Corporate Legal Teams Take on Bigger Role in ESG as Governance Emerges as a Key Focus, 2024 Benchmark Survey Finds

The latest annual benchmark study on environmental, social, and governance (ESG) policies and compliance conducted by Corporate Counsel in partnership with Morrison Foerster has revealed several notable trends in how organizations and their legal departments are approaching ESG.

The 2024 GCs and ESG Benchmark Survey, which collected responses from 97 in-house counsel including general counsel, chief legal officers, and compliance chiefs, showed that while C-suite leaders continue to steer ESG strategy, legal departments are becoming increasingly involved.

"Though C-suite leaders make up the largest group driving ESG, in-house legal departments and GCs are increasingly becoming more involved," the report found.

Another key development is the resurgence of governance as a focus area for companies. The report noted that "governance is regaining more attention in organizations" after environmental and social issues had dominated in recent years.

Diversity, equity, and inclusion (DEI) and climate change remained prominent factors in the ESG metrics tied to executive compensation. However, the study also found that almost a quarter of organizations are now changing or moving away from using the term "ESG" altogether.

Despite this, over half of respondents said their companies are not encountering any notable ESG backlash, suggesting the concept still maintains broad acceptance.

Confidence that organizations have a comprehensive ESG program in place fell significantly compared to previous years. But the report found that confidence is highest when companies conduct materiality assessments to prioritize their ESG goals and risks.

Another concerning trend is that far fewer companies, including publicly traded firms, are providing ESG disclosures, the survey found.

"Almost half, about double from the year before, say that their internal stakeholders do not know how to 'own' ESG as part of the company culture," the report added.

The study also included insights from several in-house legal leaders who are ESG thought leaders, including Chris Benjamin of PG&E, Mark Maurice-Jones of Nestlé UK and Ireland, and Ling-Ling Nie of Aura.

Overall, the 2024 GCs and ESG Benchmark Survey suggests organizations and their legal departments continue to grapple with the evolving ESG landscape, navigating new priorities, compliance challenges, and cultural shifts.

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