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Navigating ESG: How law departments can evolve to meet the challenges
Environmental, social, and governance (ESG) initiatives have become a focal point for businesses, with legal teams playing an increasingly vital role in managing these challenges.
Emma Musgrave
Speaking on a recent episode of The Corporate Counsel Show, Unilever general counsel David Dwyer explored the ESG trends that legal departments need to be wary of and how they can evolve to meet these challenges effectively.
“It’s interesting in a couple of respects. One is obviously the targets that have been set globally have to be made locally in the markets principally,” he said.
As such, the company is working closely with local suppliers and its environment team to tackle the complexity of emissions tracking, particularly scope 3 emissions that stem from the supply chain.
Legal assistance comes in the form of the B Corp certification, which helps identify partners to monitor emissions effectively, Mr Dwyer explained. Additionally, collaboration with the finance team is essential to prepare for the introduction of the new climate-related disclosure regime, he said.
“It’s a difficult target to achieve because, for example, we’re very clear on scope 1 emissions. We know what we produce, we track our factories, we can track our vehicles that we use in our fleets. Where it gets very difficult is sort of scope 2 and down the value chain. Scope 3, we have a huge supply chain and very complex network, many hundreds of suppliers. So that is the next stage,” Mr Dwyer said.
“[We’re also exploring] how legal is helping via the B Corp, but also assisting our environment team to identify those partners who can help us, in fact, track all of our emissions because, without that expertise, we would be very much lost.
“We’re also working with the finance team quite closely with the introduction of the new climate-related disclosures regime. That’s going to be a very significant step for businesses in Australia, so we’re watching that very closely.”
Unilever’s ESG initiatives encompass a wide range of goals, with a particular focus on reducing plastic waste, emissions reduction, and sustainable sourcing across various raw materials. The company is looking into agricultural raw materials like palm oil, paper and board, soy, and sugar to ensure sustainability.
“We’re looking at reducing plastic waste, reducing emissions. An important area is increasing our sustainable sourcing. So, whether that’s across palm oil, paper and board, soy, sugar, all of that agricultural raw material volumes we buy, we’ve got to look at that very closely,” he said.
In addition, Mr Dwyer noted that Unilever is committed to supporting community charities and is actively involved in social initiatives such as providing financial security, health benefits, professional development programs, parental leave policies, and flexible working arrangements. A four-day workweek trial is currently underway in Australia as part of its social responsibility efforts.
“On the S side, the social side, is looking after our financial security, health benefits we provide to professional development programs, parental leave policies and the flexible working we provide. We have a four-day workweek trial in Australia at the moment.”
When asked about the biggest lessons he’s learnt from his journey into ESG work at Unilever, Mr Dwyer shared the importance of putting one’s personal cynicism aside and realising the broader purpose of legal departments in supporting ESG goals.
“When I approached this and when I first joined Unilever, I didn’t join because of its ESG priorities; I joined because it was a wonderful brand and successful company with great opportunities for a rich variety of legal work. I think putting aside my personal cynicism about these matters was a real personal lesson,” he explained.
“What I’ve really enjoyed is working very closely with a cross-functional team, very much getting into the weeds of the business, and learned a lot for lawyers who usually apply their rigour and analysis to legal issues.
“We’ve got more to give in this space, which I’m really pleased that I’ve been able to have the opportunity to do that.”
NB: This transcript has been edited slightly for publishing purposes. You can listen to the full episode here:
