// ESG and potential regulations requiring carbon reporting are all over the news. There are political arguments, heated debates, and misinformed statements. It can be tempting to tune it all out or file it away as “somebody else’s problem.” Unfortunately, if you are a general counsel, you can’t afford to take a pass on this topic.

There are real actions on carbon reporting and mitigations that general counsel must take today in order to protect the future of their company. To help you push through the noise, here is a primer on what you need to know now.

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Your Company Will Be Required To Measure Its Carbon Footprint

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This is not an “if,” it’s a “when.”

We’ve all seen the headlines about the proposed SEC rule to standardize carbon-related disclosures. You might be telling yourself “Those don’t apply to me. They are only for public companies. My company doesn’t need to get into carbon disclosures.” Think again.

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If your company is large enough to have a general counsel, more factors at play will drive the need to measure and reduce your carbon footprint.

• Investors. If you are at a PE or investor-owned company, know that investors are already starting to ask for this data. More and more boards are considering carbon management as a part of their oversight duties. And investors know that a company’s carbon footprint could impact its exit prospects.
• Clients. If you are at a B2B company, your corporate clients will be asking for carbon measurements and mitigations (if they aren’t already). Clients who are adopting carbon reduction targets are required by carbon-accounting rules to collect data on emissions from across their value chain and drive reductions.
• Consumers. If you are at a B2C company, more and more consumers are demanding information on carbon. Sustainability is increasingly a consideration in buying decisions. In fact, some brands are already adding carbon labels to address this demand. Carbon data will become necessary to compete in large consumer markets like the United States and European Union.
• Talent. For many employees, a company’s commitment to sustainability is becoming a significant factor in where they choose to work. Interested in maintaining your talent pool? Measure, report on, and reduce your carbon footprint.

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Measuring Your Company’s Carbon Footprint Will Take Time

Measuring your carbon footprint is not easy. Data from many disparate sources — factory emissions, fleet emissions, energy usage, travel data, emissions from purchased goods and services and more — is required. You will need to find someone who has a deep knowledge of carbon accounting, engage stakeholders across the business, and establish new processes and systems to collect and manage this data on an ongoing basis.

And don’t forget verification. If you are planning to share your carbon footprint data publicly, you should have it verified by an independent third party to avoid claims of greenwashing.

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How much time will this take? It depends on the size of your business. If you have a simple low-carbon business and the resources you need — a good estimate is six months. If you are a large global company with complex emissions — it may take 18 months or more.

If you wait until you have an urgent need for your carbon footprint, you will be behind the eight-ball.

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What happens when your board suddenly demands carbon reporting data? I have seen boards give a six-week timeline for this information — which is impossible to accomplish. Your CEO will be in front of the board having to explain that it will take months to collect your company’s carbon data and why the executive team has not already addressed carbon management.

How about when your largest client goes to RFP and makes carbon reporting and reduction a key part of selection criteria? I can tell you what will happen next. Your sales team will email everyone in the company asking to have the data in a week. No dice. The best you will be able to do is submit a plan of action on carbon for the future.

The bottom line is that you need to start now.

You Will Find Unexpected Value

Once you have your carbon data, there is a lot you can do with it.

Carbon data often leads naturally to reduction plans, and many carbon reductions come with cost savings. Making your operations more energy efficient is a win/win from a financial perspective. Interested in reducing the cost of business travel? Carbon limits can provide strong motivation for changes in behavior. How about reducing waste by deploying circular economy techniques? Maybe you can find an opportunity to either re-sell your waste or reduce your disposal fees.

In addition, having a strong carbon-reduction program can make your goods and services more competitive in the marketplace. It will move you from being a laggard to being a leader. Add information on your carbon program to your website and pitch decks. Make it a reason to choose your company as a business partner.

You Can Do this!

Time for the best news of all. Measuring your company’s carbon may feel like foreign territory. But as general counsel, you have all the skills you need to succeed in this mission.

• Terminology. Lawyers are good at learning new words. And learning carbon-accounting terminology is the first step. Start by learning “greenhouse gas emissions,” “Scope 1,” “Scope 2,” and “Scope 3.”
• Advocacy. Moving your company to action when it comes to carbon is no easy task. I provided you with the outline of a business case in this article. Pull out the pieces that are relevant to your company and put those advocacy skills to work!
• Diplomacy. You will have to bring almost every part of the company on board for this journey. No problem. Your job already requires strong collaboration, and you know how to deal with all the key stakeholders diplomatically.
• Organization. You will need an action plan to coordinate multiple parties and steps. Think of the initial push as a large transaction. Bust out your Excel skills and start capturing all steps, timelines. and accountabilities.

Once your business leaders understand the “why” behind carbon measurement and reduction, everything will get easier. And as general counsel — you are in the perfect position to make this happen.

Are you inspired yet? If not, what’s holding you back? What will it take for you to drive this change?

Christine Uri is the Chief Legal and Sustainability Officer at ENGIE Impact – a company that enables global corporations to accelerate their net-zero carbon journey. Christine began her career as a business attorney 20 years ago, providing legal counsel to businesses ranging from local start-ups to international Fortune 500s. She is a general counsel, sustainability leader, public speaker, and content creator. Christine believes that improving corporate performance on ESG measures is critical to building a more sustainable world. She is passionate about inspiring and empowering in-house legal teams to provide ESG leadership. You can follow Christine on LinkedIn. This article reflects Christine’s personal opinions and not the opinions of her employer.

Topics

Biglaw, Christine Uri, Corporate ESG, In-House Counsel