The growing need for a truly strategic approach to decision-making surrounding environmental, social and governance (ESG) ambitions or requirements is evidenced by the fact over half (53%) of leaders now say the firm has an (internal) independent ESG committee to advise the main board about where it should act — steady growth from 45% in the 2023 research.

Matt Sparkes, sustainability director at Linklaters, says: “There’s growing recognition that sustainability should be baked into executive decision-making on a regular basis to work for long-term change. It’s not just an annual review process. This requires pulling influential people from across the business together, so that governance input can also feed through to other parts of the organisation.”

As many continue to invest in new or ‘reimagined’ workspaces, at the same time as embracing hybrid-work patterns, there’s also continued strong interest in the sustainability value of these facilities (86%) and emissions monitoring/travel policies (78%). Meanwhile, there’s a drop in the number who say they are carbon offsetting — from 48% to 39%.

A steady fifth of firms are certified as a ‘B Corp’ business — or seeking this accreditation — a process they find enables an audit of ESG-focused performance across the organisation, effectively demonstrating certain standards, and embeds a framework for continuous improvement against the various aspects each year.

And it’s striking that over twice as many (21%) as in 2023 (9%) report the firm is prepared to ‘screen’ clients it works for in terms of potential environmental impact flowing from their business activities.

The law firm Cripps achieved B Corp status at the start of 2024. Beatton says: “As well as driving continuous improvement — with recertification every three years — it’s an excellent route for engagement with people at every level. You can start with some relatively straightforward changes that improve the score but will then be challenged to keep improving.” Alongside clear responsibilities for different pillars of progress, Cripps also created the new role of ‘purpose and impact manager’ to steer the project.

Working on wellbeing

But the action that leaders are most likely to say their firms are taking concerns the performance of their own people — investing in packages of wellbeing support. The experience of working through the Covid-19 pandemic arguably increased awareness that a productive and positive organisational culture depends on a well and connected workforce, particularly with the possibility of more remote work — and the significant business risk burnout can bring.

Beatton continues: “Professional services is a typically stressful environment and it’s important people talk about it more than was once the case. All employees have access to confidential wellbeing support as part of private medical cover, and we provide additional support where there’s a case for doing so. Wellbeing is widely promoted in the business, with a board sponsor, activities and discussion groups on a regular basis.”

Pollins at DMH Stallard adds: “High retention flows in part from a decision to offer everyone in the business a sensible work-life balance. You cannot just pay lip-service to that — teams need to be empowered, and trusted, so no looking over shoulders to check the hours people are working, what they’re wearing, and so on. Attitudes have changed, and firms must agree a mature policy for flexibility — and this also carries significant commercial advantage.”

Also suggesting an increasingly robust approach to the management challenges perhaps, three-fifths (61%) say the firm now has at least some specific firm-wide KPIs for ESG in place — up from 48% in 2023. Then a third expected some to show within 12 months, and this has fallen to 18% — so plenty have made progress. Only 14% now indicate they’ve no plans in this respect, with 7% unsure. Finally, almost half (49%) say their clients “always” or “regularly” enquire about such targets and wider ESG policies before instructing them — and it’s increasingly rare that this is “rarely” the case (14%).

Sparkes says the sector is rapidly adjusting to a need to be more public-facing — which may change how some matters are reviewed, as well as conversations about the process. “Some clients also expect more bespoke work, covering the value-add on top of essential fulfilment of requirements — many firms are now selling ESG-related services,” he explains. “The scope of reporting demands, legal and non-legal, continues to widen — and firms cannot be transparent and accountable without targets.” He says that resourcing management of the consistency and delivery of timely, meaningful ESG data across the business is key — in some cases there are different rules and norms in different jurisdictions — and “speed of access” to the information is often a challenge. Meanwhile, leaders also need to consider how achievable or ambitious their targets should be through a public-facing lens.

Penningtons Manches Cooper recently saw its target of Net Zero by 2040 approved by the Science Based Targets Initiative (SBTi). CEO Helen Drayton says: “Absolute commitment is what our clients and our people expect — and it’s also important for us to stay at the forefront. Sustainability runs all the way through our decision-making, including engaging with suppliers, taking on new space and monitoring positive progress.

“Ensuring opportunities at the firm for as broad a spectrum of talent as possible is another key driver for me. We’re beginning to see benefits from a programme to attract more people from minority-ethnic backgrounds onto the firm’s vacation schemes — which feed a lot of training contracts — in particular.” The firm has also equalised its parental leave offer to help more fulfil their full career potential.

Four-fifths (82%) of leaders in 2024 agree their firm is pushing to support more diverse pipelines of talent through to the most senior leadership or other strategic positions. Walker-Smith at Ampa concludes: “Key is measuring outputs and creating level playing fields, ensuring processes for development and progression are transparent and fairly assessed, and that everybody has the same opportunities, but beyond that it remains merit-based. There’s no room for any tokenism, which would make matters worse medium-term.”