there is an excellent free resource that lawyers have put together for free called The Chancery Lane Project. This contains free use clauses for use in supply chain contracts and other Net Zero tools.

If you are considering investing in a business, just as you will be performing financial and legal due diligence, you need to ask yourself questions about the business’ impact on the environment. This information is important to properly understand the sustainability of its customer relationships as well as the impact of the company on the environment (for example its carbon footprint or its impact on biodiversity). Again, lawyers can put together the right questions to ask and help you review the answers.

If you have any questions, contact Kirstin Roberts and Richard Broadbent.

The content of this page is a summary of the legislation currently in force and is not exhaustive, nor does it contain definitive advice. Specialist legal advice should be sought for any questions that may arise.




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