Focus on: The Role of the General Counsel in the ESG Era

The role of the legal department and the GC, in relation to ESG matters, can be summarised in two main paths: ESG awareness and ESG management.

With regards to ESG awareness, GCs are expected to be informed about ESG-related developments, both in terms of regulatory aspects and new standards. In the complex evolving ESG framework, they ensure that directors and the organisations are aware of relevant evolvements with regards to environmental, social, and corporate governance legislation. The GC has a key role in advising the board to ensure it receives relevant information at an appropriate level of detail about the ESG issues subject to board oversight. Given the recent ESG rise and activism, sustainability matters are fast becoming a significant part of their oversight for most directors. Non-compliance with ESG matters is potentially devastating in terms of reputational impacts and could limit market opportunities and capital raising.

The General Counsel is also well positioned within a company to lead ESG management and define the sustainability frameworks. ESG management is defined by a broad set of initiatives aimed at defining the ESG framework and integrating sustainability principles into corporate strategy. The activity includes disclosing the company’s sustainability commitment, establishing defined metrics, understanding ESG risks, and dealing with different stakeholders’ external requests on sustainability issues. Due to its cross position within the organisation, the GC is well placed to take an active role in implementing the ESG framework and ensuring that it reflects current best practices and takes into account emerging trends, including adopting clear and measurable targets for the organisation. The ESG era requires GCs to develop the right skills in order to manage the sustainability process, involving different functions and reporting crucial ESG risks and matters to directors.

Within the Duferco Group, as GC of the Group, I managed the development of our sustainability framework, which is based on three elements: sustainability disclosure, stakeholder engagement, and ESG planning.

Sustainability disclosure aims at transparently reporting information related to sustainability issues, including data, metrics, and projects that the companies of the group set in place. The main instrument is the annual sustainability report, which is published by the group on a voluntary basis. An important element in determining ESG priorities and risks is the stakeholder engagement activity. Over the last years, Duferco established a set of procedures aimed at collecting stakeholder opinions and feedback on our ESG profile and commitments. This activity has been extremely important in defining the first Sustainability Action Plan.