The increasing concerns about climate change and the rising prominence of broader Environmental, Social, and Governance (ESG) factors have become dominant themes in business. Around the world, both private markets and governments are intensely focused on sustainability. Blackrock CEO Larry Fink captured the mood in his 2022 Annual Letter to CEOs, predicting: “The next 1,000 unicorns won’t be search engines or social media companies, they’ll be sustainable, scalable innovators – startups that help the world decarbonize and make the energy transition affordable for all consumers.”
Growing recognition of a business imperative for ESG has sharply increased demand for environmental attorneys. ESG has been a part of the corporate landscape for years, but until recently, environmental and social issues were largely limited to law firm specialty practices, such as environmental groups. In contrast, today we see a broadening of ESG-related legal matters across numerous practice areas including M&A, litigation, and regulatory.
A “whole of government” approach
With President Biden regularly emphasizing the importance of climate and ESG issues, federal agencies are taking a “whole of government” approach. The Securities and Exchange Commission (SEC) established a Climate and ESG Task Force in March 2021, which has focused both on issuers’ disclosures about ESG and climate matters and on compliance programs for registered investment advisers marketing ESG funds. The SEC is considering new rulemaking in this area, with the aim of ensuring consistency and comparability in public company disclosures and facilitating investment managers’ ability to evaluate potential ESG investments. Speaking in July 2021, SEC Chair Gary Gensler advocated the benefits of corporate disclosure of climate-related risks and stated that he had directed SEC staff to develop a mandatory climate risk disclosure rule proposal.
The Environmental Protection Agency (EPA) has established an interagency task force on hydrofluorocarbons (HFCs), noting that “global phasedown of HFCs is expected to avoid up to 0.5 °C of global warming by 2100.” The taskforce seeks to combat the illegal trade, production, use or sale of HFCs, and is taking measures to support the transition to HFC alternatives, reclamation, and recycling. The Environment and Natural Resources Division of the Department of Justice has sought to address climate change in part by bringing Clean Air Act cases related to the use of flares to burn off volatile organic compounds, toxics and other pollutants in waste gases.
Growing public demand and awareness
Though the regulatory developments are of central interest to attorneys, it is also important to note the rising support for ESG principles among the broader public. This is reflected in extraordinary growth of investor interest in ESG-focused products. Morningstar data shows that in the first three quarters of 2021, over $54 billion flowed into ESG funds, eclipsing the total for all of 2020. The 2020 flow of $51 billion was itself a record, more than doubling the total flow in 2019. Environmental justice topics are increasingly the subject of media attention, helping to drive greater public awareness. Corporations must be cognizant of this broader trend in the public mood as they formulate their business strategies and anticipate potential risks.
Ideal conditions for environmental attorneys
Now, more than ever, clients and law firms need environmental attorneys who can navigate an expanding and fast-changing maze of environmental laws. The eruption of client demand has created a surge of new positions for environmental attorneys at all levels, from junior environmental associates to senior environmental partners. Firms and clients are seeking lawyers who understand the Clean Air Act, in particular, but can also advise on a wide array of Environmental, Social, and Corporate Governance issues.
In the current market, environmental attorneys are uniquely positioned to take their practices to the next level. With more environmental matters to pitch to clients than ever before, the opportunities to expand are everywhere. Robust demand for environmental attorneys is enabling lawyers with experience in this field to make impressive lateral moves, either to more prestigious firms or to higher-ranked environmental practices.
Lateral Link has experience placing environmental attorneys across the top practices in the field. We are happy to offer our advice about your individual circumstances, even if you are not ready to make an immediate move. We welcome you to contact Amy to discuss your options.