The legal department’s role is ever-expanding in both scope and complexity. New responsibilities lead to new questions, leaving room for uncertainty. That’s why the team at Hanzo decided to launch the luminary series, presenting discussions with thought leaders in growing areas of legal and compliance operations. We’re specifically searching for experts who can offer helpful guidance and encouragement to in-house counsel grappling with these new challenges.
Our first guest, Christine Uri, exemplifies the balance of optimism and diligence that we’re interested in presenting. Christine serves as both the Chief Legal Officer and the Chief Sustainability Officer at ENGIE Impact, a global company focusing on sustainable energy use and environmental compliance. For more background on Christine—and why she believes lawyers are ideally situated to be agents of change in their organizations—check out our introductory post.
In our first luminary session, we sat down with Christine to take a deeper dive into her work. Here are a few of the topics we covered.
What Is ESG, and What’s Driving This Movement?
The discussion started with a clarification about what we mean when discussing ESG initiatives. “Broadly speaking, ESG or environmental, social, and governance measures refer to a set of non-financial metrics that are used for public company ratings,” Christine said. “Environmental measures include goals like carbon footprint, water usage, and waste metrics. Social covers a broad variety of issues from human rights to diversity, equity, and inclusion. And then governance is the area that’s most familiar to legal and compliance professionals, as it encompasses ethics and good corporate maintenance.” These non-financial metrics speak to long-term corporate sustainability in our increasingly global, connected world.
There’s been a steady increase in pressure to engage in ESG programs thoughtfully, but the drivers tend to vary based on a company’s primary geographic footprint. “Here in the U.S., a lot of it is driven by business. Businesses are under pressure from all sides: regulators, activists, and increasingly investors and insurance companies,” Christine explained. “As those stakeholders are really starting to focus on ESG measures—and particularly climate change—that emphasis is trickling down to companies. Then there’s pressure from consumers, clients, and employees too. All of these interests are bringing ESG concerns to the forefront of business in the U.S.”
Globally, however, there tend to be different drivers. “In Europe, it’s much more highly regulated, so you see more government-driven initiatives,” she continued. “For example, there’s a supply chain law in Germany that establishes substantive rules for how German companies manage and report on their supply chains. That creates more transparency than we have here in the U.S.”
Speaking of transparency, we explored with Christine, who holds companies to task for their performance on ESG metrics like net-zero carbon emissions?
Who Governs Net-Zero Commitments?
Companies can—and do—set ambitious goals and announce lofty commitments regarding climate change measures like carbon emissions. But there’s no single global regulatory governance structure that holds companies to those commitments. That’s not to say it’s a free-for-all, though; in the U.S., Christine noted, companies are required to ensure that their statements to the market are factual and accurate. “With consumer fraud considerations, companies do face increased scrutiny about the accuracy of their claims. The SEC is getting much more active in this area, with more requirements and monitoring around transparency for carbon emissions, at least.”
However, it turns out that climate change goals are particularly difficult to establish and track. “There are a lot of unknowns in trying to measure something like a carbon footprint,” Christine said. Obtaining the right data—and keeping track of it—is an essential stepping point in the evolution of ESG programs.
The Role of Data and Archiving in Setting and Achieving Environmental Goals
Christine noted that gathering environmental metrics like carbon emissions is exceptionally challenging and data-intensive. “People are often surprised by the amount of data collection that it takes to back up a carbon measurement or a carbon-reduction claim. Successful companies are those that realize they have to invest in setting up great systems to collect and track that data. And of course, if you want to be able to back up any kind of claim, you have to have a record of it.”
The pressure to achieve meaningful environmental goals isn’t going to let up. Not only are most countries implementing additional regulations on environmental impacts, but the public at large is becoming increasingly concerned by the need for real action as they’re feeling the impacts of climate change in their local communities.
But rather than feeling overwhelmed, Christine said, “I choose optimism. I choose to believe in humanity and to believe that this is something that we will collectively come together and solve. Every action counts, so the most important thing is to start somewhere.”
This synopsis only samples the wide-ranging conversation we shared with Christine during the Luminary Series discussion. She also touched on the role of the CSO in creating change, the surprising complexity of supply chains, the double-edged sword of two-hour delivery, the danger of overreaching marketing claims and greenwashing allegations, and more.
Don’t miss the complete discussion; watch the replay on-demand here. When you access the webinar, you can also download a special handout that Christine created for our audience, which explains the five key considerations for general counsel when building ESG programs.
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