Large law firms are still in the early days of being required to report energy and carbon usage in their annual accounts, with the accounts for the 2021-2022 year representing only the third year that many firms have reported their carbon emissions.
The way to capture, assess and report this data still seems variable across the sector as firms grasp how best to report the impact of their activity. Nevertheless, our analysis on this year’s data shows, tentatively, that law firms are starting to get carbon emissions under control and a number of pioneering firms are leading the way on emissions reduction.
The pandemic effect
In our previous year’s analysis, figures were flattered by the impact of the pandemic. Significant periods of lockdown when offices were closed, with less business travel and more agile working, had resulted in lower levels of emissions. There had been a strong expectation that emissions would rise significantly as office life returned to normal.
Law firms with the lowest emissions
Data from the top 50 law firms’ accounts for the 2021-2022 year suggests this has not happened, with only a 0.8% rise in emissions per partner. Top 10 firms such as Freshfields, Ashurst and Herbert Smith saw double-digit falls in their emissions, but the strongest progress was made by the mid-tier firms. The smallest 10 firms in the top 50 reduced their emissions by 21%.
These reductions have, most probably, been by both accident and design. The vast majority of law firms, now routinely allow home-working for several days a week, which should follow through to lower their carbon footprint. However, there are also real efforts being made by individual firms. Freshfields, for example, offsets its emissions through a reforestation project in Africa. It decommissioned its Fleet Street office, moving to 100 Bishopsgate, which runs on a renewable electricity tariff and has efficient installations throughout.
Pennington Manches Cooper had been offsetting all scope 1 and scope 2 emissions since 2019 and is working with the Science Based Targets Initiative (SBTi) to develop its net zero target. It has held the Planet Mark since 2019, while implementing a sustainable travel policy and appointing Sustainability Champions across its offices.
Similarly, leading law firms and their partners are an important source of thought leadership on regulatory change and climate change mitigation. Ashurst, for example, developed a COP 27 hub, looking at the key outcomes and their likely impact.
Tracking ESG impacts
While these groups are leading the way, many law firms now track their ESG impacts, including carbon emissions. Clients increasingly want to understand their climate emissions across the whole of their supply chain and law firms recognise they need answers when asked about their environmental and social impact.
More resources are becoming available to law firms. The Legal Sustainability Alliance, for example, led by Norton Rose Fulbright partner Caroline May, helps UK law firms measure their carbon emissions and develop better sustainability practices. There are now a range of accreditations that law firms can achieve to showcase their sustainability credentials.
However, it is not a universally encouraging picture. It is notable that around 10% of firms are still not disclosing their carbon data in their annual accounts. This is down from around one in seven last year, but still represents a significant number of law firms who, for whatever reason, are not disclosing the progress (or otherwise) they are making.
There is also a risk that the numbers increase further as normal work resumes. In March 2022, the future of the working environment was still not clear. Many people were still working from home, business travel had not resumed in full and clients were only tentatively reviving face-to-face meetings. It may be that this stronger emissions data cannot be sustained in the face of growing activity levels.
Nevertheless, it is clear that some firms are developing a pathway for emissions reduction that should set a benchmark for best practice. Ultimately, as it becomes a more important factor in client decision-making, firms will be forced to act. The legal sector appears to be on a more sustainable path.
* In collaboration with Law.com, Evelyn Partners analysed the latest set of filed accounts for the top 50 UK law firms for the year to March 22.
Annual Top 50 analysis 2021-22
In collaboration with Law.com, Evelyn Partners analysed the latest set of filed accounts for the top 50 UK law firms for the year to 31 March 22.